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2019 (4) TMI 92 - AT - Income TaxAllowability of the provision of warranty - scope of policy for warranty - concept of accrual and the "matching concept" - contractual obligation to make the payment in principle - HELD THAT:- Sum of provision was calculated based on the policy adopted by the company. This policy has not been found erroneous by the authorities in any forum. Therefore, it is wrong infer that the assessee does not have a policy and the contractual obligation to make the payment in principle and the quantification is also not found erroneous and unscientific by the authorities. It is also seen that unutilised provision is carried forward to the subsequent years by maintaining the opening and closing balances. Therefore, without bringing any evidence on record, the allegation of the Assessing Officer and the Commissioner of Income-tax (Appeals) that the warranty expenses are not claimable is incorrect. We also find the assessee has been maintained this method in principle over the years and they are not disturbed conclusively. Therefore, we hold that the provisions created by the assessee are required to be allowed as claimed by the assessee. Accordingly, the grounds raised by the assessee in this appeal are allowed.
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