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2010 (1) TMI 33 - HC - Income TaxProvision for warranty expenses – deduction u/s 37 – AO noticed that the assessee had claimed warranty expenses as under:- (i) Warranty on actual expense basis Rs 35,69,999/- (ii) Provision for warranty expenses Rs 31,35,150/- Rs 67,05,149/- - AO disallowed the deduction of provision for warranty expenses – CIT(A) confirmed the order of AO – ITAT deleted the addition and allowed the deduction – held that – ITAT is correct in holding that the provision made by the assessee for the current year, on the basis of past year figures, towards warranty liability to be discharged in the future, was an accrued liability and not contingent in nature and, therefore, was allowable as deduction in computing profit and gains of the business – expenses allowed
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