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2015 (7) TMI 657 - HC - Income TaxWarranty amount inclusive of the sale amount - whether is an accrued liability or a contingent liability? - Tribunal following the decision of CIT v. Rotork Controls India Ltd. and others, (2007 (2) TMI 200 - MADRAS High Court) came to hold that since the warranty provision made as against the liability had not crystallized against the assessee, the plea of the assessee seeking deduction is unsustainable - Held that:- The decision of this Court in Commissioner of Income Tax v. Rotork Controls India Ltd. [supra] on which heavy reliance was placed by the Tribunal, was reversed by the Supreme Court [2009 (5) TMI 16 - SUPREME COURT OF INDIA] in the aforesaid decision wherein held that if the historical trend indicates that a large number of sophisticated goods were being manufactured in the past and in the past if the facts established show that defects existed in some of the items manufactured and sold then the provision made for warranty in respect of the army of such sophisticated goods would be entitled to deduction from the gross receipts under section 37. The order of the Tribunal stands set aside and the matter is remanded to the Assessing Officer to pass appropriate orders in the light of the decision of the Supreme Court cited supra. - Decided in favour of assessee for statistical purposes.
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