AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (8) TMI 2100
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....sional charges is opposed to law and to facts and requires to be deleted." 4. The facts necessary for adjudication of Gr.No.2 are that the Assessee which is a company is in the business of manufacturing and marketing of pressure cooker, cookware and domestic electrical appliances. The Assessee had claimed deduction of a sum of Rs.16,79,343/- while computing income from business. The said sum was legal and professional charges paid to M/s. Talwar, Thakore Associates who were consultants appointed to conduct due diligence with regard to title to the industrial land and compliance of conditions for running industry on the land owned by M/s. Triveni Bialetti Industries Pvt.Ltd. The Assessee was considering acquisition of the said business and claimed that the said expenditure was revenue expenditure incurred wholly and exclusively in connection with the business of the Assessee and should be allowed as a deduction. The AO held that the expenditure was capital expenditure and cannot be allowed as deduction because the expenditure was incurred in connection with acquisition of capital asset which will give enduring benefit to the Assessee. 5. On appeal by the Assessee, the CIT(A) held ....
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....d sum to the total income in the computation of total income. The AO however did not agree with the submission of the Assessee and was of the view that the expenditure to be disallowed u/s.14A of the Act has to be worked out on the basis of Rule 8D(2)(ii) & (iii) of the Income Tax Act Rules, 1962 (Rules). Accordingly, he made a disallowance of Rs.16,16,357/-, comprising of disallowance of interest expenditure of Rs.2,20,292 [under rule 8D(2)(ii) of the Rules] and a sum of Rs.15,40,250/- [under Rule 8D(2)(iii) of the Rules] as other expenses. 10. On appeal by the Assessee, the CIT(A) upheld the disallowance made by the AO, hence Gr.No.3 by the Assessee before the Tribunal. 11. The learned counsel for the Assessee reiterated submissions as were made before the CIT(A) and submitted that the AO has not arrived at a satisfaction regarding the correctness or otherwise of the claim of the Assessee that there was no expenditure incurred in earning the exempt income and therefore the disallowance u/s.14A of the Act has to be held as bad in law. He relied on the decision of the Hon'ble Delhi High Court in the case of H.T. Media Ltd. Vs. Prl.CIT 399 ITR 576 (Del) in support of the above con....
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.... on the assessed income resulting in excess levy of Rs.58,79,523 [Rs.68,28,742 (-) 9,49,219]." 15. We are of the view that the contentions of the assessee require examination by the AO and for this purpose, we remand the issues to the AO to consider the submission and if found true to charge interest u/s.234B and 234C of the Act, on the basis suggested by the Assessee, which is in accordance with the provisions of Sec.234B and 234C of the Act. 16. In the result, appeal being ITA No.2185/Bang/2014 is treated as allowed for statistical purpose. ITA No.2228/Bang/2016. (Revenue's appeal for AY 2011-12) 17. This is an appeal by the Revenue against the order dated 27.9.2016 of CIT(A)-7, Bengaluru, relating to AY-2011-12. The grounds of appeal raised by the Revenue relates to the deduction allowed by the CIT(A) on account of provision for warranty while computing income from business. The Assessee claimed deduction of a sum of Rs.2,89,83,572/- as provision for warranty liability on the pressure cookers and electronic items sold by it. The AO disallowed the claim for deduction for the reason that the estimation of liability based on which provision for warranty liability was made by t....
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....e addition made by the AO by accepting the submission of the Assessee that the basis given by the Assessee for making provision on account of warranty liability was scientific. Aggrieved by the order of the CIT(A), the revenue has preferred the present appeal before the Tribunal. 19. We have heard the rival submissions. The learned DR relied on the order of the AO, the learned counsel for the Assessee relied on the order of the CIT(A). We have gone through the order of the AO and the CIT(A). The Hon'ble Supreme Court in the case of Rotork Controls India Pvt. Ltd. 314 ITR 62 (SC) wherein the Hon'ble Supreme Court has laid down three conditions for provision to be regarded as liability which are as follows. "10. What is a provision? This is the question which needs to be answered. A provision is a liability which can be measured only by using a substantial degree of estimation. A provision is recognized when: (a) an enterprise has a present obligation as a result of a past event; (b) it is probable that an outflow of resources will be required to settle the obligation; and (c) a reliable estimate can be made of the amount of the obligation. If these conditions are not met, no prov....
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.... the AO for fresh consideration on the same lines as was directed in AY 2011-12. 26. We thus allow the appeal of the Assessee being ITA No.2186/Bang/2016, for statistical purpose. ITA No.2229/Bang/2016: (Revenue's appeal for AY 2012-13) 27. The grounds of appeal of the Revenue reads as follows: "1. The order of the learned CIT (A) is opposed to law and facts of the case. 2. Whether on the facts and in the circumstances of the case, the CIT(A) was justified in law in deleting the addition made by the AO on account of warranty provisions, ignoring the fact that all the condition as laid down by the Hon'ble Apex Court in the case of Rotork Controls India (P) Ltd vs. CIT 314 ITR 62 for claim of warranty provisions are not satisfied. 3. For these and other grounds that may be urged at the time of hearing, it is prayed that the order of the CIT(A) in so far as it relates to the above grounds may be reversed and that of the Assessing Officer may be restored. 4. The appellant craves leave to add, alter, amend and/or delete any of the grounds mentioned above." 28. At the time of hearing the parties agreed that the facts and circumstances under which the aforesaid grounds of....