Assessee entitled to claim deduction in respect of the provision for warranty made on the basis of past experience

Acer India Pvt. Ltd. Vs. DCIT (ITAT Bangalore) – Provision for warranty stood crystallised as soon as the sale was made which a customer would like to be fulfilled within the warranty period and is at the cost of an assessee ‘Goodwill Therefore, the residual amount purported to have been held by the AO as an excess provision cannot be considered as a contingent provision and not an ascertained liability. The warranty period continues beyond an year which fact was rightly considered by the ld. CIT(A) confining to the various decisions such as IBM India Ltd. (Supra) reported in 290 ...