TaxTMI 
TaxTMI 
2014 (1) TMI 487
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.... by assessee. 2. On the facts and circumstances of the case and in law the CIT(A) has erred in deleting the addition of Rs.1,32,74,684/- made on account of provision for warranty and sales service. 3. On the facts and circumstances of the case and in law the CIT(A) has erred in deleting the addition of Rs.3,77,63,814/- made on account of expenditure on Airfare of Technicians booked under Technical guidance fee. 4. On the facts and circumstances of he case and in law the CIT(A) has erred in deleting the addition of Rs.32,78,626/- made on account of entry tax which was claimed as a deduction u/s 43 B. 5. On the facts and circumstances of the case and in law the CIT(A) has erred in deleting the addition of Rs.33,61,502/- made on ac....
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....at it. If that principle is applied to the facts of the present case and to the terms and conditions of technical collaboration agreement, it would be seen that the assessee obtained only the right to use, during the currency of the agreement, the technical knowhow and information and the intellectual property right relating to the manufacture of Honda cars and did not secure any ownership right over them. We, therefore, hold that the payment of lump sum fees for the technical know-how and the royalty is allowable as revenue expenditure..........." On the basis of above Tribunal's findings, the Ld. CIT(A) in para 6 of his order has held as under :- "I have carefully considered the submissions of the appellant and perused the order of ....
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....at in the past such expenses have been allowed by the Revenue. Even such claim of the assessee was allowed for the AY 2001-2002. This is not the case of the Revenue that the provisions made far exceeded the actual expenses incurred. In the case of Bharat Earth Movers V. CIT reported in 245 ITR 428, the Hon'ble Supreme Court has considered the general principles regarding allowance of business expenditure and the difference between the accrued and contingent liabilities. The very fact that the assessee had made provision only does not mean that the liability was not ascertained and contingent in nature. In fact, similar issued was considered by the ITAT, Amritsar Bench in the case of Jay Bee Industries v. DCIT reported in (1998) 61 TTJ 40....
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....and the facts on record. It is seen that an identical issue was involved in assessment year 2001-02 and 2002-03 wherein, Hon'ble Tribunal has decided in favour of the appellant. Therefore, following the orders of the Hon'ble Tribunal in the appellant's own case tabulated above, it is held that provision for warranty of Rs.1,32,74,684 is ascertained and accrued liability of the appellant. This ground of appeal is allowed." c) Disallowance of airfare of technicians:- The AO made the addition on this account holding that airfare borne by assessee related to Purchase & Works Department and in any case was an expenditure the benefit of which is of ending nature. The Ld. CIT(A) held as under :- "I have considered the submissions of the a....
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....to last addition of software expenses, the Ld. AR submitted before Ld. CIT(A) that website tracking and website online statistic tools was used for the purpose of tracking or providing security to website and was not to acquire an asset but it was to promote the business. Reliance was placed on the judgement of Hon'ble Delhi High Court in CIT vs Indian Visit Com Pvt. Ltd. reported in 2008-TOIL-448-HC-DEL-IT in which it was held that merely because expenditure may result in enduring benefits, it can not be classified as expenditure of a capital nature. It was further held in that case that in the case of expenditure on website, there is no change in fixed assets of the assessee. Reliance was also placed on the judgement of Hon'ble Delhi High....