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Issues involved: Appeal against the order of the Commissioner of Income-tax (Appeals) regarding the deletion of an addition made on account of disallowance of provision of warranty debited to profit and loss account u/s 143(3) of the Income-tax Act, 1961.
Summary: The Revenue appealed against the CIT(A)'s decision to delete the addition related to the provision of warranty. The Revenue argued that the CIT(A) did not consider the increase in the provision made during the relevant year compared to previous years. The Revenue contended that the provision for warranty should meet specific conditions as per the decision of the Hon'ble Supreme Court in Rotork Controls (I) Pvt. Ltd case. The Revenue urged for a reconsideration of the issue based on the legal principles established by the Supreme Court. The assessee, on the other hand, relied on the CIT(A)'s order and previous Tribunal decisions in their favor for other assessment years. After hearing both parties, the Tribunal noted that the issue had been settled by the Supreme Court in the Rotork Controls (I) Pvt. Ltd case. The Tribunal directed the AO to re-examine the case in light of the Supreme Court's observations and conditions laid down in the judgment. Regarding the cross-objection filed by the assessee against the Assessing Officer's findings, the Tribunal found it unnecessary to adjudicate on it as the main appeal had been remitted back to the AO for reconsideration. Therefore, the cross-objection was dismissed as infructuous. Ultimately, the appeal by the Revenue was allowed for statistical purposes, and the cross-objection by the assessee was dismissed. The order was pronounced in the open court on 30th Jan, 2012.
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