Section 37 of the Income Tax Act, 1961 — Business Expenditure — Provision for warranty claim made by the assessee in the relevant year in view of the mercantile system of accounting followed by it was allowable as deduction since the warranty against any defect in the aircraft engines supplied by the Russian company UFA to the IAF is to be discharged jointly by the assessee and UFA as per the terms of the tripartite agreement the parties and UFA refused to acknowledge its liability for damages after an aircraft met with an accident owing to engine failure and this fact was established on completion of the enquiry in the year 2006 — Indo Russian Aviation Ltd. vs. Assistant Commissioner of Income tax [2018] 196 TTJ (Pune) 656