Dismissing the appeal of the revenue the Court held that provision for warranty on scientific basis, allowable as deduction. Court also held that payment of market support fee and transmission fee for smooth running of business is allowable as revenue expenditure. Applied the ratio in Empire Jute Co Ltd v. CIT (1980) 124 ITR 1 (SC), Rotork Controls India (P) Ltd (2019) 314 ITR 62 (SC). (AY.2007-08)
PCIT v. Lenovo India Pvt. Ltd. (2021) 433 ITR 117 203 DTR 306/ 280 Taxman 72/ 323 CTR 723 (Karn.)(HC)
S. 37(1) : Business expenditure-Provision for warranty on scientific basis-Allowable as deduction-Payment of market support fee and transmission fee for smooth running of business-Allowable as revenue expenditure.