M/S.VA TECH WABAG LTD.,CHENNAI vs. ACIT, CC-3(2), CHENNAI

ITA 2247/CHNY/2024Status: DisposedITAT Chennai24 February 2025AY 2018-19Bench: SHRI MANU KUMAR GIRI (Judicial Member), SHRI JAGADISH (Accountant Member)1 pages
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What did the Tribunal hold?

The Tribunal, following its own previous decisions in similar cases, held that warranty is an integral part of a sale transaction and provisions for warranty are allowable business expenditure. The Tribunal also directed the AO to re-examine the issue of foreign TDS credit in light of the DTAA.

What were the facts?

The assessee claimed provision for warranty expenses. The Assessing Officer disallowed the claim, stating it was not based on a scientific basis or past trends. The CIT(A) confirmed the disallowance.

What were the issues?

Whether provision for warranty expenses is allowable as a deduction. Whether foreign tax credit should be allowed in the year of withholding or year of offering income to tax.

Which sections of the Income-tax Act were involved?

Section 139

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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: HON’BLE SHRI MANU KUMAR GIRI & HON’BLE SHRI JAGADISH

For Appellant: Shri R. Vijayaraghavan, Advocate
Hearing: 13.02.2025Pronounced: 24.02.2025

MANU KUMAR GIRI (Judicial Member)

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