AI Drafter 
TaxTMI 
TaxTMI 
2022 (3) TMI 1285
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....ty expenses. 2.1 On the facts and in the circumstances of the case, the ld.CIT(A) grossly erred in law and in fact in confirming the disallowance made by the Assessing Officer (AO) with respect to provision for warranty expenses of Rs. 300,726,000 which was made on the basis of past experience and on a scientific basis. 2.2 On the facts and circumstances of the case, the ld.CIT(A) erred in law and facts in not following the favourable judicial precedent of the Hon'ble jurisdictional Tribunal in appellant's own case for A.Y. 1996-97. 4. Disallowance under section 14A of the Act, read with Rule 8D of the Income Tax Rules, 1962 (Rules). 4.1 On the facts and in the circumstances of the case, the ld.CIT9A) erred in sustaining disallowance made by the AO of Rs. 9,304,441 under section 14A of the Act by applying the provisions of Rule 8D of the Rules. 4.2 On the facts and in the circumstances of the case, the ld.CIT(A) erred in not appreciating the fact that no part of the investment was made out of interest bearing loan funds. 4.3 On the facts and in the circumstances of the case, the ld.CIT(A) erred in not appreciating the fact that ....
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....ng the year. Though exact amount cannot be quantified, however, the same is based on scientific approach and based on past experience. 3. At the time of hearing, the learned DR relied on the decision of the Madras High Court in the case of CIT v. Rotork Controls India Ltd. & Others (293 ITR 311). In the aforesaid decision, as there was no evidence of actual expenditure in prior years, the provision was concluded as not deductible. Facts are different in the present case. The learned CIT(A) has considered the details meticulously and then granted relief to the assessee. After going through the facts of the case, we do not find any infirmity in the order of the learned CIT(A) granting relief to the assessee as the provision was made on the sales effected during that year. It is ordered accordingly." 4.3 In view of the co-ordinate Bench order of the Tribunal in assessee's own case, which is identical to the facts of the instant case, we direct the A.O. to allow the provision for warranty as an allowable deduction. Therefore, ground 2 is allowed. Disallowance u/s 14A of the I.T.Act (Ground 4) 5. The Assessing Officer had made disallowance u/s 14 of the I.T.Act r.w.r. ....
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....average value of investments, as per order of Special Bench in the case of ACIT v. Vireet Investment Pvt. Ltd. (supra). The learned DR did not have objection to the above submission of the learned AR. Therefore, we set aside the order passed by the CIT(A), as regards the disallowance u/s 14A r.w.rule 8D(2)(iii) of the I.T.Rules and restore the matter to the files of the A.O. The A.O. is directed to follow the ratio of the decision rendered by the Special Bench in case of ACIT v. Vireet Investment Pvt. Ltd. (supra). It is ordered accordingly. 6. In the result, the appeal filed by the assessee is partly allowed. ITA No.1837/Bang/2013 (Revenue's appeal) 7. Five grounds are raised in the memorandum of appeal, Ground 1 and 5 are general in nature and no adjudication is called for, hence, the same are dismissed. The effective grounds read as follows:- "2. The ld.CIT(A) erred in directing the AO to deduct telecommunication expenses incurred in foreign currency from total turnover and from export turnover as this is against the provisions of section 10A. 3. The ld.CIT(A) ought not to have admitted additional evidence of commission payment disallowed u/s 40(a)(ia)....
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.... In the result, the amount of Rs. 4,29,93,593/- is disallowed u/s 40(a) added back to the total amount of the assessee (Addition Rs. 4,29,93,593/-)." 9.1 The CIT(A), on further appeal, granted partial relief. The CIT(A) directed the A.O. to delete the disallowance made on cash disallowance by holding that cash discount by its very nature is not liable for TDS as amount is given as reduction in invoice for prompt payment. 9.2 The learned Standing Counsel's limited prayer is that the matter needs to be restored to the A.O., since the CIT(A) decided the issue in favour of the assessee by admitting additional evidence and without giving the A.O. an opportunity to examine the additional evidence. 9.3 The learned AR, on the other hand, submitted that no additional evidences were produced before the CIT(A). It was stated that the details of cash discount and foreign commission were already on record before the A.O. On the break-up of same was provided to CIT(A) on his request. 9.4 We have heard rival submissions and perused the material on record. The limited submission of the learned Standing Counsel is to remit the issue to A.O. According to the learned Standing Counsel, the....