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2014 (7) TMI 84 - ITAT DELHIProvision for warranty and other expenses - Held that:- The addition is deleted on account of provision for warranty and other expenses by holding it to be an ascertained liability - the addition made by the AO in the original proceedings for some amount of provision for warranty and other expenses does not stand, there can be no question of making the remaining part of the amount of the provision – the order of the CIT(A) is upheld. Provision for doubtful debts written back – Held that:- If provision for doubtful debts is not claimed as deduction in the computation of total income, then, naturally, the amount of provision written back cannot equally be treated as income - If the position so stated by the assessee is correct, then, there can be no question of adding provision for doubtful debts written back to the total income - the facts are not clear, the AO is directed to verify the assessee’s contention about not claiming deduction of provision for doubtful debts in the year(s) in which such provision was created. Provision for doubtful debts – Held that:- The AO has started his computation of total income with the income assessed which tallies with the income declared by the assessee before set off of brought forward losses and unabsorbed depreciation, this indicates that the sum was also added by the assessee to its total income representing provision for doubtful debts - addition of the equal sum by the AO in proceedings u/s 154 has led to making of double addition - the sum cannot be added to the total income under regular provisions. Computation of book profits u/s 115JB of the Act - Provision for gratuity – Held that:- The computation of total income filed by the assessee along with the return of income, the provision for gratuity was suo motu added back by the assessee in its computation of total income – Relying upon CIT vs. Echjay Forgings Pvt. Ltd. [2001 (2) TMI 56 - BOMBAY High Court] - provision for gratuity is deductible in the computation of book profits for the purposes of Section 115J of the Act - there is not much difference to the language of the Explanation, affecting the nature and treatment of provision for gratuity - Decided partly in favour of assessee.
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