Provision for Mobile Phone Warranty Cannot be disallowed for mere Technology Improvement

Nokia India Pvt. Ltd. Vs Add. CIT (ITAT Delhi) The issue under consideration is whether the CIT(A) is correct in disallowing the provision for warranty of mobile phone merely on the basis of improvement in technology is justified in law? ITAT states that, as stated by the Assessing Officer in the assessment order, the table reveals that there was substantial increase and jump in sales year after year in the Assessment Years 2002-03, 2003-04, 2004-05 and 2005-06, from Rs.58.97 crores to Rs.830.51 crores to Rs.2408.01 crores, and then to Rs. 4729.14 crores, respectively. The provision for warra...