Provision for Warranty Calculated on Scientific Basis as per AS 29 Can’t be Disallowed

CIT Vs AMCO Batteries Ltd. (Karnataka High Court)

The issue under consideration is whether the provision for warranty is allowable as deduction when the assessee has not made provision on a scientific basis?

High Court states that, the A.O. is not justified in holding that in all cases the provision is to be disallowed as expenditure. This has become the strict law of the past after the pronouncement of the Supreme Court in several cases that a provision can also become an

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