TaxTMI 
TaxTMI 
2025 (9) TMI 790
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....he learned AO on 24/3/2014 was partly allowed. 2. Therefore, both the parties are aggrieved with the appellate order and are in appeal before us. The assessee has preferred following grounds of appeal in ITA number 1245/B/2015: - "Based on the facts and circumstances of the case, Hewlett-Packard India Sales Private Limited ("HPISPL" or "the Appellant") respectfully submits that: 1. The Learned Commissioner of Income tax (Appeals) - Large Taxpayers Unit ("CIT(A)"] has erred in not specifically adjudicating on the grounds preferred by the Appellant, against various adverse comments / remarks made by the Joint Commissioner of Income-tax, Large Taxpayers Unit ("AO") in the assessment order and holding that these matters are general in nature and do not require separate adjudication. 2. The CIT(A) has erred in law and on facts, on one hand, appreciating the Appellant's difficulty in collating the information sought and on the other hand, stating that the AO has granted sufficient opportunity to furnish data called for, by merely referring to notices issued and order sheet notings, without correlating the voluminous information sought, time gran....
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....cepted Appellant's explanation on claim of deduction of miscellaneous expenses, has erred in law and on facts in directing the AO to disallow expenses having invoice dates prior to April 1, 2009, without appreciating the accounting procedures / policies followed by the Appellant as per the mercantile system of accounting. 5.2 Without prejudice to the above ground, the CIT (A) has erred in law and on facts in not directing the AO to grant relief for the alleged expenses in the respective previous year to which invoice is dated, given that CIT(A) has stated that the genuineness of the expense is not doubted. 6. Expenses debited as 'cost of goods sold' 6.1 The CIT(A) has erred in law and on facts in upholding the addition in respect of 'Accruals - products spare parts scrapped' of Rs 4,900,009 for want of evidence, without appreciating that the Appellant had furnished substantial evidence in respect of addition made under head 'Product spare parts scrapped' during Appellate proceedings and which also was accepted by the CIT(A). 6.2 The CIT(A), has erred in law and on facts in upholding the addition made on account of Vend....
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....services, has erred in law and on facts in directing the AO to disallow expenses having invoice dates earlier to April 1, 2009, without appreciating the accounting procedures / policies followed by the Appellant as per the mercantile system of accounting. 9.2 Without prejudice to the above ground, the CIT (A) has erred in law and on facts in not directing the AO to grant relief for the alleged expenses in the respective previous year to which invoice is dated, given that the genuineness of the expense was not doubted. 10. Other Grounds 10.1 The CIT(A) has erred in law and on facts in not adjudicating on short grant of TDS by the AO and merely referring to the rectification application, which is pending for disposal before the AO. 10.2 The CIT(A) has erred in law and on facts in stating that the interest is mandatory and consequential without appreciating that the AO has levied interest under section 234B and section 220(2) of the Act on the demand raised under section 143(1) of the Act for the same period. 10.3 The CIT(A) has erred in law and on facts by failing to appreciate that the manner of computation of interest under section 234B ....
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....0,72,850/- based on additional evidence without giving an opportunity to the AO based on additional evidence without giving an opportunity to the AO. 8. The CIT(A) erred in directing the AO to delete the addition made on account of defective spare parts of Rs. 5,47,92,966/- based on additional evidence without giving an opportunity to the AO. 9. The CIT(A) erred in directing the AO to verify the disallowance made on account of miscellaneous expenditure of Rs. 2,25,13,253 and restrict the disallowance only to those claims for which the invoices are dated prior to 1/4/2009. 10. The CIT(A) erred in directing the AO to delete the addition made on account of other provisions of Rs. 3,99,95,033/- on the ground that reversal of provision of sales tax has been reflected in the financial statement based on additional evidence without giving an opportunity to the AO. 11. The CIT(A) erred in directing the AO to delete the addition made on account of expenditure under the head 'cost of goods sold based on the additional evidence submitted before the CIT(A) based on additional evidence without giving an opportunity to the AO. 12. The CIT(A) has e....
