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2018 (8) TMI 1943 - AT - Income TaxAddition on account of upward adjustment of international transaction in respect of royalty payment - HELD THAT:- In respect of payment of royalty by the assess to the associate concerns the TPO has applied the rate of royalty payment 3% in respect of computation of royalty rate as against rate of 3.75% adopted by the assessee. We find that an identical issue in the case of the assessee itself was decided by the Co-ordinate Bench of [2014 (8) TMI 1159 - ITAT AHMEDABAD] against the revenue pertaining to assessment year 2005-06 and 2006-07. Addition on account of provision for slow moving/absolute stock - HELD THAT:- As directed the AO to allow the claim of the assessee subject to the assessee furnishing the complete particulars in this regard, if necessary, with adequate proof. Respectfully following the decision of the coordinate bench we direct the AO to allow the claim of the assessee subject to the furnishing of the information by the assessee as directed in the above cited decision of the coordinate bench. Therefore the appeal of the revenue is allowed for statistical purposes. Disallowance on account of provision for warranties - HELD THAT:- We have noticed that the Co-ordinate Bench of the ITAT [2018 (4) TMI 1122 - ITAT AHMEDABAD] for assessment year 2000-01 to 2001-02 has decided the identical issue in favour of the assessee. Deduction on which TDS deducted on which provision reversed - HELD THAT:- The amount was disallowed in assessment year 2005-06 on account of non-deduction of tax but the same was deducted during the year under consideration and claimed as deduction u/s.40(a)(ia) of the act. The second amount represents the amount credited on account of reversal of expenditure debited in the account of earlier year, the same was considered as part of profit & loss in this year. After perusal of the detailed finding of ld. CIT(A) holding that the A.O. ought to have allowed deduction for the aforesaid amount u/s. 40(a)(ia)and further amount of ₹ 52,40,669/- which was credited to the Profit & Loss Account for provision reversed but was not allowed deduction in the past after we do not find any infirmity in his decision. Accordingly the appeal of the revenue is dismissed. Claim for deduction of the provision of bad debt written back and provision for advances written back while computing the book profit u/s. 115JB - HELD THAT:- After keeping in view the retrospective amendment made in the Finance Act, w.e.f. assessment year 2000-01, we consider that as elaborated in the findings of the Ld.CIT(A) the assessee has failed to demonstrate that it has made any such adjustment in the book profit in the past, therefore, we do not find any error in the decision of ld. CIT(A) directing the assessee to approach the A.O. if such amounts are added back in calculation of book profit u/s. 115JA/JB in respective years.. Accordingly, the appeal of the assessee is dismissed on this issue. Addition being provisions for slow moving/absolute stock - HELD THAT:- It is undisputed facts that the assessee company has identified all those items whose value have reduced and created a provision for the same instead of adjusting the same against the value of inventory. It is clear from the above facts that the assessee company has created the aforesaid provision instead of reducing the amount of inventory shown in the assets of the company in the balance sheet. These facts demonstrate that it is not the actual reduction as the same has not been reduced from the actual value of the inventory reflecting in the asset of the assessee company. In this connection we have also perused the decision of the Hon’ble High Court of Karnatka referred by the assessee in the case of CIT V. Yokogawa India Ltd. [2011 (8) TMI 766 - KARNATAKA HIGH COURT] it was held in this case that if the debt or doubtful debt is reduced from the loans and advances or the debtors from the assets side of the balance sheet the Explanation to section 115JA or JB is not at all attracted.
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