Case Law Details
DCIT Vs Mahindra Two Wheelers Ltd. (ITAT Mumbai)
Introduction: The case of “DCIT vs. Mahindra Two Wheelers Ltd.” heard by the Income Tax Appellate Tribunal (ITAT) Mumbai revolves around the deduction allowable for warranty expenses related to motor vehicles. The central question is whether the provision for warranty, as claimed by the assessee, is based on actual expenses incurred and thus qualifies as a deductible expense under the Income Tax Act, 1961. This article provides a comprehensive analysis of the case, including the key grounds of appeal, findings of the ITAT, and the conclusion.
Detailed Analysis:
1. Background of the Case: The case pertains to Mahindra Two Wheelers Ltd., a company engaged in manufacturing and selling motorized two-wheeler vehicles. The assessment year in question is 2016-17. The Revenue challenged an order passed by the Commissioner of Income Tax (Appeals) (CIT(A)), which deleted the addition made by the Assessing Officer (AO) on account of disallowance of a provision for warranty.
2. Grounds of Appeal: The Revenue raised several grounds of appeal against the CIT(A)’s decision. The key issues raised included:
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