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....0,30,72,850 10 Disallowance of defective spare inventory 5,47,92,966 11 Disallowance of miscellaneous expenditure 2,25,13,253 12 Disallowance of other provisions 3,99,95,033 13 Expenditure debited under the head cost of goods sold 84,98,42,348 14 Outside contract service 36,14,59,731 15 Date of approval and disallowed under section 37 28,31,39,077 16 Provision for warranty 144,54,92,317 17 Disallowance of access the appreciation 3,63,88,324 6. Assessee preferred appeal before the ld. CIT(A) who passed appellate order on 24/7/2015 partly allowing the appeal of the assessee as under:- Sl. No. Nature of addition/ disallowance Amount In Rs. Decision of CIT(A) 1 Suppression of income detected from 26AS statement 278,65,19,835 Deleted at Para 18.2 2 Suppression of sale of goods 138,88,98,234 Deleted as per para 3.9 3 Suppression of sales detected from reconciliation statement 30,97,85,727 Deleted as per para 4.3 4 Disallowance of discount and service income 1,210,72,35,796 Deleted as per para 5.5 5 Addition of income received in advance 203,11,57....
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....ow appropriate TDS credit which was restricted in AY 09-10 is to be allowed to the extent of income recognized in AY 10-11 when the issue has not become final and appeal is pending with ITAT for A.Y.09-10." 12. Facts related to the issue on in AY 2009-10 shows that it was found that assessee company is differing the income of the annual maintenance contracts on the ground that the revenue would be recognized over the period of contract time and are not at the time of raising of the invoice. Even though the revenue was deferred, the entire TDS credit has been claimed by the assessee in the year of raising of the invoices. Tus, assessee though receiving the total income involved in the contract receipt of maintenance in this year, though contract was pertaining for several years, offered the income received in this year only proportionate to the years of contract, but claimed TDS of the total amount deducted at the time of receipt of income. Accordingly, the notice was issued by the AO calling for the various details. The assessee did not furnish any information but requested for adjournment. And therefore, a summons u/s. 131 of the Act was also issued to the managing director in ....
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....vidence relevant for FY 2009-10. The ld. CIT(A) examined the same and found that issue is identical for AY 2009-10. The ld. CIT(A) held that the income recognition method has been correctly followed by the assessee. Accordingly, as per decision taken by him for earlier years that the claim of tax deduction at source by the assessee is restricted to the amount of income reflected from the maintenance business of the assessee, He held that revenue recognized from the opening balance as on 1/4/2009 the assessee is entitled for the appropriate tax credit. Tus, the ld CIT (A) directed the ld AO to grant credit of the TDS relevant to opening income received in advance balance which is offered for taxation during the year and also grant credit t only to the extent of income offered in this year by the assessee. 14. Aggrieved with the same, ld. AO is in appeal and stated that the addition deleted by the learned ld. CIT(A) and direction to grant credit based on the appellate order passed for AY 2009-10 is not proper as such appellate order is also pending before Tribunal. Therefore, the decision is premature as the issue has not become final. 15. The ld. AR vehemently submitted that s....
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....unts and other adjustments amounting to Rs. 1038,88,98,234/-. 4. The CIT(A) erred in directing the AO to delete the addition made on account of suppression of sales detected from reconciliation. 5. The CIT(A) erred in directing the AO to delete the addition made on account of discount on service income of Rs. 1210,72,35,796 based on additional evidence submitted before the CIT(A) without giving an opportunity to the AO. 18. Brief facts shows that assessee has disclosed the sales of Rs. 683,96,20,218/-. This was required to be reconciled along with the sales tax return. Assessee submitted that gross sales as per sales tax return was Rs. 77,023,098,793/- and as per service tax return was Rs. 8,161,729,987/-. Thus, the gross turnover of the assessee was Rs. 85,184,828,780/-. The difference was explained by the assessee by submitting a chart. It was stated that a sum of 165,86,78,346/- is cash discount which was not considered in sales tax returns, sum of Rs. 6,729,421,699/- is a post sales discount, and a sum of Rs. 1,085,284,444/- was booking in discount account. Thus, there is no difference in the sales shown in the income tax return and the sales tax return whi....
