(a) ITO Vs. Wanson India Ltd., 5 ITD 102; (b) Thermax Babcock & Wilcox Ltd. v. DCIT

ACIT 3(1)(2), Mumbai vs. Gran Electronics P.Ltd, Mumbai

Bench: Shri Joginder Singh & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No.3518/Mum/2017 (नििाारण वर्ा / Assessment Year : 2011-12) बिाम/ Acit 3(1)(2) M/S. Gran Electronics R.No 607, 6Th Floor, Pvt. Ltd., Aayakar Bhavan, C-171, Mittal Court, V. Mumbai-400020 Nariman Point, Mumbai-400021 स्थायी ऱेखा सं./ Pan: Aaach0383A (अपीऱाथी /Appellant) .. (प्रत्यथी / Respondent) Revenue By: Shri. Chaudhary Arun Kumar Singh Assessee By : Shri. Mayank Chauhan & Shri. Bhupendra Karkhanis सुनवाई की तारीख /Date Of Hearing : 10.10.2018 घोषणा की तारीख /Date Of Pronouncement :22.10.2018 आदेश / O R D E R Per Ramit Kochar: This Appeal, Filed By Revenue, Being Ita No. 3518/Mum/2017, Is Directed Against Appellate Order Dated 27.01.2017 Passed By Learned Commissioner Of Income Tax (Appeals)-8, Mumbai (Hereinafter Called “The Cit(A)”), For Assessment Year 2011-12, The Appellate Proceedings Had Arisen Before Learned Cit(A) From Assessment Order Dated 10.03.2014 Passed By Learned Assessing Officer (Hereinafter Called “The Ao”) U/S 143(3) Of The Income-Tax Act, 1961 (Hereinafter Called “The Act”) For Ay 2011-12. I.T.A. No.3518/Mum/2017

…that the liability under warranty claims arises no sooner the sales are affected, which has definitely arisen in the accounting year and is allowable on estimate on the basis of past record. 1. IBM India Ltd v. CIT(A) 105 ITD 1 (Bang.) 2. Voltas Ltd. v. DCIT 64 ITD 232 (Mum) 3. Majestic Auto Ltd. 296 ITR 309 P&H 4. Usha Martin Inds Ltd. 288 ITR 63, AT., Cal. S.B. 5. Bharat Earth Movers, 245 ITR 428 S, C. which held that liability had actually arisen and deduction is allowable even if quantified and paid later. 6. Rotork Controls (I) Ltd. 314 ITR 62 S.C. - allowed as integral part of sale price. Thus, warranty pr…

Asst CIT 16(3), Mumbai vs. Allied Gems Corporation (Bombay), Mumbai

The appeal of the Revenue is partly allowed, as above

Bench: Shri G.S.Pannu & Shri Ramlal Negithe Acit, 16(3), 2Nd Floor,Matru Mandir, Tardeo Road, Mumbai 400 007 ...... Appellant Vs. M/S. Allied Gems Corporation (Bombay), 2505, Panchratna, Opera House, Mumbai -400 004 Pan: Aaefa 7201P .... Respondent Appellant By : Shri A.Ramachandran Respondent By : Shri Jignesh A.Shah Date Of Hearing : 22/09/2016 Date Of Pronouncement : 20 /01/2017

…as it had not received any tangible benefit in the form of 'Concession of duty in the year when the entitlements were accounted for in the books, thereby vindicating the Principle of Prudence. 2.4.13 The Mumbai Tribunal in the case Voltas Limited vs. DCIT, 64 ITD 232 ruled that whilst working out profits, all expected losses had to be accounted for in order to determine the real income of the company. It therefore allowed a claim made of deduction for warranty provisions. It held that since the income for which the projected expenditure had to be incurred was taxed as income, the expenditure to earn the income…