TMI Blog2015 (6) TMI 937X X X X Extracts X X X X X X X X Extracts X X X X ..... INDIA] wherein held that the assessee was engaged in the business of manufacture of valve actuators, which were sophisticated goods. The statistical data indicated that every year some of these were found defective. The valve actuator, being a sophisticated item, no customer was prepared to buy it without a warranty. Therefore, the warranty became an integral part of the sale price. In other word ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JJ. MR KM PARIKH, ADVOCATE FOR THE APPELLANT MR SN SOPARKAR SR. ADVOCATE FOR MRS SWATI SOPARKAR, ADVOCATE FOR THE RESPONDENT ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. These Tax Appeals involve common questions on law and facts and hence, they are decided by this common judgment. For the sake of convenience, Tax Appeal No.966/2007 is taken as the lead ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d appeal before the CIT(A). The CIT(A) disposed of the appeal vide order dated 12.06.1996 and the total income of the assessee was reduced to ₹ 4,13,250/- after giving effect to the order of the CIT(A). 5. In the meantime, on verification of the case records, it was found from the Manufacturing, Trading and Profit Loss Accounts that an amount of ₹ 5,54,292.30 is deducted from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenge in the present proceedings. 7. The question of law framed in these appeals is the same. It reads as under; Whether the ITAT was right in law and on facts in deleting the addition of ₹ 5,54,292/- made under the head provision made on account of warranty which is in the nature of contingent liability? 8. We have heard learned counsel for both the sides and perused the rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resulting in an outflow of resources and a reliable estimate could be made of the amount of the obligation. Therefore, the assessee therein had incurred a liability during the assessment year which was entitled to deduction u/s.37 of the Income-tax Act, 1961. 9. Learned counsel appearing for the Revenue was not in a position to dispute the above proposition of law. Since the issue is already co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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