TMI Blog2020 (3) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... g the judicial precedence, we decline to interfere in the order of CIT(A) on this issue and accordingly revised grounds 2 to 5 raised by the Revenue are rejected. Disallowance made by the AO in respect of large increase in Tailoring and maintenance expenses - HELD THAT:- Assessee has explained about increase under the business promotion head because several new special schemes of customers / dealers were conducted and this increase in expenditure is ₹ 529.32 lakhs. The AO has made part disallowance to the extent of dip in gross-profits rate by 3.9%. This finding is also given by CIT(A) that the AO has not disputed the fact that the payments were actually made / incurred in the normal course of business of the assessee. Hence, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . BEENA PILLAI, JUDICIAL MEMBER Revenue by: Shri. K. N. Dhandapani, Addl. CIT (DR)(ITAT), Bengaluru Assessee by: Shri. C. Ramesh, CA ORDER Per A.K. Garodia, Accountant Member This appeal is filed by the Revenue and the same is directed against the order of learned CIT(A)-4, Bengaluru, dated 25.01.2017 for the Assessment Year 2014-15. 2. Ground No.1 is general. As per revised grounds 2 to 5, the grievance of the Revenue is regarding part deletion of the disallowance made by the AO under section 14A r.w.r. 8D(ii). In this regard, learned DR of the Revenue supported the Assessment Order. He submitted that this issue was decided by learned CIT(A) as per para 5.4 of his order and the disallowance was deleted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned CIT(A) has upheld the disallowance under section 14A to the extent of ₹ 14,000/- being amount of exempt income earned by the assessee during the present year. In this regard, he drawn our attention to page 8 of the order of CIT(A). 4. We have considered the rival submissions and we find force in the submissions of learned AR of the assessee because learned CIT(A) has already upheld the disallowance to the extent of exempt income earned by the assessee in the present year i.e., ₹ 14,000/- and as per the Tribunal order cited by learned AR of the assessee having rendered in the case of Sivan Securities (supra) and also the judgment of Hon ble Delhi High Court rendered in the case of CIT v. Joint Investment Pvt. Ltd. (sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee has vehemently argued against any justification for this action of the AO. The expenditure statements as per assessee's accounts have been submitted. It is further explained by the appellant that, major increase under the Business promotion head' was owing to the conduct of, several new special-schemes of customers / dealers, because of which the expenditure has jumped to the extent of ₹ 529.32 lakhs. It is submitted that, this expenditure was increased in respect of approximately one thousand dealers spread across India, by way of conducting such marketing events, to argument the business turnover. It is apparent from the AO's order that, there is no specific finding of fact recorded against the genuine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmal course of business of the assessee. Hence, on this issue, we find no infirmity in the order of CIT(A) and therefore, we decline to interfere. Accordingly, grounds 6 and 7 of Revenue s appeal are also rejected. 7. As per grounds 8 and 9 of the revised grounds of appeal, the grievance of the Revenue is regarding deletion of the disallowance made by the AO out of provision of warranty expenditure. Learned DR of the Revenue submitted that the disallowance made by the AO has been deleted by CIT(A) without any valid basis and therefore, on this issue also, the order of CIT(A) should be reversed and that of the AO should be restored. As against this, the learned AR of the assessee supported the order of CIT(A). At this juncture, the Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the succeeding year. Therefore, it is apparent that there is no scientific basis of making the provision and it appears to be a tool to reduce the profit of the current year by making this artificial provision to be reversed in the succeeding year. In the light of these facts, now we examine the applicability of the judgment of Hon ble Apex Court rendered in the case of Rotork Controls India (P) Ltd Vs. CIT as reported in 314 ITR 62 (SC). In para 18 of this judgment, it is held by Hon ble Apex Court that a liability is a present obligation arising from past events. Similarly, in para 13 of the same judgment, it is observed by Hon ble Apex Court that a past event that leads to a present obligation is called an obligating event and the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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