COMMISSIONER OF INCOME TAX-I vs. BOSE CORPORATION INDIA PVT LTD

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ITA - 304 / 2013HC Delhi12 July 20131 pages
For Petitioner: SANJEEV RAJPAL
AI SummaryDismissed

What did the High Court hold?

The Delhi High Court held that the provision for warranty is a deductible expense, citing previous judgments. Regarding AMC charges, the court noted the assessee's consistent practice and the relatively small amount involved. No substantial question of law was found to be involved.

What were the facts?

The Revenue appealed against an ITAT judgment concerning the assessment year 2006-07. The appeal raised two issues: the deductibility of provision for warranty and the treatment of AMC charges received by the assessee.

What were the issues?

The primary issues were whether provision for warranty is a contingent liability and how to treat bifurcated AMC charges when the service period extends beyond the financial year.

Which sections of the Income-tax Act were involved?

Not specified

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

IN THE HIGH COURT OF DELHI AT NEW DELHI . ITA 304/2013 and CM 10305/2013 (delay) . COMMISSIONER OF INCOME TAX-I ..... Appellant . Through Advocate (appearance not given) . . . versus . . . BOSE CORPORATION INDIA PVT LTD ..... Respondent . Through Advocate (appearance not given) . . . CORAM: . HON'BLE MR. JUSTICE SANJIV KHANNA . HON'BLE MR. JUSTICE SANJEEV SACHDEVA . O R D E R . 12.07.2013 . . . This appeal filed by the Revenue which pertains to the Assessment Year 2006-07 raises two questions. The first questions relates to provision for warranty which as per the Revenue is a contingent liability. The issue is covered by several decisions of the Delhi High Court against the Revenue namely CIT vs. Hewlett Packard India (P) Ltd. (2008) 171 Taxman 13 (Del); CIT Vs. Sony India (P) Ltd. (2007) 160 Taxman 397 (Del) and CIT Vs. M/s. Vinitec Corporation Pvt. Ltd. (2005) 196 CTR 369 (Delhi). . We fail to understand why the Revenue has raised this issue without referring to the said judgments. We also note that the quantum of provisions for warranty @0.5% of the annual sales is not disputed or challenged on the ground that it is not based on past data and is irrational. . The second issue raised by the Revenue pertains to AMC charges which were received by the Assessee but have been bifurcated or divided in case the AMC period extended and went beyond the financial year in question. The respondent/assessee has been consistently following the said practice and the amount involved is Rs.7,45,000/-. . . In view of the aforesaid position, we are not inclined to issue notice in the present appeal as no substantial question of law is involved. The appeal is dismissed in limine. . . . . SANJIV KHANNA, J . . . . . SANJEEV SACHDEVA, J . JULY 12, 2013 . st . . . $ 18 .

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