Warranty Provision Allowed Despite Large Opening Balance: ITAT Delhi

Marelli Um Electronic Systems Private Limited Vs DCIT (ITAT Delhi) Warranty Provision Is Allowable Business Expenditure: ITAT Deletes Disallowance Despite Large Opening Balance Delhi ITAT allowed the Assessee’s appeal and deleted the disallowance of ₹32.75 lakh made towards provision for warranty. The Tribunal held that warranty provision, when created on the basis of consistent accounting policy, past experience and historical trend, constitutes an ascertained liability deductible u/s 37, even if a substantial opening balance already exists. Relying heavily on the Supreme Court ruling in ...