TaxTMI 
TaxTMI 
2013 (7) TMI 392
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....n the circumstances of the case, the Appellate Tribunal is right in law in not referring to and following the judgment of the Supreme Court in the case of Rotork Controls India P. Ltd. v. CIT [2009] 314 ITR 62 relied on and cited before it at the time of hearing ?" The assessee is engaged in the manufacture of shock absorbers. For the assessment year 2004-05, the assessee filed its return of income claiming a loss of Rs. 4,89,62,328. The return was processed under section 143(1) of the Income-tax Act. The regular assessment was completed under section 143(3) thereby determining the loss as Rs. 4,65,01,833 after making certain adjustments. The Commissioner of Income-tax issued a show-cause notice under section 263 of the said Act by point....
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....the correct amount of provision for warranty created during the year by calling for and examining the relevant details and then to disallow the same in computing the total income. Aggrieved against the order of the Commissioner, the assessee went on appeal before the Tribunal. By its order dated September 11, 2009, the Tribunal rejected the contention of the assessee and thereby dismissed the appeal. Aggrieved against the said order, the present appeal is filed by the assessee. Heard the learned counsel appearing for the assessee as well as the learned standing counsel appearing for the Revenue and perused the materials available on record. The learned counsel appearing for the assessee submitted that in earlier assessment years th....
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....sequent year, the balancing provision will certainly be shown on higher side year by year and, therefore, the assessee is not correct in contending that there is no revenue loss. He relied on an unreported decision of this court made in CIT v. Forbes Campbell Finance Ltd. (T. C. (A.) Nos. 148 to 155 of 2005, dated July 9, 2012) since reported in [2013] 352 ITR 602 (Mad) in support of his submissions. From the perusal of the materials placed before us and upon hearing the respective submissions made by the counsel appearing for the parties, it is seen that the Assessing Officer completed the assessment and assessed the loss as Rs. 4,65,01,833. However, the Commissioner, on finding that a sum of Rs. 1,78,13,444 had been debited towards war....
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....ket and original equipment is debited to the accounts by passing a journal voucher. Therefore, the Commissioner had found, that the said provision has been worked out on an estimate basis even though it was claimed by the assessee that the accrual for warranty costs in respect of sales are made on the basis of technical and other estimates. He further pointed out that if the assessee had analysed each and every sale bill raised by it and marked out the particular item/items, which generally were susceptible to the enforcement of the warranty by the purchasers and thereupon arrived at the required provision on the basis of sale value of the particular items involved, then such a provision could be called to have been made on a scientific bas....
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.... erroneous order of the Income-tax Officer, the Revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the Revenue. It is further observed that in the said case as follows (page 88) : "In the instant case, the Commissioner noted that the Income-tax Officer passed the order of nil assessment without application of mind. Indeed, the High Court recorded the finding that the Income tax Officer failed to apply his mind to the case in all perspective and the order passed by him was erroneous. It appears that the resolution passed by the board of the appellant company was not placed before the Assessing Officer. Thus, there was no material to support the claim of the appellant that the said amou....
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....T [2009] 314 ITR 62 (SC) to substantiate his contention that the estimated provision for warranty cost is allowable. The very same decision was considered by the Division Bench of this court in CIT v. Forbes Campbell Finance Ltd. (T. C. (A.) Nos. 148 to 155 of 2005, dated July 9, 2012) since reported in [2013] 352 ITR 602 (Mad) wherein it was observed at paragraphs 14 and 16 as follows (pages 607 and 608) : "We reject the claim of the assessee on both counts. As far as the reliance placed on the decision reported in Rotork Controls India P. Ltd. v. CIT [2009] 314 ITR 62 (SC) is concerned, in considering the claim on a provision made for warranty claim, the apex court held that 'a provision is recognised when : (a) an enterprise has a pre....