IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORIDINARY ORIGINAL CIVIL JURISDICTION ORIDINARY ORIGINAL CIVIL JURISDICTION ORIDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.128 OF 2008 INCOME TAX APPEAL NO.128 OF 2008 INCOME TAX APPEAL NO.128 OF 2008 WITH WITH WITH INCOME TAX APPEAL NO.341 OF 2006 INCOME TAX APPEAL NO.341 OF 2006 INCOME TAX APPEAL NO.341 OF 2006 WITH WITH WITH INCOME TAX APPEAL (LOD) NO.1098 OF 2007 INCOME TAX APPEAL (LOD) NO.1098 OF 2007 INCOME TAX APPEAL (LOD) NO.1098 OF 2007 The Commissioner of Income Tax ..Appellant. V/s. M/s.Hinditron Services Pvt. Ltd. ..Respondent. Mr.R.Ashokan for applicant. Mr.A.Vissanjifor respondent. CORAM : D.K.DESHMUKH & CORAM : D.K.DESHMUKH & CORAM : D.K.DESHMUKH & J.P.DEVADHAR, JJ. J.P.DEVADHAR, JJ. J.P.DEVADHAR, JJ. DATED : 8TH AUGUST, 2008 DATED : 8TH AUGUST, 2008 DATED : 8TH AUGUST, 2008 P.C. :- P.C. :- P.C. :- 1. The revenue is aggrieved by the orders of the Tribunal wherein it is held that the provision for estimated costs of rendering the warranty services debited to the profit and loss account was not a contingent liability and that the said expenditure was allowable expenditure. 2. Admittedly, the expenditure in question has been consistently allowed in the case of the assessee since the assessment year 1989-90. The Tribunal has recorded a finding that there is a full - = : 2 : = - scale service departmment run by the assessee and there is a particular method by which the expenses are estimated by the assessee. The authorities below have also relied upon a decision of the Apex Court in the case of Calcutta Co. Ltd. 37 I.T.R. 1 wherein it is held that where the assessee is following the mercantile system of accounting, estimate of accrued liability to be discharged at a future date is an allowable expenditure. Moreover, the appeal filed by the revenue against the decision of the Tribunal for the assessment year 1989-90 has already been dismissed for default and no efforts have been made to restore the said appeal. 3. In these circumstances, we see no merit in these appeals and accordingly, all the appeals are dismissed with no order as to costs. (D.K.DESHMUKH, J.) (D.K.DESHMUKH, J.) (D.K.DESHMUKH, J.) (J.P. DEVADHAR, J.) (J.P. DEVADHAR, J.) (J.P. DEVADHAR, J.)