9911796707
TMI Blog2012 (12) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; Respondent by: Ms. Sayaree Basu Malik, Advocate. ORDER PER B.R. MITTAL, JUDICIAL MEMBER The department has filed this appeal for the assessment year 2007-08 against order of the learned Commissioner of Income-tax (Appeals) dated 13th December, 2011 on the following grounds:- "1. Whether, on the facts and in the circumstances of the case, the Ld. CIT(A) was right in law in deleting the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has claimed deduction of Rs.40,74,428/- on account of provision for warranty in respect of after-sale warranties to be provided by the assessee to its customers on products sold during the year under consideration. The warranty provision amount was calculated at 1% of the net amount of sales and service income for the year under consideration. The Assessing Officer considering the writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year. Excess provision, if any, for the year is reversed. * The actual expenses on warranty are directly charged to the Profit & Loss account and hence the same does not impact the above calculation. The learned CIT(A) considered the assessment order, submissions of the learned AR of the assessee and case laws on the matter. Finding that the issue is squarely covered in favour of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 278 ITR 337, has held that provisions for warranty charges is not a contingent liability and is deductible in computation of taxable income. It is an accrued liability. This decision has also been confirmed by the Hon'ble Apex Court by dismissing SLP filed by the Department reported in 319 ITR 54 (St.). Respectfully following the decision of the Hon'ble Delhi High Court which h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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