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2016 (5) TMI 114 - KARNATAKA HIGH COURT

2016 (5) TMI 114 - KARNATAKA HIGH COURT - [2016] 382 ITR 37 - Remand orders - provision made for warranty - Held that:- It is an admitted fact that on the appeal filed by the revenue challenging the order passed by the Tribunal giving relief to the assessee as regards the provision made for warranty, this Court placing reliance on the Judgment of the Apex Court in Rotork Controlsí case (2009 (5) TMI 16 - SUPREME COURT OF INDIA ) remanded the matter to the Tribunal for disposal in accordance with .....

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fficer that too, after giving a positive finding that the methodology adopted by the assessee is on a scientific and reasonable basis.

We observe that no proper reasoning has been given by the Tribunal for exercising the power of remand. The directions issued by this Court while remanding the matter to the Tribunal is not considered by the Tribunal in the true spirit. It was the obligation cast on the Tribunal to examine the case of the Assessee in the light of the Judgment of the Ape .....

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d by the Income Tax Appellate Tribunal, "A" Bench, Bangalore dated 13.2.2015 in ITA Nos. 362 & 363/BANG/2007 relating to the assessment years 2002-03 and 2003-04. 2. Brief facts of the case are that the assessee/company which is engaged in the marketing and distribution of software systems and storage devices, computer consultancy and solutions, had filed its return of income for the relevant assessment years. During the assessment proceedings under Section 143(3) of the income tax .....

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448/2008 c/w ITA 449 and 1039/2008. This Court by order dated 26.09.2012 remanded the matter back to the Tribunal. The Judgment of this Court reads thus: "The Supreme court in the case of Rotork Controls India P. Ltd. Vs Commissioner of Income-Tax reported [2009] 314 ITR 62 (SC) has held in para-10 that the provision for warranty could be made is permissible if the requirements stated in para-10 are fulfilled. In that view of the matter, the appeals are allowed and the common order dated 16 .....

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e past history or actual expenditure incurred by the assessee on account of such warranty. 4. Being aggrieved by the said order passed by the Tribunal the assessee is before this Court raising the following substantial questions of law: "1. Whether on facts and circumstances of the case, the Appellate Tribunal is correct in remanding the matter to the Assessing Officer for verifying whether the Appellant s provision for warranty is based on the past history or actual expenditure incurred by .....

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matter now to the assessing officer is beyond the scope of the remand ordered by the Hon ble High Court. 4. Whether on the facts and circumstances of the case, the Appellate Tribunal was correct in remanding the matter involving a legal issue to the Assessing Officer. 5. Whether the Appellate Tribunal has erred in remanding the matter to the Assessing Officer though all the evidences to demonstrate the principles were available on record. 6. Whether the Appellate Tribunal is justified in remandi .....

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n the case of Rotork Controls India (P). Ltd., vs. Commissioner of Incometax, Chennai reported in ((2009) 180 TAXMAN 422 (SC) has remanded the matter to the Tribunal for disposal in accordance with law. The Tribunal after examining the case of the assessee in the light of the Judgment of the Apex Court in Rotark Controls case (supra) has positively held that the methodology adopted by the assessee for estimating the warranty are based on the actual expenditure incurred by the assessee on such pr .....

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d its discretion in verifying any figures regarding the provision, being the last fact finding authority. The order passed by the Tribunal goes beyond the scope of remand made by this Court which is untenable and calls for interference by this Court. 7. Per contra, learned counsel appearing for the revenue Sri Aravind would justify the order passed by the Tribunal. It is contended that the order of remand made by the Tribunal is not an open remand and it is only for the limited purpose to verify .....

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nswer the questions of law in favour of the revenue and against the assessee. 8. We have given our anxious consideration to the submissions made by the parties. It is an admitted fact that on the appeal filed by the revenue challenging the order passed by the Tribunal giving relief to the assessee as regards the provision made for warranty, this Court placing reliance on the Judgment of the Apex Court in Rotork Controls case (supra) remanded the matter to the 8 Tribunal for disposal in accordanc .....

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