What did the Tribunal hold?

The Tribunal held that the CIT(A) was justified in deleting the disallowance as the facts and methodology for provision for warranty were identical to a previous assessment year where the Tribunal had ruled in favour of the assessee.

The assessee company, engaged in telecommunication products, declared an income of Rs. 5,24,53,320/- for AY 2012-13. The AO disallowed Rs. 46,80,630/- as excess provision for warranty.

What were the issues?

Whether the disallowance of provision for warranty made by the AO was justified, considering the assessee's own case for a prior assessment year.

ACIT vs M/S Abb India Pvt. Ltd. | ITAT Bangalore 2016

Income Tax Appellate Tribunal, “C” BENCH : BANGALORE

Before: SHRI A. K. GARODIA & SHRI GEORGE GEORGE K

For Appellant: Shri. Ganesh S, Advocate

For Respondent: Shri. Sanjay Kumar, CIT-III, Shri. Ganesh S, Advocate

Hearing: 28.11.2016Pronounced: 06.12.2016

This appeal at the instance of revenue is directed against CIT(A)’s order dated 28.12.2015. The relevant AY is 2012-13.

The grounds raised read as follows:

Briefly, the facts of the case are as follows:

The assessee is a company engaged in the business of trading, servicing and maintenance of telecommunication products. For the assessment year 2012-13, the return of income was filed on 29.09.2012, declaring an income of Rs.5,24,53,320/-. The assessment under section 143(3) was completed vide order dated 28.11.2014. In the assessment completed under section 143(3), the AO had disallowed an amount of Rs.46,80,630/- as excess provision for warranty.

Aggrieved by disallowance of Rs.46,80,630/-, the assessee preferred an appeal to the first appellate authority. The CIT(A), following the tribunal’s order for the assessment year 2008-09 in assessee’s own case, decided the issue in favour of assessee.

Aggrieved, the revenue has filed the present appeal before the tribunal. At the very outset, the learned counsel for the assessee submitted that the issue in question is squarely covered by the order of the tribunal in assessee’s own case for assessment year 2008-09 (in order dated 19.10.2012). The learned counsel for the assessee further submitted that the methodology adopted for claiming of provision for warranty in the current assessment year is identical to the methodology adopted for assessment year 2008-09. The learned DR fairly agreed the issue in question is covered by the earlier order of the tribunal in assessee’s own case (supra).

We heard the rival submission and perused the material on record. We find identical issues having similar facts, have been already adjudicated by the coordinate bench of the tribunal in assessee’s own case for the assessment year 2008-09 (supra). The relevant finding of the tribunal in assessee’s own case reads as follows:

Since the facts in the current assessment year viz., 2012-13 is identical to assessment year 2008-09, respectively following the order of the coordinate bench of the tribunal as in assessee’s own case for the assessment year 2008-09, we hold that CIT(A) has justified in deleting the disallowance made by the AO as regards the provision for warranty.

In the result, the appeal filed by the revenue is dismissed.

Order pronounced in the open court on this 6th day of December, 2016.

ASST.C.I.T., BANGALORE vs. M/S ABB INDIA PVT. LTD., BANGALORE

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