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4. Aggrieved with the order of Assessing Officer, Assessee filed appeal before the CIT(A). During First Appellate proceedings, apart from giving the calculation on the basis of internal evaluation, the assessee relied heavily on the Judgment of the Hon'ble Supreme Court of India in the case of Rotork Controls India Ltd. reported as 314 ITR 62 wherein it was held that "the present value of a contingent liability, like warranty expense, if properly ascertained and discounted on actuarial basis, can be an item of deduction u/s.37 of the I.T.Act." He also referred to the ratio laid down by the Hon'ble Apex Court in the case of Indian Molasses Co.(P.) Ltd. Vs. CIT (SC) reported as 37 ITR 66 in favour of the Revenue. The CIT(A) extracted the written submissions of the assessee, extracted the operative paragraphs from the Hon'ble Apex Court judgment in the case of Rotork Controls India ltd. (supra.), tabulated data relating to the matter of deciding this issue in the assessee's own case since assessment year 1998-99 onwards in Para 4 of his order and granted relief to the assessee. The CIT(A) also relied on the decisions of the Tribunals as well as judgments of Hon'ble Jurisdictional High Court in assessee's own case etc. and held as under :

In this regard, I also place reliance on the judgment rendered by the Hon'ble Supreme Court in the case of Rotork Controls India Ltd.(supra.), wherein it has been held that a liability determined on a scientific basis cannot be regarded as a contingent liability and the provision made for warranty in respect of goods should be allowed u/s. 37(1) of the Act. Respectfully, following the decisions of Hon'ble ITAT "E" Bench, Mumbai in ITA Nos. 3677 & 8219/Mum/2004, Hon'ble Supreme Court in the case of Rotork Controls India Limited and the Apex Court in the case of Indian Molasses Co. (P.) Ltd., I have no hesitation in deleting the disallowance made by the AO on account of provision for warranty of Rs.1,53,30,352/- and After Sales Cost of Rs.3,95,09,000/-. Hence, ground No.1 stands adjudicated."

5. Aggrieved with the relief granted by the CIT(A) to assessee, the Revenue is in appeal before us with the grounds extracted above.

6. Before us, the Ld. DR for the Revenue heavily relied on the order of Assessing Officer and submitted that Assessee has not furnished proper calculation and details of the expenditure incurred on account of said provisions i.e. provision of warranty and After Sales Cost.

7. On the other hand, the Ld. Counsel for the assessee described the manner in which the Assessing Officer made addition without considering the submissions of the assessee in right perspective. Relying heavily on the order of CIT(A), Ld. Counsel submitted that, on similar facts, the claim of the assessee was allowed in previous assessment years in assessee's own case. He cited the list of cases in which relief was granted by the Tribunal A.Y.2010-11 and the Hon'ble High Court relying heavily on the data tabulated in CIT(A)'s order in Para 4 ( Page-7). He also relied on the Apex Court judgment in the case of Rotork Controls India Ltd. (supra.). He further submitted that upto 80% of the actual provision was finally utilized in the next to next year (12 to 18 months of the warranty period.)

From the table extracted above, it is evident that the claim of the assessee in principle is allowed by the Hon'ble Jurisdictional High Court in assessee's own case in many assessment years i.e. 1998-99 to 2009-10. It is also evident from the above table that the Assessing Officer himself allowed claimed of the assessee in assessment year 2002-03 and 2009-10. In same assessment year, the Department accepted the said decision of the Tribunal and never filed appeal before the Hon'ble Bombay High Court. As such, decision of CIT (A) is, in principle, as per judgment laid down by the Hon'ble Apex Court in the case of Rotork Controls India Ltd. (supra.). It is a settled legal principle that in any case where estimation is done based on scientific method and calculated properly, the provision made for warranty in respect of goods should be allowed u/s. 37 (1) of the Act. Therefore, we are of the opinion that the order of the CIT(A) is fair and reasonable and the same does not require any interference. Accordingly, grounds raised by the Revenue are dismissed.