LINDE INDIA LIMITED (FORMERLY BOC INDIA LIMITED),KOLKATA vs. D.C.I.T., CIRCLE - 11(1), KOLKATA

ITA 1931/KOL/2024Status: DisposedITAT Kolkata25 September 2026AY 2022-20238 pages
AI SummaryPartly Allowed

What were the facts?

The assessee, M/s Linde India Limited (formerly BOC India Limited), filed appeals against orders of the CIT(A) for Assessment Year 2022-23. The first appeal (ITA No. 1931/KOL/2024) challenged the confirmation of disallowance of Rs. 4,83,00,000/- for provision of warranties and a disallowance of Rs. 1,47,000/- related to income from house property. It also challenged the adjustment of Rs. 6,41,17,73,662/- for deviation in closing stock valuation. The second appeal (ITA No. 654/KOL/2025) challenged the CIT(A)'s order upholding an addition of Rs. 6,41,17,73,662/- made in an intimation under section 143(1) for deviation in closing stock valuation, and the dismissal of the appeal as infructuous. The AO had disallowed warranty provisions as notional, and the CIT(A) confirmed this. The AO also made an addition for a difference in income from house property and business income, which the CIT(A) confirmed. The CPC made an adjustment for GST on closing stock valuation in the 143(1) intimation.

What did the Tribunal hold?

On the issue of warranty provisions, the Tribunal held that since the assessee created provisions against which payments were made, these are provisions for expenses incurred in the normal course of business. The Tribunal directed the AO to allow actual payments made against warranty provisions while computing income, setting aside the CIT(A)'s order. This issue was allowed for statistical purposes. Regarding the difference in income from house property and business, the Tribunal restored the issue to the AO to verify if the income was offered in earlier years. If so, the disallowance is to be deleted. This issue was also allowed for statistical purposes. Concerning the adjustment of Rs. 6,41,17,73,662/- in the section 143(1) intimation, the Tribunal quashed the intimation. It held that the AO, CPC failed to follow the mandatory first proviso to Section 143(1)(a) by not issuing a prior intimation before making the adjustment, rendering the intimation invalid and bad in law, following precedents. This ground was allowed. The appeal in ITA No. 654/Kol/2025 was allowed, and the appeal in ITA No. 1931/Kol/2024 was allowed for statistical purposes.

What were the issues?

1. Whether the disallowance of Rs. 4,83,00,000/- in respect of provision for warranties, made on the ground that it is a notional liability, is justified under Section 37(1) of the Income-tax Act, 1961 (the Act)? - Assessee's contention: Not explicitly recorded, but the Tribunal's direction implies it should be allowed based on actual payments. - Revenue's contention: Not explicitly recorded. 2. Whether the disallowance of Rs. 1,47,000/- on account of a difference in income offered under the head 'income from house property' and 'profit and gain from business' is justified, especially if the difference was offered in earlier assessment years? - Assessee's contention: The addition resulted in double addition as the difference was already offered in earlier assessment years. - Revenue's contention: Not explicitly recorded. 3. Whether the adjustment of Rs. 6,41,17,73,662/- on account of deviation in the method of valuation of closing stock, specifically the GST component, made by the AO, CPC in the intimation under section 143(1) of the Act is valid, considering the lack of prior intimation as required by the proviso to Section 143(1)(a)? - Assessee's contention: The adjustment was made without prior intimation and without considering the corresponding reduction, leading to no change in returned income. The intimation under section 143(1) is invalid. - Revenue's contention: Not explicitly recorded.

Which sections of the Income-tax Act were involved?

Section 37(1),Section 143(3),Section 143(1),Section 115JB,Section 142(1),Section 143(1)(a),Section 145A,Section 234B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH, KOLKATA

Before: SHRI RAJESH KUMARAND SHRI PRADIP KUMAR CHOUBEY

For Appellant: Shri Ketan Ved, AR
For Respondent: Shri Sanjit Kumar Das. CIT-DR
Hearing: 19.08.2026Pronounced: 25.09.2026

PER RAJESH KUMAR, ACCOUNTANT MEMBER:

These appeals preferred by the assessee are against the orders of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (hereinafter referred to as the “ld. CIT(A)”], dated 18.07.2024 and 10.01.2025 for the same Assessment Year (AY) 2022-23 passed u/s 143(3) of the Act and 143(1) of the Act respectively.

2.

The only issue raised by the assessee in Ground No.1 is against the confirmation of disallowance by ld. CIT(A) of Rs.4,83,00,000/- in respect of provision of warranties u/s 37(1) of the Income-tax Act, 1961 (In short, ‘the Act’).

ITA Nos.1931 &

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 37(1)

All 6,940 judgments and leading authorities on Section 37(1) →

Recent GST High Court judgments

Search GST case law →