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2024 (1) TMI 1131
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....he Act as appearing in Form 26AS of the Appellant; 2. The Assessing Officer / Commissioner of Income-tax (Appeals) has erred in making an addition of Rs. 5,13,731/- representing a mismatch between Form 26AS and the Return of Income without appreciating that the same has never accrued to the Appellant and is erroneously appearing in the said Form; 3. The Id. Assessing Officer / Commissioner of Income-tax (Appeals) has erred in levying interest under section 115-P of the Act on the amount of DDT liability without appreciating that the same has already been paid within the statutory timeline; 4. The ld. Assessing Officer/Commissioner of Income-tax (Appeals) has erred in levying interest under section 234D of the Act, 5. The Appellant craves leave to add, alter, amend, substitute and/or modify in any manner whatsoever modify all or any of the foregoing grounds of appeal at or before the hearing of the appeal. Each of the grounds of appeal is without prejudice to the other." Revenue: "1) "On the facts and circumstances of the case and in Law, the Ld.CIT(A) has erred in holding that the provision of warranty is an allowable expenditur....
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....r, however, while preparing the statement of assessed total income the AO did not credit for the Dividend Distribution Tax paid by the assessee to the tune of Rs. 32,44,500/. The ld. AR further submitted that the CIT(A) while dismissing the ground has misunderstood the claim of the assessee that the assessee is claiming credit against the amount of tax which is incurred. The ld AR submitted that the assessee claiming the credit against the Dividend Distribution Tax payable and not regular tax payable. The ld. AR drew our attention to the relevant observations of the CIT(A) in this regard which is extracted below: "4.7 Ground No. 8-Credit of Dividend Distribution Tax not granted On perusal of the appellant's submissions, it appears that the appellant wants to claim the credit for the dividend distribution tax paid. As per section 1150(4) of the Act, tax on distributed profits paid by the company shall be treated as the final payment of tax in respect of the amount declared, distributed or paid as dividends and no further credit in respect of the amount of tax so paid shall be claimed by the company or by any other person. In term of the provisions of s....
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....missioner of Income-tax, Range 10(2)(2), Mumbai for Assessment Year 2011-12. Admittedly, the appeal of the assessee was dismissed by the Tribunal, for the reason, that the issue as regards quantification of DDT did not arise from the order passed by the CIT(A). On the other hand, the CIT(A) had declined the assessee's claim on the basis of a misconceived fact that the assessee was seeking credit of DDT against its tax liability on the total income. We have given a thoughtful consideration and find substantial force in the contentions advanced by the ld. A.R. As observed by us herein above, the Hon'ble Apex Court had Court in the case of Kalyankumar Ray Vs. CIT (1991) 191 ITR 634 (SC) and CIT, Delhi Vs. Bhagat Construction Co. (P) Ltd. (2015) 60 taxman.com 334 (SC), had observed, that that computation/quantification of the "tax" and "interest" liability of an assessee, though carried out on a different sheet of paper and the A.O approves of it, either immediately or sometime later, would form part of the assessment order. Also, by way of an analogy drawn from the judgment of the Hon'ble Apex Court in the case of Genpact India (P). Ltd. Vs. Dy. CIT (2019) 111 taxmann.com 402 (SC), it....
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....orrect, since the assessee is seeking to adjust the Dividend Distribution Tax paid against the Dividend Distribution Tax payable computed by the AO. In view of this discussion and respectfully following the above decision of the Co-ordinate Bench in assessee's own case, we direct the AO to given credit to the extent of the Dividend Distribution Tax actually paid by the assessee as per the documentary evidences submitted by the assessee after giving a reasonable opportunity of being heard to the assessee. It is ordered accordingly. 11. Ground No. 3 with regard to levy of interest under section 115P of the Act on the amount of Dividend Distribution Tax payable. The AO has levied the interest under section 115P on the Dividend Distribution Tax payable without giving credit for the Dividend Distribution Tax actually paid by the assessee. We have already directed the AO to give credit for the Dividend Distribution Tax actually paid by the assessee while adjudicating Ground No.1. Accordingly the AO is directed to examine levy of interest under section 115P which is consequential, after giving credit to the Dividend Distribution Tax actually paid in accordance with law. 12. Grou....
