TMI Blog2017 (9) TMI 431X X X X Extracts X X X X X X X X Extracts X X X X ..... have deducted the cash discount, then same is to be allowed. - Appeal of revenue is allowed for statistical purposes. - ITA No. 4276/Del/2014 And CO. No. 54/Del/2015 - - - Dated:- 6-9-2017 - SHRI G. D. AGRAWAL, PRESIDENT AND SHRI AMIT SHUKLA, JUDICIAL MEMBER For The Revenue : Shri Aatiq Ahmed, Sr. DR For The Assessee : Ms. Priyanka Mogia, CA ORDER PER AMIT SHUKLA, JUDICIAL MEMBER: The aforesaid appeal and cross objection has been filed by the revenue as well as by the assessee against impugned order dated 28.05.2014, passed by the Ld. CIT(Appeals) XI, New Delhi for the quantum of assessment passed u/s 143(3) for the A.Y. 2009-10. 2. In the grounds of appeal the revenue has raised following grounds:- 1. On the facts and in the circumstances of the case the Ld. CIT(A) has erred in deleting the addition of ₹ 1,34,21,722/- made by the AO on account of warranty expenses. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and facts in deleting the additions of ₹ 94,62,769/- made by the AO on account of expenses towards cash discount. 3. The appellant craves to amend modify, alter, ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In support of its contention, the assessee referred to accounting standards in this regard and also relied upon the judgment of Hon'ble Supreme Court in the case of M/s. Rotork Controls India Pvt. Ltd. vs. CIT (2009) 180 Taxmann 22. 6. The Learned CIT(Appeals), allowed the assessee s claim holding that the provision for warranty expense has been regularly made and the warranty expense estimate has been reassess by the assessee at the end of the year. He observed that the Assessing Officer has himself accepted that the provision for warranty expenses has been reduced to 0.50% during the year as compared to 0.75% in the earlier year. He further noted that the excess provision for warranty made in the prior year s amounting to ₹ 1,44,49,381/- has been reversed in this year considering that no claim was made during the warranty tenure of the products for the earlier years and no adjustment for such reversal was made in the computation of income in A.Y. 2012-13. This itself shows that the provision of warranty expenses have been made on the basis of scientific estimation keeping in mind the anticipated liabilities likely to arise in the future. Accordingly, he allowed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such sophisticated goods would be entitled to deduction from the gross receipts under section 37. It would all depend on the data systematically maintained by the assessee. Thus, the judgment of Hon'ble Supreme Court clearly recognizes that if the provision made for warranty has been made on some proper estimate, then it has to be allowed as deduction as business expense from the gross receipt u/s 37. The Learned CIT (Appeals) has observed that the provision for warranty expenses has been made on scientific estimation keeping in mind the anticipated claim which is likely to arise in future. However, the Learned CIT(Appeals) has not elaborated as what was the criteria for such estimation and how the assessee has evaluating the warranty expenses based on past experience. All the details of warranty expenses debited and reversed back needs to be examined so as to see, whether the estimation for the provision made by the assessee is correct or not and whether there is any excess provision made by the assessee in any of the year. We find that in the earlier year this issue has been set aside to the file of the Assessing Officer to consider the details and evidences to allow the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ash discounts of its purchases on weekly basis in which the particulars of invoice along with the date, amount of cash discount due which was given to the AO. He noted that these details clearly reflect that cash discount is claimed on the invoices were within the 30 days. Accordingly, he allowed the assessee s claim as per the discussion appearing at para 9.2 of the appellate order. 11. The Ld. DR strongly relied upon the order of the Assessing Officer; whereas the Ld. Counsel for the assessee relied upon the order of the Ld. CIT (Appeals) but fairly pointed out that the Tribunal in the earlier year has set aside this issue to the file of the Assessing Officer. 12. After considering the rival submissions and on perusal of the finding given in the impugned orders, it is seen that, there is no dispute that the cash discount has been given by the assessee to its customers which pays the dues before 30 days which is calculated at State Bank of India s PLR rate. In support of its claim certain details regarding main customer MUL had also been given. However as noted by the Assessing Officer these details does not reflect the amount billed, date of bill, description of goods suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d circumstances of the case, Ld. Assessing Officer has erred, both on the facts and in law, in holding that electrical installation are of the nature of electrical fittings and thus disallowed depreciation amounting to ₹ 55,54,354. 4. On the facts and circumstances of the case, Ld. Assessing Officer erred in filing the appeal before Hon'ble ITAT and assessee prays that suitable costs should be awarded to the assessee. 5. All of the above grounds of appeal are without prejudice and notwithstanding each other. 6. The Respondent craves leave to add, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal. 7. Any consequential relief, to which the respondent may be entitled under the law in pursuance of the aforesaid grounds of cross objection, or otherwise, thus may be granted. 14. So far as the ground no. 3 is concerned the same has not been pressed, therefore, it is dismissed as not pressed. As regards the other grounds it has been admitted by the Ld. Counsel that these grounds will be infructuous, because they are mainly in support of order of the Learned CIT (Appeals). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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