Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (2) TMI 1331 - AT - Income TaxTP Adjustment - assessee bench marked its international transactions on the TNM method - A.R. submitted that the TPO has considered the services rendered by the assessee as “Information Technology Enabled Services” (ITES) and accordingly selected comparables which are providing BPO/KPO services - HELD THAT:- TPO had recharacterized the activities of the assessee in AY 2008-09 and 2009-10 also and since the same was disputed by the assessee before the Tribunal, the ITAT has restored the issue of transfer pricing adjustment to the file of the TPO by the coordinate bench - Thus we restore this issue to the file of the AO/TPO with similar directions. Disallowance of provision for warranty - A.R. submitted that the assessee has been providing for warranty liability on accrual basis on the basis of percentage of sales at the end of each year - contention of the assessee is that it is following a scientific method for determining the amount to be provided for warranty liability - HELD THAT:- We notice that the AO has rejected the claim without finding fault with the method adopted by the assessee to determine the quantum of provision. This is not justified. When the assessee is following a scientific method consistently which also approximately corresponds with the actual expenditure incurred subsequently, then there is no reason to disallow the provision for warranty as held by Hon’ble Supreme Court in the case of Rotork Controls India Pvt. Ltd. [2009 (5) TMI 16 - SUPREME COURT] Accordingly, in AY 2011-12, the Tribunal has restored this issue to the file of the AO for examining it afresh. Accordingly, following the decision rendered by the coordinate bench in the assessee’s own case for assessment year 2011-12, we restore this issue to the file of the AO for examining it afresh. Disallowance of software expense - disallowance u/s 40(a)(i) - AR prayed that both the issues, viz., software expenses disallowed as capital in nature and disallowed u/s 40(a)(i) of the Act require re-examination by considering the above said decisions - HELD THAT:- We find merit in the submissions of Ld. A.R. Accordingly, we restore both the issues relating to software expenses to the file of the A.O. for examining them afresh in the light of above said decisions and also any other decision, information or explanations that may be furnished by the assessee before him.
|