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2018 (5) TMI 631 - AT - Income TaxDisallowance of provision for warranty expenses - whether the same is an ascertained liability and has been calculated based on technical estimates? - Held that:- The only dispute is whether the claim made by the assessee is a reliable estimate or not but in any case, it cannot be nil. Qualification in the audit report with respect to quantification is only because of non-availability of the reliable trend for the past years. The assessee has also disclosed in the notes on accounts the details of the warranty expenses. The assessee has also stated that expenditure incurred during the year is not separately identifiable. The lower authorities have not examined these details. The provisions of the warranty expenditure is required to be estimated based on the past experience of the assessee demonstrated on the basis of past warranty liability on similar type of contracts and further it can be proved by incurring the warranty expenditure in subsequent period to the sales. This exercise has not been done either by the assessee or by the revenue. Thus set aside the whole issue back to the file of the Ld. assessing officer with a direction to the assessee to prove before the AO how the warranty provisions have been made by the assessee along with the technical inputs received from the technical team of the assessee Disallowing full credit of taxes deducted at source and taxes paid by the appellant dismissing the grounds raised by the appellant - Held that:- As the amount of tax deduction at source and taxes paid by the assessee is required to be given credit from the tax liability determined by the Ld. AO if they are supported by the necessary evidences, hence we set aside this ground of appeal to the file of the AO with a direction to examine the claim made by the assessee of credit for tax deduction at source and advance tax paid.
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