Topic
ITAT Delhi upholds deduction for warranty provisions as accrued liability under Section 37(1) and full R&D expenditure under Section 35(2AB), citing Rotork Controls precedent. Ruling benefits corporates claiming contingent liabilities and innovation expenses.
ITAT Ahmedabad rules that warranty provisions calculated through past experience and scientific estimation qualify as ascertained liabilities under Section 115JB, barring their addition to book profits. This clarifies the tax treatment of contingent liabilities for corporate taxpayers, ensuring compliance with accounting standards while preventing double taxation.
ITAT Pune rules that the Commissioner's revisionary powers under Section 263 IT Act cannot be invoked to reassess depreciation on goodwill or warranty provisions already correctly allowed by the Assessing Officer. The ruling underscores that revisionary jurisdiction requires evidence of erroneous or prejudicial orders, not mere re-examination of settled claims.
ITAT Delhi holds warranty provisions are deductible as accrued liabilities under accrual accounting, and remands transfer pricing issue for consistent treatment with prior rulings.