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.... the cash discount of Rs. 1,658,678,346/- holding that the assessee has furnished before him party wise details of discount duly indicating invoice numbers, gross value, discount amount, net sales value matching to the ledger balances debited to the profit and loss account along with the details of the bank payments and reference in which the cash discount was settled with the customers. He further verified the early payment discount policy of the company and copy of the customer ledger extracts of six major customers covering more than 95% of the discount amount. Thus, it was found that the similar evidence was collected for AY 2009-10 and that the cash discount is an intrinsic part of the appellant's business. Thus, the addition was deleted. 21. With respect to the post sales discount the ld. CIT(A) held that assessee has furnished the breakup of discount and the level of different programs detailing the layout which are mapped to its customers with document number, remittance details etc. Simple copies of the program letters were also produced which indicated the existence of posts sales discount as a regular feature in the assessee's business as incentive mechanism. Therefor....
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....he toners and cartridges for its own internal consumption, it purchases its supply from its customers to whom such products were sold earlier. The assessee provided the complete details with invoices for the owners and cartridges purchased along with 21 invoices. The ld. CIT(A) on examination of invoices found that the sample invoices submitted by the assessee are pertaining to FY 2008-09, but it has the stamp date of FY 2009-10. Therefore, he held that according to the accounting principles since the invoices are of FY 2008-09 it can be conclusively held that the expenditure in question had fully accrued in that year. There was no reason for its accrual in FY 2009-10. Accordingly, he held that this expenditure could have been claimed only in AY 2009-10 to the extent of Rs. 4,608,132/- since their corresponding revenue was accounted for in that period. According to him, the claim cannot be admitted in the impugned assessment year and therefore he directed the ld. AO to restrict the above disallowance to the extent of Rs. 4,608,132/-. 27. The ld. AO is aggrieved with the deletion of the balance addition and assessee is aggrieved as per ground number 3 with respect to upholding of....
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....pportunity to the AO. 32. In rejoinder, the ld. AR submitted that the AO has made the identical disallowance in respect of earlier years, and for this year also he has made the disallowance on similar details and therefore all these details were available before the AO, books of accounts and the other details were produced before the AO and therefore now it cannot be said that he was not given a proper opportunity of hearing before the ld CIT (A).. He submitted that assessee substantiate its claim which was made by producing similar details before the learned AO. Assessee has not submitted any additional evidence. Thus, the ld CIT (A) on appreciation of the same details have deleted the disallowance. The assessee has submitted and supported the grounds of appeal. 33. We have carefully considered the rival contention and perused the orders of the ld. lower authorities. It is apparent that the discount of Rs. 9,473,384,489/- is a difference between the income tax return and respective sales tax return filed by the assessee. The assessee has shown that there is a cash discount of Rs. 1,658,678,346/-, post sales discount of Rs. 6,729,421,699/- and bookings in discount account of ....
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....ect to the refund in return reserve of Rs. 71,067,815 which is in the form of bad debts, ld. CIT(A) noted that this write offs are normal business operation of the assessee which are written off on account of reason of long ageing of debt, difference in prices, disputes on claims and non-recoverability. It is continuing business operations with the customer, and it is in the nature of bad debts written off. The ld. CIT(A) examined the same and found that the impugned amount constitutes a regular business expenditure and is supported by the due process. The ld DR could not controvert the findings of the ld CIT (A). According to us also, based on the verification, the ld CIT (A) has correctly deleted the addition. Therefore, we do not find any infirmity in the order of the ld. CIT(A) who examined the complete details of the claim based on the evidence and no infirmity was pointed out by the ld. DR. Thus, the order of the ld CIT (A) is confirmed. 38. Assessee is in appeal as per ground no 3 of the appeal:- 3. Toners and Cartridge 3.1 The CIT(A), having accepted Appellant's explanation on claim of deduction in respect of toner and cartridge, has erred in law an....
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....penses for the assessment year under appeal. Having considered the material on record, we do not find any justification for the disallowance of the claim of the assessee on such abstract proposition. Merely because an expense relates to a transaction of an earlier year it does not become a liability payable in the earlier year unless it can be said that the liability was determined and crystallized in the year in question on the basis of maintaining accounts on the mercantile basis. In each case where the accounts are maintained on mercantile basis it has to be found in respect of any claim, whether such liability was crystallized and quantified during the previous year so as required to be adjusted in the books of account of that previous year. If any liability, though relating to the earlier year, depends upon making a demand and its acceptance by the assessee and such liability has been actually claimed and paid in the later previous years, it cannot be disallowed as deduction merely on the basis that the accounts are maintained on mercantile basis and that it related to a transaction of the previous year. The true profits and gains of a previous year are required to be computed....
