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2022 (4) TMI 1506 - AT - Income TaxTP Adjustment - difference in ALP of its international transactions with its AEs relating to availment of supervision services, SAP services and Central services - HELD THAT:- Keeping in view the rule of consistency and more so the position that the facts for the assessment year 2017-18 remain the same as that of assessment year 2014-15 [2021 (11) TMI 967 - ITAT DELHI] in respect of the impugned transactions with its AE, we respectfully following the order of the Hon’ble Tribunal (supra) direct the Ld. AO to delete the addition - Ground pertaining to the adjustment to the total income of the assessee on account of difference in ALP of its international transactions with its AEs relating to availment of supervision services, SAP services and Central services are thus allowed. Provision for warranty - HELD THAT:- The assessee has been consistently making the claim of deduction for provision of warranty every year following the same methodology which in our view is tenable. The provision for warranty has been made @3% of the contract value and the unutilized portion has been reversed at a regular intervals from year to year. We also note that this issue has been under litigation every year beginning from the assessment year 2008-09. The coordinate bench of the Tribunal in assessee’s own case (supra) has in all the prior years decided this issue in favour of the assessee by allowing the deduction of provision for warranty. It is also the case of the assessee that in the case of Rotork Controls India (P) Ltd. [2009 (5) TMI 16 - SUPREME COURT] allowed the provision for warranty as a permissible deduction on the basis of certain parameters fulfilled by the assessee in that case. Since the parameters/ conditions laid down by the Hon’ble Supreme Court in Rotork Controls case (supra) are fulfilled by the assessee the ratio of the said case squarely applies to the case of the assessee. Thus we note that the Rotork Controls case (supra) has been duly considered by the Tribunal wherein the Tribunal has categorically recorded its finding that Rotork Controls case is squarely applicable to the case of the assessee. There is no merit in the argument of the Ld. DR that the assessee has not applied any scientific/ reasonable methodology for claiming deduction of provision for warranty in view of the explanation offered by the assessee. We allow the deduction of provision for warranty.
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