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TMI Blog2019 (1) TMI 1644X X X X Extracts X X X X X X X X Extracts X X X X ..... these and such other grounds as may be urged at the time of the hearing, the order of the Ld. Commissioner of Income tax (Appeals) may be vacated and that of the Assessing Officer be restored. c. The appellant craves leave to add, alter or amend any or all the grounds of appeal." 3. Briefly stated the relevant facts include that the assessee is engaged in the business of supply, erection, installation, operations and maintenance of wind turbine generators (WTG) and other associated activities. The assessee filed the return of income declaring a loss of Rs. 17,24,43,810/-. During the year under consideration, the assessee debited an amount of Rs. 75,00,000/- in the Profit and Loss Account on account of warranty provision. At the end of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed the applicability of the Hon'ble Supreme Court judgment in the case of Rotork Controls India Pvt. Ltd., (supra), Hon'ble Delhi High Court judgement in the case of CIT vs. Ericssion Communications P. Ltd., 318 ITR 340 (Delhi), Hon'ble Bombay High Court judgement in the case of CIT vs. Hinditron Services Pvt. Ltd., 321 ITR 263 (Bombay) and the ITAT, Pune Bench decision in the case of Kirloskar Brothers Ltd. vs. DCIT (2016) 167 TTJ 0102 (Pune), and held that the assessee calculated the warranty provision on the basis of considering the actual expenditure. The CIT(A) also distinguished the decision cited by the Assessing Officer in his order. Eventually, in para 5.8 the relief is granted by the CIT(A) to the assessee. 5. Aggrieved with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is made. Assessee was therefore, entitle deduction in respect of provisions for warranty claims. The appellant has relied on Kirloskar Borthers Ltd. (supra) wherein provision for warranty were fully allowed. The crux of these judicial pronouncements are that provisions for warranty are full allowable. 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. 5.8 In view of the above provisions for warranty of Rs. 75,00,000/- is allowable and disallowable made by the AO cannot be upheld. Accordingly, ground no.1 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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