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....making allowances of any expenditure 'laid out' or 'expended'. The words 'laid out' are with reference to the mercantile system while the word 'expended' is with regard to the cash system. Once there was the sales tax demand in this case, which was an enforceable liability and as such a real expenditure, for which the assessee laid out the amount by debiting his account in the accounting year which was also the year of demand of the department, deduction can be legitimately claimed under section 10(2) (xv). Here is a case, where there is no doubt about the genuineness of the expenditure. There is also the compulsiveness in the sales tax demand which can be ignored only at peril of the assessee. This expenditure had never been taken note of in the earlier years for one reason or the other. In the absence of any legal bar in the way of the assessee claiming this expenditure in the year of demand for which provision has already been made in his accounting year, deduction under section 10(2) (xv) is permissible in law and has been rightly allowed by the Tribunal. " (p. 238) We are in respectful agreement with the said view expressed by the Gauha....
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....NR in Civil Appeal No.3282 of 2008. 45. The brief fact shows that in the computation of income assessee has claimed a sum of Rs. 43,855,450 on account of lease payments. The assessee was asked to submit the claim with the copy of the lease agreement, The assessee furnished its reply. The ld. AO noted that identical issue arose in case of the assessee for AY 2009-10 wherein the lease rent paid for motor car under Finance lease agreement was held to be a capital expenditure. Accordingly for this year also the same was disallowed. 46. When the matter reached before the ld. CIT(A), he noted identical issue has been considered and allowed in favour of the assessee for AYs 2002-03 and 2003-04 by holding that in case of Finance lease transaction the lessor is the owner of the asset, is eligible for claiming depreciation. For this year, decision was rendered after considering the decision of the Hon'ble Supreme Court in which it was also found to be applicable for that appeal also. Accordingly, the ld. CIT(A) allowed the claim in favour of the legal expenditure. 47. The ld. AO aggrieved with the same is in appeal before us and the learned CIT DR reiterated the finding of the ld. A....
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....are provided for. The ld. AO found that the explanation of the assessee is unverifiable, and it is a reduction in the spares inventory and to the extent the profit of the company is reduced. It was further noted that in profit and loss account in schedule 14 the cost of goods sold, and services are disclosed. The spares including third-party products and services was disclosed in that schedule which has an opening stock of Rs. 2,089,450,628/-. The current purchases were 286,87,91,757/-. The closing stock was shown at Rs. 1,667,034,831/- on account of the above provision, sum of Rs. 403,072,815 was reduced from the inventory of the closing stock or account of obsolescence and provisioning, but the assessee did not furnish any evidence and therefore same was disallowed. 52. Assessee approached the ld. CIT(A), and same Ledger was produced which showed that there is an opening balance of Rs. 56,63,63,787, out of which the provision was reversed during the year of Rs. 163,290,936 which left the closing balance of Rs. 403,072,851. It was claimed by the assessee that the ld. AO has referred to the provision account as per trial balance and not the provision debited or credited to the p....
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....defective spare parts inventory the above amount is shown in the trial balance. Ld AO held that assessee did not provide information with evidence, hence in absence of any evidence, the learned assessing officer disallowed the same. 58. The assessee approached the ld. CIT(A), assessee explained that as per the Ledger account opening balance was Rs. 34,551,899 and provision made during the year was of Rs. 20,241,067 year being the closing balance of Rs. 54,792,966/-. The learned assessing officer instead of taking the provision made during the year of Rs. 20,241,067/- looked at the trial balance and made an addition of Rs. 54,792,966/-. It was submitted that refurbished value standard cost which approximates the actual cost has been used to value spare parts inventory by the assessee at the end of the year. It was admitted that this methodology was the company's internal policy applicable only for valuing spare parts inventory in India. The refurbished value standard was explained that it is a weighted average cost based on regional purchasing pattern wherein the service organization meets the customer demand by purchasing new parts as well as repairing the defective units. Since....
