Provision for warranty expenses for ascertained liabilities calculated on technical estimates deductible

Huawei Telecommunication (India) Company Pvt Ltd, Vs ACIT (ITAT Delhi) In the trading and installation services of the telecom equipment, The assessee provides warranty to the buyers. As part of the contract with the customers, it is required to provide warranty services by way of repair and replacement for a predefined period. The obligation of the appellant to provide the services is inbuilt in the contract for the sale and services only. Therefore, apparently assessee is supposed to incur certain expenditure over the period of warranty claim contract. The assessee made a provision based on ...