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2022 (3) TMI 1285 - AT - Income TaxDisallowance of warranty expenses which was made on the basis of past experience and on a scientific basis - HELD THAT: -The Tribunal in the orders for assessment years 1996-1997 to 2007-2008 after considering the method of providing for warranty liability by way of provision, held that provision made was based on past history and was on scientific method of estimating the liabilities on account of warranty claim. In view of the co-ordinate Bench order of the Tribunal in assessee’s own case, which is identical to the facts of the instant case, we direct the A.O. to allow the provision for warranty as an allowable deduction. Therefore, ground 2 is allowed. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Disallowance u/s 14A r.w.s. 8D(2)(ii) as gone through the financial find that the assessee has total investment as on 31.03.2008 at ₹ 70.45 crore. The assessee’s interest free fund, namely, share capital and reserves and surplus is far exceeding the above investment. Therefore, going by the dictum laid down by the Hon’ble jurisdictional High Court in the case of CIT v. Micro Labs Limited [2016 (4) TMI 219 - KARNATAKA HIGH COURT], no disallowance of interest u/s 14A r.w.r. 8D(2)(ii) is called for and we delete the same. Disallowance u/s 14A r.w.r. 8D(2)(iii) - AR took us to the various types of expenses incurred by the assessee and submitted that most of the expenses are not related to the earning of exempt income. It was submitted that the issue may be restored to the files of the A.O. to re-determine the disallowance by excluding the value of investment which did not yield exempt income while computing average value of investments, as per order of ACIT v. Vireet Investment Pvt. Ltd. [2017 (6) TMI 1124 - ITAT DELHI] - DR did not have objection to the above submission of the learned AR. Therefore, we set aside the order passed by the CIT(A), as regards the disallowance u/s 14A r.w.rule 8D(2)(iii) of the I.T.Rules and restore the matter to the files of the A.O. Deduction u/s 10A - deduct telecommunication expenses incurred in foreign currency from total turnover and from export turnover - HELD THAT:- Hon’ble Apex Court in the case of HCL Technologies Ltd.[2018 (5) TMI 357 - SUPREME COURT] has held that when expenditure is reduced from export turnover, the same should be reduced also from the total turnover while computing deduction u/s 10A - we hold that the CIT(A) is justified in directing the A.O. to reduce expenditure reduced from export turnover also from total turnover, while computing deduction u/s 10A of the I.T.Act. It is ordered accordingly. Commission payment disallowed u/s 40(a)(ia) as cash discount - HELD THAT:- The limited submission of the learned Standing Counsel is to remit the issue to A.O. According to the learned Standing Counsel, the CIT(A) has admitted additional evidence without giving the A.O. an opportunity to examine the same. We find that no additional evidence was produced by the assessee before the CIT(A). The details of the cash discount and foreign commission were already on record before the A.O. The cash discount and foreign commission in total was ₹ 4.30 crore and break-up of the same was provided (the break-up of cash discount of ₹ 3,24,37,251 and foreign commission of ₹ 1,05,56,342). Providing the break-up of figure which already on record, does not amount to production of additional evidence. Moreover, no useful purpose would be served at this point of time to remand the matter (since we are concerned with A.Y. 2008-2009) to A.O., to examine the break-up of figure which is already available before him at the time of assessment Customs duty included in the closing stock u/s 43B - HELD THAT:- As relying on ASEA BROWN BOVERI LIMITED. [2007 (4) TMI 284 - ITAT BOMBAY-E] AO is directed to allow the deduction u/s 43B with respect to payments made towards entire custom duty paid in respect of goods lying in closing stock. This ground, therefore, succeeds.
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