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2019 (10) TMI 841 - AT - Income TaxAllowability of “Education Cess” - HELD THAT:- As in CHAMBAL FERTILISERS AND CHEMICALS LTD., PR. COMMISSIONER OF INCOME TAX, KOTA. [2018 (10) TMI 589 - RAJASTHAN HIGH COURT] observed therein that in the CBDT circular where word “Cess” is deleted and therefore, the Tribunal has committed an error in not accepting the contention of the assessee. Apart from the Supreme Court decision referred that assessment year is independent and word Cess has been rightly interpreted by the Supreme Court that the Cess is not tax - we allow these additional grounds raised before us in respect of the allowability of deduction regarding “Education Cess” paid by the assessee. Disallowance of provision for warranty - HELD THAT:- The assessee’s own case for assessment year 2011-12 the Tribunal has given catetorical findings stating that the policy adopted by the company was not found erroneous by the authorities in any forum and therefore, it is wrong to infer that the assessee does not have a policy and the contractual obligation to make the payment in principle and the quantification is also not found erroneous and unscientific by the authorities. It was also observed by the Tribunal that unutilized provision is carried forward to the subsequent years by maintaining the opening and closing balances. Without bringing any evidence on record, the allegation of the Assessing Officer and the CIT(A) that the warranty expenses are not claimable was held to be incorrect. The assessee has maintained this method in principle over the years and they are not disturbed conclusively and hence, these provisions were allowed as claimed by the assessee Administrative Service Charges allowability- HELD THAT:- Admittedly, the issue arising before us is identical to the issue before the Tribunal in Tata Johnson Controls Automotive Ltd. Vs. DCIT [2016 (4) TMI 963 - ITAT PUNE] and following the same parity of reasoning, we hold that the said expenditure is to be allowed in entirety in the hands of assessee being paid in accordance with the terms of the Agreement agreed upon between the parties and for the purpose of carrying on the business of assessee more efficiently. It may be pointed out herein that the assessee had initially entered into an Agreement with TACO in 1997 and the said expenditure had been allowed in the hands of assessee from year to year. However, the assessee renewed the Agreement in 2006 and the expenditure for the first time was not allowed in the hands of assessee in assessment year 2006-07. We find no merit in the orders of authorities below in this regard and accordingly, we modify the order of CIT(A) and direct the Assessing Officer to allow the expenditure in entirety in the hands of assessee
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