2016 (8) TMI 1593

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....ondent : Shri K. K. Ved, A.R. ORDER PER SHAILENDRA KUMAR YADAV, J.M: This appeal has been filed by Revenue against the order of Commissioner of Income-Tax (Appeals)-17, Mumbai, dated 15th March, 2011 for A.Y. 2006-07 on following grounds: "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance related to provision of war....

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....amount of Rs.1,66,07,319/ in P&L account as provisions of warranty. He noted that when warranty claimed by customers then assessee became liable to incur such expenses and if not there was no liability on assessee. Accounts were maintained on mercantile basis on the presumption of going concern. However, it was uncertain whether the same shall be claimed by customers in future. It was held that as....

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....) granted relief to assessee. 2.2 Same has been opposed before us on behalf of Revenue inter alia submitted that CIT(A) granted relief to assessee on disallowance related to provision of warranty of Rs. 1,24,46,994/- Accordingly, order of CIT(A) be set aside and that of Assessing Officer be restored. On the other hand, ld. Authorized Representative supported the order of CIT(A). 2.3 After go....

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....re found defective; that valve actuators being a sophisticated items, no customer was prepared to buy a valve actuator without a warranty. Therefore the warranty became an integral part of the sale price; in words the warranty was attached to the sale price of the product. In this case the warranty provision had to be recognized because the assessee had a present obligation as a result of past eve....