2021 (3) TMI 78

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....lows:- "2. Grounds relating to disallowance of warranty provision of Rs. 1,67,32,832 2.1. The learned CIT(A) has erred in confirming the disallowance of claim of provision for warranty amounting to Rs. 1,67,32,832. On facts and in the circumstances of the case and law applicable, provision for warranty amounting to Rs. 1,67,32,832/- is to be fully allowed as /deduction as claimed in the return of income. 2.2. The learned AO and CIT(A) have erred in not appreciating that, as there was a shift in the basis of warranty claim from payment basis to provision basis, the difference between cumulative provision and cumulative payment pertaining to earlier years was claimed during the year under consideration in order to e....

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....144C was completed on 16.10.2012. Subsequently, the CIT (LTU) Bangalore vide order u/s 263 dated 26.03.2015 found the order u/s 143(3) erroneous and prejudicial to the interest of revenue because the AO had allowed an amount of Rs. 1,67,32,832 claimed as warranty provision by the assessee for the AY 2008-09 which otherwise related to earlier years. Accordingly, the CIT set aside the order u/s 143(3) dated 16.10.2019. The AO concluded the assessment u/s 143(3) r.w.s. 263 on 28.09.2015 making addition of Rs. 1,67,32,832 on account of claim of excess warranty provision. 4. While computing the income, the AO made the following computation:- Particulars Amount in Rs. Amount in Rs. Total Income as per order dated 16/10/2012 &nbs....

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....ted computation in the 143(3) r.w.s. 263 order dated 28.9.2015 from the total income as per the original assessment order dated 16.10.2012 @ Rs. 462,90,59,697, wherein he has not given the benefit of TP adjustment which was reduced to Rs. 14,18,47,658 vide assessment order giving effect to ITAT order for AY 2008-09 on 20.1.2016. However, since the order giving effect to ITAT order for AY 2008-09 was not passed at the time of passing the order giving effect to 263 order on 28.9.2015, the AO had not considered it. However, this was noticed by the CIT(Appeals) and he has given a direction to reduce the original TP adjustment from Rs. 97,82,11,238 to Rs. 14,18,47,658. In other words, the AO is directed by the CIT(A) to start the computation of ....

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....be any provision disallowed which the assessee could claim in the subsequent years. As such, the claim as assessee at Rs. 167,32,832 which was claimed as earlier provision for warranty during this AY 2008-09 was directed to be disallowed by the CIT(Appeals) in his order u/s. 263 dated 26.3.2015. The same was complied by the AO in his Order Giving Effect to the 263 order passed us/. 143(3) r.w.s. 263 dated 28.9.2015. Now the contention of the ld. AR is that if it is disallowed in AY 2008-09, the same should be allowed in AY 2010-11 on the ground that it has offered the amount in AY 2011-12. 9. The contention of the ld. DR is that the assessee had not furnished requisite details before the lower authorities for claiming such deduction in A....