Provision for Sales return not allowable as deduction under section 37

Nike India Pvt Ltd vs DCIT (ITAT Bangalore) The AO noticed that the assessee has claimed deduction for ‘Provision for sales returns’. When enquired, the assessee submitted that it creates a provision for anticipated sales returns based on a percentage of the sales made each month. It was further submitted that the provision is created only towards the margin of the anticipated sales returns. It was explained that in the subsequent year, the actual sales returns are compared with the provision made in the books and the excess provision, if any, is reversed. The AO took the view that...