Scientifically estimated warranty provisions and disclosed security deposits cannot justify reassessment based on change of opinion.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Warranty provision computed on a scientific basis was treated as deductible where it reflected a present obligation from past events, was likely to result in an outflow of resources, and could be reliably estimated; reopening on the same record was quashed because it ignored the governing principle on deductible warranty liability and material already disclosed. Reopening over forfeited security deposits linked to C-Forms was also invalid because the assessee had already disclosed the customer-wise details and the use of the amounts to meet sales tax liability, so the attempt amounted only to a change of opinion. On both grounds, reassessment was set aside.....