TaxTMI 
TaxTMI 
2023 (4) TMI 1053
X X X X Extracts X X X X
X X X X Extracts X X X X
....ITA No. 827-828/2018 and ITA No. 829-830/2018 by the assessee directed against the orders dated August 03, 2018 in ITA No. 422 & 423/Bang/2018 and October 10, 2018 in Misc. Petn. Nos. 279 & 280/Bang/2018 respectively, have been admitted to consider the following question of law: "Whether the Tribunal was justified in not allowing the provision for warranty in excess of 2.14 percent of sales without considering the orders passed by its co-ordinate Benches in the appellant's own case for the asst. year 2003- 2004, 2005-2006, 2007-2008, for deduction of provision for warranty created by the appellant, without there being any change in the facts and circumstances in asst. year 2013-2014 and asst. year 2014-2015?" 2. ITA No. 294/2018....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Assessee filed returns for the A.Y. [Assessment Year] 2013-14 and 2014-15 declaring total income of Rs. 162,73,33,230/- and Rs. 212,12,89,800/- respectively. The AO [Assessment Officer] vide order dated December 29, 2016, disallowed the claim of warranty provisions and concluded that the assessee has not followed the guidelines laid down by the Hon'ble Supreme Court in M/s Rotork Controls India (P) Ltd Vs. CIT [2009] 180 Taxman 422 (SC) (hereinafter referred to as the 'Rotork Case') and that the method followed to create the provision was not scientific. 5. On appeal, CIT(A) [Commissioner of Income Tax (Appeal)] and ITAT have confirmed the order passed by the AO. Hence, these appeal. 6. Shri. Percy Pardiwala, for the Assessee, prayi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....enue, submitted that: • the Apex Court in Rotork Case has laid down the guidelines to determine the provisions for warranty, and the same has not been followed by assessee; • the provision for warranty has not been calculated in a scientific method; • the policy adopted by the assessee is not robust because the settled system of evaluation of outstanding provisions and system of reversal of the excess provisions has not been followed; • the actual utilization is less than the provision made. With these submissions, Shri. K.V. Aravind prayed for dismissal of these appeals. 8. We have carefully considered rival contentions and perused the records. 9. In assessee's own case in ITA No....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt reads thus: Assessment Year (1) Opening balance (2) Provision debited to P/L account (3) Actual expenses incurred Closing Balance Sales *3/6 **4/6 (1) (2) (3) (4) (5) (6) 2007-08 2,38,46,557 8,99,35,376 8,08,26,871 3,29,55,062 1,39,93,51,676 6.43 2008-09 3,29,55,062 8,25,70,227 8,33,79,038 3,21,46,251 2,18,97,22,707 3.77 5.96 2009-10 3,21,46,251 14,40,19,057 12,42,67,639 5,18,97,669 4,43,69,70,700 3.25 5.68 2010-11 5,18,97,669 17,75,89,409 12,78,97,272 10,15,89,806 4,56,52,93,882 3.89 2.88 2011-12 10,15,89,806 18,74,41,965 18,22,20,342 10,68,11,429 5,93,99,1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arefully perused the same. In that case, AO had disallowed Rs. 5,10,83,253/- being the provision for warranty. The Tribunal held that the said issue was covered in the favour of assessee by various orders passed by the Tribunal in assessee's own case for A.Y.s 2003-04, 2005-06, 2006-07, and 2007-08 and that for A.Y. 2003-04, the matter was taken to this Court also and ultimately assessee's stand has been upheld. He submitted that para No. 4.9 in the Assessment Order for A.Y. 2013-14 and para 3.9 in the Assessment order for A.Y. 2014-15 show that the AO has based his order on DRP's directions for A.Y. 2011-12. As recorded herein, the Assessment order based on the said direction by the DRP has been set-aside by the Tribunal vide order dated S....