12 October 2010
Sir A Pvt. CO. give warranty for goods sold by it @ 5% of the value of goods.So it make provision in books for it as on last date of the Financial year.Please tell me whether this provision is allowed as an expense under Income tax Act.My view is it should not be allowed since provisions are not allowed under the income tax act.Please Clarify the doubt with relevent sections.
CAclubindia