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....provision was also ascertained and found to be made on scientific and consistent basis, no such disallowance is made in the earlier years or in the subsequent years but for this year only, the liability of the expenditure is not contingent in nature, the ld. CIT (A) correctly allowed the claim of the assessee. Accordingly, we find no infirmity in the order of the learned CIT - A deleting this disallowance. Accordingly ground number 8 of the appeal is dismissed. 62. Ground number 9 is with respect to the miscellaneous expenditure disallowed by the learned assessing officer deleted by the learned CIT - A. Ld. AO has raised following ground :- 9. The CIT(A) erred in directing the AO to verify the disallowance made on account of miscellaneous expenditure of Rs. 2,25,13,253 and restrict the disallowance only to those claims for which the invoices are dated prior to 1/4/2009. 63. It was found during the course of the assessment proceeding that assessee has debited a sum of Rs. 62,360,929/- as miscellaneous expenditure, the assessee was asked to furnish the evidence. Assessee submitted the broader details of such expenditure stating that recruitment expenses is Rs. 8,730,21....
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....ted the learned assessing officer to verify the details and restrict the disallowance only to those claims for which the invoices dated prior to 1/4/2009. Therefore, we do not find any infirmity in the direction of the learned CIT - A for verification of the details and thereafter allow it. As stated earlier there is no evidence that assessee furnished any additional evidence, but the ld CIT (A) perused the same evidence which were before ethe ld AO, we do not agree that the ld AO is required to be given one more opportunity of verifying the details once again. The ld DR could not point out any error in the process of verification adopted by the ld CIT (A). Thus, ground number 9 of the appeal is dismissed. 69. Ground number 10 of the appeal is with respect to disallowance of the other provisions amounting to Rs. 39,995,033/- which was debited as other provisions in the profit and loss account. Ground is :- 10. The CIT(A) erred in directing the AO to delete the addition made on account of other provisions of Rs. 3,99,95,033/- on the ground that reversal of provision of sales tax has been reflected in the financial statement based on additional evidence without giving an ....
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....crapped of Rs. 743,250,205/-, vendor's rebate of Rs. 58,147,794/-, obsolescence materials Rs. 61,045,442/- and customs brokers Rs. 24,26,86,608/-. The Ld. assessing officer was of the view that these expenses are debited under the head cost of goods sold and these expenses are tracked for the provision of the tax deduction at source which the assessee company is required to furnish evidence of all the expenditure as well as the evidence of deduction of tax. The assessee was given an adequate time to furnish the above details however despite this the assessee did not make any submission but furnished the return of tax deduction at source. This made the learned AO to examine the evidence on his own in the statement. Thus, the assessing officer made the disallowance of Rs. 849,842,348/- out of the above expenditure. The learned assessing officer was also of the view that the assessee has merely provided the Ledger extracts of some of the expenditure and therefore for want of evidence also the disallowance was made. 76. The assessee aggrieved with the same preferred an appeal before the learned CIT - A wherein the assessee submitted the evidence in soft copy with respect to product ....
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....ect to the claim of the assessee in ground number 6, she supported the order of the learned CIT - A stating that when there is no evidence available that expenses are not pertaining to this year, the disallowance has rightly been confirmed. 83. The learned authorized representative with respect to the addition deleted by the learned CIT - A confirmed that there is no disallowance of identical nature made in the past or future years. On similar disallowances made in case of the assessee for assessment year 2009 - 10 has already been deleted. He referred to the various paragraphs of the appellate order and submitted that there is no infirmity in the disallowance deleted. 84. Coming to ground number 6 of the appeal of the assessee he vehemently submitted that product spare parts scrapped represents the year end accrual entries and should have been allowed as a deduction. With respect to the vendor debate it is submitted that the copy of the Ledger was submitted before the ld. AO and the first appellate authority which represents reversal of the portion of the income pertaining to the Microsoft vendor rebate accounted by the taxpayer in the previous year. The disallowance of the ....
