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2012 (6) TMI 58 - DELHI HIGH COURTAdditional provision for warranty Claim - dis-allowance - Tribunal allowed normal warranty, extended warranty, however denied additional provision for warranty on domestic sales claimed by assessee considering the increase in trend of settlement of actual warranty claims in the past - Held that:- The observations record that an assessee is entitled to compute the warranty provision on the basis of estimate every year for future warranty expenses. Such estimates may be re-assessed every year but the re-assessment has to be on some scientific method of accounting which is to be adopted by the assessee. In the present case the Tribunal has noticed that the scientific method constantly adapted and followed by the assessee was on the basis of average of last three years. In the present case the warranty provision was increased from 0.28% to 0.39% of the turnover. The assessee wants to make an additional provision of Rs. 91.70 lakhs over and above Rs. 885.28 lakhs already made. This is an increase of more than 12% in the provision for warranty as per the formula regularly adopted. The said jump is quite substantial. hence, order of the Tribunal does not call for any interference - Decided in favor of Revenue
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