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2013 (8) TMI 409 - AT - Income TaxAllowance of carry forward of loss on account of provisions of section 79 of the Income Tax Act – Held that:- Issue of carry forward would depend upon the finality of order for earlier years as it would have bearing on the year under appeal – Issue is remitted to the file of AO to determine the carry forward losses based on the outcome to the decision for the earlier years. Allowability of warranty expenses - Assessee debited expenses on account of warranty expenses - H'ble Apex Court in the case of Rotork Controls [2009 (5) TMI 16 - SUPREME COURT OF INDIA] has laid down the conditions which are required to be satisfied for making claim in respect of post sale customer service and has laid down the principle pertaining to the same - The Hon'ble Apex Court in Rotork Controls case noted that provision made for warranty based on past experience (historical trend) was most appropriate as it fulfilled accrual concept as well as matching concept. A detailed assessment of the warranty provisioning policy is required particularly if the experiences suggests that warranty provisions are generally reversed if they remained unutilized at the end of the period prescribed in the warranty – Held that:- There is no finding with respect to the compliance of aforesaid guidelines of Apex Court by assessee in the order of AO or DRP - Matter needs to be examined in the light of the principles laid down by Hon'ble Apex Court – Matter remitted to the file of AO for deciding the issue afresh in the light of the decision of Hon'ble Apex Court in the case of Rotork Controls case. Acceptability of DRP Order for making assessment - DRP has not dealt with the objections raised by the assessee by giving any cogent reasons as to why these objections are not acceptable to them - DRP has simply approved the adjustments made by the TPO. This has resulted in DRP's order being non-speaking – Held that:- Ld. DR has tried very hard to meet these objections by referring to various relevant income tax rules and the case laws but this effort of Ld. DR is not arising out of the order of the DRP. Therefore assessment orders passed by assessing officer in consequence to the DRP's order have to be set aside relying upon the decision in the case of Vodafone Essar Ltd vs. Dispute Resolution Panel reported in [2011 (12) TMI 22 - Delhi High Court], wherein it has been held that when quasi-judicial forum like DRP deals with section 144C of the Act then it is obligatory on its part to ascribe cogent and germane reasons as reasons are the heart and soul of the matter and facilitate the appreciation of the order when the matter is called in question either before a superior or appellate forum - Accordingly the DRP's order along with the impugned order is set aside in respect of transfer pricing adjustments to the file of DRP with the direction to pass a speaking order after taking into consideration the submissions of both the parties.
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