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.... directed to verify and if found in the order, the disallowance may be deleted. 89. With respect to the vendor rebate of Rs. 58,147,794/- the claim of the assessee is that the above sum is rebate received in the company transaction in respect of the marketing activities carried out in India by the assessee for Microsoft products. The sum of Rs. 282,511,842 was offered for taxation in financial year 2008 - 09. Out of the above amount, there is a reversal of accrual for vendor rebates in this year which has resulted due to negotiation in the matter of marketing of the products. It is in fact the reversal of income. The learned CIT - A confirmed the disallowance on the basis of absence of evidence. However, he failed to appreciate that it is a reversal of income which have been already offered for taxation in the earlier year, therefore the addition confirmed by the learned CIT - A is not correct, we direct the learned AO to delete the disallowance. 90. With respect to the obsolescence material, we find that the learned CIT - A has given a concrete finding that it is based on continuing policy and technical basis for which the provision is made, and it is not contingent. Any pro....
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....ho after r examining the details found that assessee has produced Ledger along with the details of tax deduction at source and copies of the invoices and purchase order for 169 transactions. Wherever he found that the invoices are pertaining to the earlier year, he confirmed the disallowance. Therefore, both the parties are aggrieved. 97. The learned CIT DR vehemently supported the order of the learned assessing officer whereas the learned authorized representative submitted that that identical disallowance issue was there in the case of the assessee for assessment year 2009 - 10 which has been deleted by the learned CIT - A. Further no such disallowances is made by the learned assessing officer in case of the assessee either in the past or in subsequent years. It was further stated that the learned CIT - A has categorically examined 169 transactions which is supported by the invoices, purchase orders, Ledger extracts and tax deduction at source thereon. Therefore, the learned CIT - A has allowed the claim of the assessee after proper examination which could not be found fault with. With respect to the disallowance confirmed by the learned CIT - A, he relied upon the decision of....
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....ction 37 of the act and further the taxes required to be deducted thereon. Such expenses were quantified at Rs. 552,789,460 and same were disallowed. However, as the disallowance out of the various expenditure such as warranty and other expenditure which were involved in the cost of goods sold the sum of Rs. 312,548,753 was excluded and the net disallowance of Rs. 283,139,077/- was made. 102. The assessee aggrieved with the same preferred an appeal before the learned CIT - A. The learned CIT appeal examined the evidence in the form of simple invoices for each of the above heads in the table indicated the reasons for misclassification in the first place requiring subsequent reclassification reversal. He further verified the invoices for the all the expenses involved in the about disallowance and found that there is an accrual of liability in financial year 2009 - 10 and therefore he allowed the claim of the assessee holding that same is neither contingent but incurred during the year stop the claim of the assessee was allowed. 103. The learned assessing officer is aggrieved with the same. The learned CIT DR vehemently supported that order of the learned assessing officer who h....
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....ssee has debited a sum of Rs. 3,377,412,268/- as warranty support and maintenance services. The assessee was asked to furnish the details which was submitted in the form of Ledger account of warranty support and maintenance services. The learned assessing officer analyzed the data however he doubted the various adjustment entries posted therein. The assessee explained that 'outside contract expenditure' represents an expenditure pertaining to warranty incurred by the assessee during the financial year. On the aspect of the various journal vouchers it was submitted that these are adjustment entries. The learned assessing officer discussed the decision of the honourable Supreme Court in 314 ITR 62 in case of Rotork controls India private limited and quoted extensively the notes on accounts. He noted that opening balance for the warranty was 233,58,87,564/-, the provision made for the warranty expenses is Rs. 2,656,285,705, utilization is Rs. 2,911,341,819 leaving the closing balance of Rs. 2,080,831,450/- and therefore the assessee company should have furnished evidence for utilization for warranty of Rs. 291.13 crores. He further issued show cause notice asking the assessee to provi....
