TMI Blog2019 (1) TMI 1644X X X X Extracts X X X X X X X X Extracts X X X X ..... le. The only thing is that the estimation of the provisions for warranty should be on scientific basis. The appellant has calculated provisions of warranty on the basis of warranty period, actual expenditure on warranty. The obligation of warranty starts at the point of sale itself. Provisions for warranty is allowable and disallowable made by the AO cannot be upheld - Decided in favour of assessee. - ITA No. 2200/PUN/2016 - - - Dated:- 21-1-2019 - SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM For the Appwllant : Shri Abhishek Mesran For thr Respondent : Shri Nikhil Pathak ORDER PER D. KARUNAKARA RAO, AM: This appeal is filed by the Revenue against the order of CIT(A)-7, Pune dated 30.06.2016 for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ences and data stating that the amount of warranty provision constitutes only 1.43% of the sales. The assessee submitted the financial year-wise details of warranty provision and also the details of appropriation of the said provision towards the claims. The said data is extracted by the CIT(A) at para 1.3 of his order in tabular form. The assessee further made a submission that the warranty provision would be invoked after the two years from the date of purchase of the assets. In other words, for the sale made in the financial year 2009-10, the consumer raises the demand for warranty after the two years only i.e. financial year 2011-12. The assessee furnished the relevant data and submitted that in financial year 2011-12 the assessee utili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Financial Year 2009-10 2010-11 2011-12 2012-13 Opening balance 7,500,000 7,500,000 19,593,249 42,142,596 Addition Utilisation 15,888,819 41,305,567 (18,756,220) 103,707,585 (41,429,042) Closing Balance 7,500,000 19,593,24 42,142,596 104,421,139 7. From the above tabulated data, it is evident that in the first two financial years 2009-10 and 2010-11, the provision created ..... X X X X Extracts X X X X X X X X Extracts X X X X
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