https://www.taxtmi.com/caselaws?id=57039 Warranty-related repair and replacement provision on transformers sold under contractual warranty was treated as an allowable trading expense because the liability arose from the sale, was based on past experience, and could be reasonably estimated; the disallowance was not sustained. Unutilised Modvat credit was not treated as taxable income because it remained subject to statutory conditions and was not a free or realised accretion to income; the addition was deleted. The discussion thus turns on accrued liability and reasonable valuation for warranty obligations, and on the distinction between statutory credit and real income. en-us Mon, 01 Dec 1997 00:00:00 +0530 Mon, 05 Jan 2026 15:48:39 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=57039 Warranty-related repair and replacement provision on transformers sold under contractual warranty was treated as an allowable trading expense because the liability arose from the sale, was based on past experience, and could be reasonably estimated; the disallowance was not sustained. Unutilised Modvat credit was not treated as taxable income because it remained subject to statutory conditions and was not a free or realised accretion to income; the addition was deleted. The discussion thus turns on accrued liability and reasonable valuation for warranty obligations, and on the distinction between statutory credit and real income. Case-Laws Income Tax Mon, 01 Dec 1997 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=57039