Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (6) TMI 1126 - AT - Income TaxDisallowance made in respect of provision for warranty - Held that:- The issue is squarely covered in favour of the assessee by the decision of the Tribunal in assessee’s own case, no provision can be recognized. Liability is defined as a present obligation arising from past events, the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits. A past event that leads to a present obligation is called as an obligating event. The obligating event is an event that creates an obligation which results in an outflow of resources. It is only those obligations arising from past events existing independently of the future conduct of the business of the enterprise that is recognized as provision. For a liability to qualify for recognition there must be not only present obligation but also the probability of an outflow of resources to settle that obligation. Where there are a number of obligations (e.g. product warranties or similar contracts) the probability that an outflow will be required in settlement, is determined by considering the said obligations as a whole. Addition made being 5% of the dealer concession and incentives - Held that:- When the assessee claimed expenditure, it should be established that the expenditure was incurred for wholly and exclusively for the purpose of business. The assessee has to produce necessary bill and vouchers. In the present case, the assessee has failed to furnish details. The Assessing Officer having no option, disallowed 5% of the expenditure towards dealer concession and incentive. In our opinion, it is appropriate to specify the expenditure, which is not supported by bills and vouchers. Accordingly, we remit this issue back to the file of the AO with a direction to specify the disallowance in respect of expenditure, which is not supported by proper evidence. With this observation, this ground is allowed for statistical purposes. Addition on account of transfer pricing adjustment as per the order of the TPO - Held that:- CIT(Appeals) remitted the issue back to the file of the AO with direction to give an opportunity the assessee to submit its explanation and decide the issue on merits towards upward adjustment of the value relating to transfer pricing. We do not find any infirmity in the finding of the CIT(A), since, the AO has not given adequate opportunity to the assessee to explain the revised estimate by the TPO.
|