CIT v. Rotork Controls India Ltd.

293 ITR 311High Court2007#3467 most cited

What is CIT v. Rotork Controls India Ltd. authority for?

A provision for warranties is not deductible if the liability has not crystallized and is uncertain, as it does not represent a present obligation arising from past events.

34

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2015 to 2024.

Also referred to as

CIT v. Rotork Controls India Ltd. · section 37 · provision for warranties · contingent liability · deductible expense · uncertain liability · accrual basis · Madras High Court

Issues it is cited on

section 10asection 40(a)(i)section 40(a)section 40(a)(ia)disallowance u/s 14asection 43brevenue expendituresection 14asection 10section 40section 14india

Judgments citing CIT v. Rotork Controls India Ltd.

F.L.Smidth Minerals P Ltd., Chennai vs. DCIT, Chennai

In the result, the assessee’s appeals for ay 2005-06 and for ay 2007-08

ITA 1698/CHNY/2015[2007-2008]Status: DisposedITAT Chennai03 Aug 2017AY 2007-2008

Bench: Shri N.R.S. Ganesan & Shri S. Jayaramanआयकर अपील सं./I.T.A. No. 1697 & 1698/Mds/2015 "नधा"रण वष"/Assessment Year : 2005-06 & 2007-08 M/S. Flsmidth Minerals P Ltd., Deputy Commissioner Of Income Tax, (Since Merged With Flsmidth Pvt. Ltd.) Vs. Company Circle –Ii(1), Flsmidth House, V Floor, New Block, 34, Egatoor, Kelambakkam, 121, Nungambakkam High Road, Old Mahabalipuram Road, Chennai – 34. Chennai – 600 103. [Pan: Aaacf 1122D]

For Appellant: ShriG. Baskar, Advocate
Section 10(34)Section 14ASection 14A(1)Section 40

…, the AO held that the assessee could not substantiate this claim with any concrete submissions except to state that the provision of warranty is an ascertained liability. Relying the decision of Madras High Court in the case of Rotork Controls India Ltd – 293 ITR 311, he held that considering the nature of the liability, which is yet to crystallise but loaded with uncertainty of the event to cause a liability, there is no justification to accept the plea of the assessee to allow the provisions for warranty which is actually a contingent liability. Further, in the assessment made for assessment year 2007-08,…

F.L.Smidth Minerals P Ltd., Chennai vs. DCIT, Chennai

In the result, the assessee’s appeals for ay 2005-06 and for ay 2007-08

ITA 1697/CHNY/2015[2005-2006]Status: DisposedITAT Chennai03 Aug 2017AY 2005-2006

Bench: Shri N.R.S. Ganesan & Shri S. Jayaramanआयकर अपील सं./I.T.A. No. 1697 & 1698/Mds/2015 "नधा"रण वष"/Assessment Year : 2005-06 & 2007-08 M/S. Flsmidth Minerals P Ltd., Deputy Commissioner Of Income Tax, (Since Merged With Flsmidth Pvt. Ltd.) Vs. Company Circle –Ii(1), Flsmidth House, V Floor, New Block, 34, Egatoor, Kelambakkam, 121, Nungambakkam High Road, Old Mahabalipuram Road, Chennai – 34. Chennai – 600 103. [Pan: Aaacf 1122D]

For Appellant: ShriG. Baskar, Advocate
Section 10(34)Section 14ASection 14A(1)Section 40

…, the AO held that the assessee could not substantiate this claim with any concrete submissions except to state that the provision of warranty is an ascertained liability. Relying the decision of Madras High Court in the case of Rotork Controls India Ltd – 293 ITR 311, he held that considering the nature of the liability, which is yet to crystallise but loaded with uncertainty of the event to cause a liability, there is no justification to accept the plea of the assessee to allow the provisions for warranty which is actually a contingent liability. Further, in the assessment made for assessment year 2007-08,…

ACIT, Chennai vs. Faively Transport India Ltd., Hosur

In the result, the revenue’s appeal is treated as allowed for statistical

ITA 1924/CHNY/2015[2001-02]Status: DisposedITAT Chennai26 Jul 2017AY 2001-02

Bench: Shri N.R.S. Ganesan & Shri S. Jayaraman

For Appellant: Shri N. Gopikrishna, JCITFor Respondent: Shri Vikram Vijayaraghavan, Advocate

…2001-02, the AO observed that the provisions for warranty created were not based on any scientific reasons and it is only an unascertained liability. Relying on the decisions of the Jurisdictional High Court in the case of CIT vs Rotark Controls India Ltd., 293 ITR 311 (Mad), the AO disallowed this claim. Aggrieved, the assessee filed an appeal. Relying on the Supreme Court decision in Rotark Controls India Ltd, vs CIT, 314 ITR 62 (SC), the CIT(A) allowed the appeal. Aggrieved, the revenue filed this appeal pleading that the Apex Court held that only provisions for warranty arrived on a scientific basis is al…

