https://www.taxtmi.com/caselaws?id=262635 A provision for warranty and after-sales service expenses is deductible where it represents a present business obligation arising from past sales, the outflow of resources is probable, and the amount can be reliably estimated. The provision was supported by the assessee's contract warranty terms and by a historical comparison showing that the amount provided was broadly commensurate with actual warranty expenditure and, in several years, lower than the eventual outlay. On that basis, the provision was treated as a fair and reasonable estimate of a definite business liability and allowed as a business deduction under section 37. en-us Wed, 28 Jan 2015 00:00:00 +0530 Mon, 03 Aug 2015 12:38:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=262635 A provision for warranty and after-sales service expenses is deductible where it represents a present business obligation arising from past sales, the outflow of resources is probable, and the amount can be reliably estimated. The provision was supported by the assessee's contract warranty terms and by a historical comparison showing that the amount provided was broadly commensurate with actual warranty expenditure and, in several years, lower than the eventual outlay. On that basis, the provision was treated as a fair and reasonable estimate of a definite business liability and allowed as a business deduction under section 37. Case-Laws Income Tax Wed, 28 Jan 2015 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=262635