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....tted by the AO, the assessee has no reason not to account for such a meagre amount to avoid tax. 14. The Ld. DR relied on the order of the AO. 15. We have heard the parties and perused the material on record. The assessee during the course of assessment has furnished a detailed reconciliation of the receipts as per From-26AS and books of accounts. The claim of the assessee is that the impugned receipts from 10 parties do not belong to the assessee and therefore, not accounted in the books of accounts. The assessee also claims that no credit for the TDS deducted is made by the assessee and this fact is not disputed by the AO. The AO made the addition stating that the assessee has not substantiated that the amounts are not received and that it does not belong to the assessee. In this regard, it is relevant to notice that the assessee in the reconciliation submitted before the AO has reconciled majority of line items running to 19 pages and only 10 receipts remain un-reconciled. Further the assessee categorically denied the 10 transactions with those entities in the impugned assessment year. We are of the considered view that merely based on TDS statement in Form 26AS the additi....
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.... is partly allowed. ITA No. 5789/M/2017- Revenue's appeal 20. The assessee during the year under consideration has claimed a sum of Rs. 3,34,46,445/- as expenditure in the P&L A/c towards provision for warranty claims. The assessee during the course of assessment has made an elaborate submission dated 09.02.2015 explaining the basis on which the provision is made to substantiate that a scientific method is used for arriving at the amount of provision and also the details of the warranty provision made and the warranty utilized during earlier years i.e. from AY 2005-06. The assessee also submitted that the unutilized portion of the provision made towards warranty is reversed to the P&L A/c and is offered to tax. Therefore, the assessee submitted that the provision towards warranty claims should be allowed as a deduction. The assessee also relied on various judgments in support of the claim. The AO after perusing the various details submitted by the assessee held that the utilization to provision ratio of the assessee comes to only 38.5% which goes to prove that the assessee has failed to make a reliable estimation of the future obligations with respect to warranty expenses....
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....uring the year Rs. 3,34,46,445/- + Actual expenses incurred Rs. 1,72,28,967/-). e. Assessee may have offered certain amounts by writing back, the excess provisions in subsequent years, however, the fact remains that as on 01.04.2012, Assessee carries an unutilized provision amounting to Rs. 4,55,59,759/- which has already been claimed as an expense in earlier assessment years. The claim of the Assessee, for actually incurred expenses may be allowed in the assessment years to come when such provision is already exhausted. However, as on 31/03/2013, the said provision for warranty exists and therefore, no claim of expenses actually incurred during the year shall be allowed. Therefore, during the year, claim on such account was denied and the provision for warranty debited to the Profit & Loss Account for the year ended 31.03.2012 amounting to Rs. 3,34,46,445/- (refer para 6.14) was disallowed and added back to the total income of the Assessee. f. Further, since the provision made for warranty claims was only ad-hoc, arbitrary, defy and logic, devoid of any scientific or rational basis and in no way based on the past experiences, the same cannot be considered as a pr....
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....warranty that may vary from 12 to 15 months. The assessee has been consistently following the practice of making provision towards the warranty and the same is claimed as a deduction. It is also noticed that at the ends of the warranty period the unutilized portion of the provision of warranty is reversed and credit to the P& L A/c thereby offering the same to tax. The reason for the disallowance by the revenue is that the basis of estimation for making the provision is not reliable since the utilization is only 38.5% for the year under consideration. We in this regard notice that a similar issue has been considered by the Co-ordinate Bench of the Tribunal in assessee's own case (supar) where it has been held that "2.3 After going through rival submissions and perused the material on record, we find that such provision for warranty in the business of assessee of trading and servicing of specialized medical equipment. Assessee's contention that such warranty was necessary and was part of contract of sale was rightly accepted. As per accounting system regularly followed by assessee, such provision was made @ 2% of sales and would written back if in excess at the expiry o....