TaxTMI 
TaxTMI 
2024 (10) TMI 1775
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....sp;ITBA/APL/M/250/2020-21/1031510911 (1) dt. 16.03.2021 3 months 2.0 In all the above appeals for AYs 2013-14 to 2016-17, the Revenue has contested the orders of the Ld. CIT (A) according relief to the assessee qua assessment orders passed u/s 143(3) by the Ld. AO. It is seen that some of the appeals for the AYs 2013-14, 2014-15, 2015-16 and 2016-17 are having common grounds and it is an admitted position that if the facts as well as issues of the case are identical in all the appeals than adjudication in anyone appeal shall apply to all the other appeals also, on mutatis mutandis basis. 3.0 It is seen from records that there are delays of short periods as indicated in Column-G of the chart herein above. The Ld. DR requested that the short delays had occurred on account of preoccupation in some other works and time consumed in preparation of appeal papers and the same was not intentional. As regards delay for AY-2016-17 the Ld. DR cited reference to the Hon'ble Apex Court order in WP (Civil) No. 3/ 2020 dated 08.03.2021 mandating extension of timelines on account of Covid19. The Ld. Counsel for the assessee did not contest Revenue's pleadings on this account. Having h....
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....the Ld. First Appellate Authority and also submitted that the DRP Chennai for AY 2010-11 had held that provisions for warranty are allowable business expenditure. Additionally, the Ld. Counsel for the assessee invited our attention to the decision of Coordinate Bench of this tribunal in ITA No. 953 / Chny / 2015 in assesse's own case holding that the provision for royalty are an allowable business expenditure. The Ld. DR would like to make us believe in the merits of the addition made by the Ld. AO and submitted and that the decision of the CIT (A) is unwarranted. 7.0 We have heard rival submissions in the light of material available on records. We subscribe to the view that warranty is an integral part of a sale transaction. It primarily entails a quality assurance from a seller to the prospective buyer with a promise that in the event of any repair or after sales intervention the promised warranty obligations would step in. As regards creation of provisions for warranty the same are created because of inherent difficulty in objectively and precisely estimating as to how much warranty commitments would be invoked by buyers. Here comes the role of adopting a scientific and ....
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....ed and discounted on accrual basis, can be an item of deduction U/s. 37 of the Act. Since the assessee estimated the warranty and made a provision on a scientific basis the assessee is eligible to claim as revenue expenditure. Furthermore, the assessee reverses any excess provision made in the earlier year(s) and hence, it is clear from this that there is no excess claim by the assessee with regard to warranty. Hence we find no infirmity in the claim of assessee and the same has rightly been allowed by DRP. We uphold the same. 20. Similar issue for provision for warranty is raised by assessee in its appeal in ITA No. 807/CHNY/2016 for assessment year 2011-12 and the facts are exactly identical in this year also what was in assessment year 2010-11 in ITA No. 953/CHNY/2015, taking a consistent view, we allow the provision for warranty in this year also. This issue of assessee's appeal is allowed...." 8.0 We have noted that the facts of the present case are identical to those in the above referred decision and no distinction has been made by the revenue. Therefore, in respectful compliance to the decision of Coordinate Bench of this Tribunal Supra, we hereby ....
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.... the addition on the premise that Ld. AO could not establish rendering of services in India as well as rejecting hypothesis of application of section-9(1) to the assesse's case. Consequently the Ld.CIT (A) applying the ratio of this tribunal in ITA 2169, ITA 6148 as well as decision of DRP in assesse's own case for AY-2010- 11 deleted the addition. During the course of present proceeding, the Ld. AR invited our attention to the decision of the Coordinate Bench of this Tribunal in ITA No. 953 / Chny / 2015 in assesse's own case for AY 2010-11 whereby the issue has been restored back to the file of Ld. AO for re-adjudication of the matter after proper verification of facts of the case. The Ld. DR held the view that the addition made by the Ld. AO is based upon correct understanding of law. 11.0 We have heard rival submissions in the light of material available on records. The decision of the coordinate bench of this tribunal in assesse's own case for AY-2010-11 vide ITA No. 953 / Chny / 2015 has been found to be having a direct bearing on the impugned controversy and hence is being considered. In the said case Hon'ble coordinate bench has observed as under:- "......
