Warranty provision deduction upheld where prior precedent and consistent tax treatment supported deductibility.

A provision made for warranty claims against buyers under a warranty arrangement was treated as an allowable deduction, following an earlier court decision that applied the Supreme Court ruling in Rotork Controls India P. Ltd. The court also noted that the Revenue had accepted the same claim in subsequent years, supporting consistency in tax treatment. On that basis, the warranty provision was deductible and no question of law arose.

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Issues: Whether the deduction claimed in respect of provision for warranties was allowable.

Analysis: The warranty provision was made against possible claims from buyers under the warranty arrangement. The issue was covered by an earlier decision of the Court, which had treated such a provision as an allowable deduction by relying on the Supreme Court's ruling in Rotork Controls India P. Ltd. The Court also noted that the Revenue had allowed the claim in subsequent years, reinforcing the position on consistency.

Conclusion: The warranty provision was allowable as a deduction, and no question of law arose.

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