TaxTMI 
TaxTMI 
2016 (1) TMI 1172
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....ii) provision for warranty of Rs. 52,84,504/- (iii) exchange gain fluctuation (iv) Sale Proceeds not realized within time (v) Allocation of Royalty payment (vi) Reallocation of trading expenses-EHTP-I (Electronic hard ware Technology Part-1) (vii) Exclusion from export turnover of expenditure incurred in foreign currency in providing technical services (viii) Allowability of deduction u/s.10A for STPs located at Golden Enclave (ix) Adjustment of Prior Period exenses 3. The Assessing Officer proceeded to examine each of the claim made by the assessee. After consideration, the Assessing Officer concluded the assessment rejecting the claim made by the assessee. On appeal by the assessee, Appellate Commissioner allowed the appeal granting relief in favour of the assessee. Being aggrieved by the said order, the revenue preferred an appeal before the ITAT. The ITAT considering the various issues raised, proceeded to follow the view expressed by it in the assessee's own case relating to the earlier assessment years and granted relief in favour of the assessee, rejecting the appeal filed by the revenue against which, the revenue is in appeal under Section 260A o....
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.... unit at Golden Enclave which has commenced business prior to 01.04.1993 in respect of one floor and after 01.04.1993 in respect of two floors which was shifted to Hoody Village, would amount to reconstruction of business and the assessee would not be entitled to claim 10A deduction was held to be not correct? 9. Whether the Appellate Authorities were correct in holding that the adjustment entries for prior period expenses of Rs. 25,57,54,378/- should be allowed despite the assessee not substantiating the claim by adducing the any proff?. Re. question No.1: 4. Sri K V Aravind, learned counsel appearing for the revenue placing reliance on the Judgment of the Apex Court in the case of Rotork Controls India (P) Ltd. vs Commissioner of Income Tax reported in ((2009) 314 ITR 62) wherein, the assessee herein was also a party would strongly contend that, What is a provision is elaborately considered by the Apex Court and the parameters are set-out by the Apex Court to examine the recognition of provision for the purposes of the Act. The three Conditions to be satisfied for the recognition of the provision are: (a) an enterprise should have a present obligation as a re....
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....ccounting followed by the assessee is mercantile wherein the income and expenditure is on accrual basis. We have examined this issue in the light of the Judgment pronounced by the Apex Court in Rotork Controls Case (supra,) wherein the three tests are laid down to recognize a provision under the Act. The ITAT being a last fact finding authority has held that all these ingredients which goes to the recognition of provision are satisfied and as such, there is no need to remit the matter back to the Assessing Officer. In such circumstances, we do not see any ground made out by the revenue to remand the matter back to the Assessing Officer. The claim of expenditure being consistent with the method of accounting followed and the provision has been made on concluded transactions, the order of the Assessing Officer is held to be incorrect. We do not see any reason to differ from this view, which is in accordance with Section 145 of the Act. Re. Question No. 2 7. The learned counsel Mr. K V Aravind appearing for the revenue reiterated the grounds urged before the ITAT and sought for remanding the matter back to the Assessing Officer to examine the issue in the light of the Judgment o....
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....s no objections to the same. 16. Accordingly, we remand this issue to the Assessing Officer to examine whether allocating a portion of the royalty to EHTP Units as local sales is warranted or not after examining the pre-existing agreement entered into by the assessee with M/s Wipro Limited. Re. Question No.6 17. Learned counsel appearing for the revenue seeks to remand this issue also to the Assessing Officer as no adequate material was made available before the authorities to come to a conclusion that the allocation of expenditure as worked out by the assessee on account of consumables, salary etc. are applicable to the sales made through franchises. However, learned counsel appearing for the assessee would contend that Appellate Commissioner deleted the allocation of expenses made by the Assessing Officer based on the order of ITAT in the very same assessee's case reported in 81 TTJ 455 and the decision of the Apex Court in Indo Nipan Limited's case (261 ITR 775). It is noticed that over 5.6% of the sales is made through franchises, however, the assessee adopted sales as basis for allocation. The sale made through the franchises stands on a different footing t....
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....bove, after providing an opportunity of hearing to the assessee. All contentions are left open to the parties. Re. Question No.7 19. Both the parties agree that the issue involved in this question is squarely covered by the Judgment of this Court in the case of Tata Elexsi Ltd.'s case (349 ITR 98). In view of the same, this question is answered against the revenue and in favour of the assessee. Re. Question No.8 20. The issue involved herein is covered against the revenue in the Judgment rendered by this Court in ITA No.391/2008 disposed of on 10.06.2014 which is not disputed by the parties. Accordingly, we answer this question in favour of the assessee and against the revenue. Re. Question No.9 21. The Assessing Officer proceeded to disallow the loss claimed by the assessee on the ground that the assessee was making various inter unit transfers, it was necessary to examine the entries which were not recorded properly in the first instance. The assessee has not been able to substantiate this claim despite being given sufficient time for the credit entries made and neither has given any background for such high value reverse entries. Assessing Officer was of th....