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....To the extent the order of lower authorities is set aside. Accordingly, the ground of appeal of revenue is allowed for statistical purposes. 13.0 As regards ITA No. IT(TP)-8 / Chny/2021 for AY-2014-15, ITA No. IT(TP)-9 / Chny/2021 for AY-2015-16, ITA No. IT(TP)-326 / Chny/2021 for AY-2016-17 it is seen that identical grounds of appeal have been raised by the revenue. No changes, save variations in figures, in facts of the case have been reported. Accordingly the decision in AY 2013-14 Supra shall apply mutatis mutandis. In the result ground of appeal of revenue for these assessment years are also allowed for statistical purposes. 14.0 The next issue that has been raised by the revenue for AY-2014- 15, 2015-16 and 2016-17 is in respect of action of the Ld. CIT (A) in deleting the disallowance made by the Ld. AO in respect of bad debts. The facts of all the three years have been reported to be identical, except for the fact that the government agencies are different, and hence for the purpose of this adjudication we take AY-2014-15 as the lead year. Conveying brief facts of the case, the Ld. Counsel for the assessee informed that during AY-2014-15 the assessee ha....
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.... claiming as bad debts by passing appropriate entries in financial statements would suffice for allowance of claim. It has also been held that there is no need to establish recoverability of an amount for its allowance u/s 36(1)(vii). We also find that the Ld. CIT (A) has comprehensively analyzed the issue before adjudicating in favour of the assessee. Therefore, we feel that there is no case for any interference in his order at this stage. Accordingly, the order of the Ld. First Appellate Authority for AY-2014-15 is sustained and the ground of appeal raised by the revenue challenging the issue of bad debts is dismissed. 17.0 As regards ITA No. IT(TP)-9 / Chny/2021 for AY-2015-16, ITA No. IT(TP)-326 / Chny/2021 for AY-2016-17 it is seen that identical grounds of appeal have been raised by the revenue. No changes, save variations in figures and names of government agencies, in facts of the case have been reported. Accordingly the decision in AY-2014-15 Supra shall apply mutatis mutandis. In the result ground of appeal of revenue for these assessment years are also dismissed. 18.0 The next issue that has been raised by the revenue for AY-2013- 14 is in respect of acti....
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....sion of Hon'ble High Court of Madras in the case of Redington (India) Ltd. vs. Addl. CIT [2022] 242 ITR 450 (Mad.). 9. On the other hand, the Ld. counsel for the assessee only requested that in view of the decision of Hon'ble Bombay High Court in the case of Everest Kanto Cylinder Ltd. 52 taxmann.com 395 (Bom.), wherein it is held that the corporate guarantee upward adjustment in ALP can be done by taking 0.5%, but it is held to be international transaction. The Ld. counsel for the assessee only requested that the upward adjustment of ALP can be done at 0.5%. 10. After hearing both the parties and going through the facts and circumstances of the case, we concur with the TPO's order that this is an international transaction, but upward adjustment is now covered in favour of the assessee partly by the decision of Hon'ble Bombay High Court in the case of Everest Kanto Cylinder Ltd, supra, wherein it is directed that the adjustment should be made @0.5%. Hence, we direct the A.O accordingly. 11. Coming to ITA No. 807/CHNY/2016 for the assessment year 2011- 12 of assessee's appeal, the issue is regarding corporate guarantee cha....
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.... by the Ld. AO in his order is itself a sufficient documents in this regard and is in the nature of assesse's own admission of its defaults. The income of Rs. 1 Cr. was himself offered by the assessee. There is nothing on record to suggest that this disclosure of additional income was contested by the assessee through any letter to the department. Once an assessee has admitted additional income by confessing its guilt of non-maintenance of proper records, details, bills, vouchers there cannot be any justified case for any retraction. To this effect the justification of Ld. First Appellate Authority in holding that the Ld. AO was required to bring on record specific inconsistency / defect is totally uncalled for. Accordingly, we are of the view that the decision of Ld. CIT (A) is not based upon proper understanding of the facts of the case. We therefore set aside the order of the Ld.CIT (A) and confirm the addition by the Ld. AO amounting to Rs. 1 Cr. Accordingly, the ground of appeal raised by the revenue is allowed. 23.0 The next issue that has been raised by the revenue for AY-2016- 17 is in respect of action of the Ld. CIT (A) in deleting the disallowance made by th....