Provision amount based on materiality concept can’t be treated as unascertained liability

Eberspeacher Suetrak Bus climate Control Systems Private Limited Vs ACIT (ITAT Delhi) Held that based on materiality concept, the amount of provision made, can’t be termed as unascertained liability, as the % for which provision is being made had been derived based on technical study, past experience of the company and the industrial standards. Facts- The appellant had debited expenses in P&L account, under the head “Provision for Warranty” amounting to Rs. 1,39,21,294/-. During the assessment proceedings, AO observed that the assessee has incurred expenses amounting to Rs. 95,33,176...