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....e claim was made in a genuine manner with tax deduction at source wherever applicable. With respect to the journal voucher amounting to Rs. 312,548,753/-, he examined the Ledger account and the breakup given by the assessee which is reproduced at page number 51 of his appellate order, correlating the same with the sample invoices and 139 cases explaining the reasons and basis for reclassification. He held that the claim of the assessee is backed by evidence and clearly sustainable therefore he directed the learned assessing officer to delete disallowance. With respect to the ad hoc disallowance made by the learned assessing officer, he held that he has examined the party wise details of the expenses along with the tax deduction at source and he was completely in agreement with the assessee that recording of the expenses under the incorrect head will not diminish the genuineness of the same. He further held that the provision is made based on historical trend and evidence laid down in the decision of the honourable Supreme Court is the base for allowing the claim of warranty. He further held that for assessment year 2009 - 10 the identical issue was decided and therefore he deleted ....
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....ort and maintenance services expenses showing that what category of the expenditure are incurred and shown under that head. 114. We have carefully considered the rival contention and perused the orders of the learned lower authorities. The fact shows that the assessee has debited a sum of rupees. In 37,74,12,268/- to the profit and loss account under the head warranty support and maintenance services. During the course of the assessment proceedings the learned assessing officer asked the assessee to furnish the details and on examination of such details or absence of such details the learned assessing officer made the disallowance of various portion of the warranty expenditure. He disallowed a sum of Rs. 649,963,577 be warranty expenses related to the outside contract services for want of further details and evidence. He further disallowed a sum of Rs. 312,548,753/- for want of further details and evidence pertaining to the journal entries. Therefore, out of the balance amount of Rs. 2,414,899,938/- he disallowed a sum of 20% being Rs. 482,979,987/- based on the observation of the AO that the various unrelated expenses were being recorded under the head of warranty expenses. It ....
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....istorical cost as well as on standard scientific basis, he should not have disallowed 20% of the total expenditure. Further identical for assessment year 2009 - 10 wherein the identical allowance was claimed, the learned AO disallowed the same however on appeal, the disallowance was deleted with a direction and after verification the order giving effect was passed on 10 March 2025 deleting the total addition. It was not the claim of the revenue that the facts for this year are not identical to the facts pertaining to assessment year 2009 - 10. Further the learned assessing officer has relied upon the decision of the honourable Supreme Court for making the disallowance the learned CIT - A held that the allowance claimed by the assessee of warranty expenses is supported by the decision of the honourable Supreme Court. We find that no evidence are produced before us to show that the expenses claimed by the assessee of warranty expenses are not supported by any scientific basis, most of the expenses incurred are based on the outside contract business as assessee has stated that for warranty services outside contract is awarded the contract for repairs et cetera. According to this we do....
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....assessee on depreciation on motor car relying upon the notification issued by the central government and supported by the decision of the coordinate bench holding that motor cars are also eligible for depreciation at the rate of 50% instead of 15%, was allowed by the learned CIT - A. No contrary decision was shown to us. As the learned CIT - A has followed the decision of the coordinate bench, respectfully following the decision of the coordinate bench, we confirm the order of the learned CIT - A - ground number 15 of the appeal. 121. Ground number 16 of the appeal is :- 16.The CIT(A) has erred in directing the AO to partly allow the addition made on account of suppression of income detected from 26AS statement of Rs. 278,65,19,835/-." 122. It is with respect to the subscription of income detected from 26AS statement. During the course of assessment proceedings, the assessee company was asked to reconcile the tax deduction at source certificate on one to one basis. On examination of 26AS treatment the tax deducted was under section 194C and 194I of the act which show that the appointed value taxable which vendors. On examination of the tax statement, it was found tha....
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....ction at source claim of the assessee is required to be restricted to the extent of income offered by the assessee. He submitted that the learned and CIT - A has misunderstood the addition. 125. The learned authorized representative submitted that the learned CIT - A addition based on the direction provided for restriction of tax source credit in respect of income received in advance given that the said amount is subsumed in the same. Further the direction of the learned CIT - A based on his own direction for assessment year 2009 - 10 against which the revenue has not preferred the appeal. He submitted that there is no unaccounted income found by the learned assessing officer, but he has merely made the addition on account of difference. 126. We have carefully considered the rival contention and the orders of the learned lower authorities. The simple issue involved in this ground of appeal that there is a difference in the income shown in the tax statement of tax deducted at source and income shown by the assessee the audited statement and income tax return. The learned assessing officer found that there is an excess of income shown in the tax deduction at source statement wh....