F Harley & Co. Pvt. Ltd., Kolkata vs. The CIT, 1, Kolkata

In the result, the appeal of the assessee is allowed

ITA 864/KOL/2016[2011-2012]Status: DisposedITAT Kolkata08 Mar 2017AY 2011-2012

Bench: Shri M. Balaganesh, Am & Shri S. S. Viswanethra Ravi, Jm]

For Appellant: Shri Miraj D. Shah, ARFor Respondent: Shri Avinash Mishra, CIT
Section 143(2)Section 143(3)Section 14ASection 263Section 36(1)(va)

…the following decisions :- (i) Hon’ble Madras High Court in the case of CIT vs Cholamandalam Investment & Finance Co. Ltd reported in (2009) 309 ITR 110 (Mad) ; (ii) Hon’ble Madras High Court in the case of CIT vs Rotork Controls India Ltd reported in (2007) 293 ITR 311 (Mad) ; (iii) Hon’ble Delhi High Court in the case of Consolidated Photo & Finvest Ltd vs CIT reported in (2006) 281 ITR 394 (Del) ; (iv) Hon’ble Delhi High Court in the case of CIT vs Whirlpool of India Ltd reported in (2011) 242 CTR 245 (Del) ; 4.2. Accordingly the assessee replied that there is no error in the claim of expenditure towards ‘pr…

Ashok Leyland Ltd., Chennai vs. DCIT, Chennai

In the result, the appeal of the Revenue in ITA

ITA 2834/CHNY/2014[1995-96]Status: DisposedITAT Chennai23 Sept 2016AY 1995-96

Bench: Shri Chandra Poojari & Shri G. Pavan Kumarआयकर अपील सं./I.T.A. Nos.2825, 2826 & 2827/Mds/2014 "नधा"रण वष" /Assessment Years : 2005-06, 2006-07 & 2007-2008. The Deputy Commissioner Of M/S. Ashok Leyland Ltd, Income Tax, Vs. No.1, Sardar Patel Road, Large Taxpayer Unit -Ii, Guindy, Chennai 600 101. Chennai 600 032. [Pan Aaaca 4651L] (Department) (Assessee )

For Appellant: Shri. Vikram Vijayaraghavan, AdvocateFor Respondent: Shri. Arun C. Bharath, IRS, CIT
Section 35D(2)Section 35D(2)(c)

…आयकर अपील"य अ"धकरण, ’डी’ "यायपीठ, चे"नई IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI "ी चं" पूजार",लेखा सद"य एवं "ीजी. पवन कुमार,"या"यकसद"यकेसम" BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER आयकर अपील सं./I.T.A. Nos.2825, 2826 & 2827/Mds/2014 "नधा"रण वष" /Assessment years : 2005-06, 2006-07 & 2007-2008. The Deputy Commissioner of M/s. Ashok Leyland Ltd, Income Tax, Vs. No.1, Sardar Patel Road, Large Taxpayer Unit -II, Guindy, Chennai 600 101. Chennai 600 032. [PAN AAACA 4651L] (Department) (Assessee ) आयकर अपील सं./I.T.A. Nos.2834, 2835, 2836, 2837, 2838 & 2…

DCIT, Chennai vs. Ashok Leyland Ltd., Chennai

In the result, the appeal of the Revenue in ITA

ITA 2827/CHNY/2014[2007-08]Status: DisposedITAT Chennai23 Sept 2016AY 2007-08

Bench: Shri Chandra Poojari & Shri G. Pavan Kumarआयकर अपील सं./I.T.A. Nos.2825, 2826 & 2827/Mds/2014 "नधा"रण वष" /Assessment Years : 2005-06, 2006-07 & 2007-2008. The Deputy Commissioner Of M/S. Ashok Leyland Ltd, Income Tax, Vs. No.1, Sardar Patel Road, Large Taxpayer Unit -Ii, Guindy, Chennai 600 101. Chennai 600 032. [Pan Aaaca 4651L] (Department) (Assessee )

For Appellant: Shri. Vikram Vijayaraghavan, AdvocateFor Respondent: Shri. Arun C. Bharath, IRS, CIT
Section 35D(2)Section 35D(2)(c)

…आयकर अपील"य अ"धकरण, ’डी’ "यायपीठ, चे"नई IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI "ी चं" पूजार",लेखा सद"य एवं "ीजी. पवन कुमार,"या"यकसद"यकेसम" BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER आयकर अपील सं./I.T.A. Nos.2825, 2826 & 2827/Mds/2014 "नधा"रण वष" /Assessment years : 2005-06, 2006-07 & 2007-2008. The Deputy Commissioner of M/s. Ashok Leyland Ltd, Income Tax, Vs. No.1, Sardar Patel Road, Large Taxpayer Unit -II, Guindy, Chennai 600 101. Chennai 600 032. [PAN AAACA 4651L] (Department) (Assessee ) आयकर अपील सं./I.T.A. Nos.2834, 2835, 2836, 2837, 2838 & 2…

DCIT, Chennai vs. Ashok Leyland Ltd., Chennai

In the result, the appeal of the Revenue in ITA

ITA 2825/CHNY/2014[2005-06]Status: DisposedITAT Chennai23 Sept 2016AY 2005-06

Bench: Shri Chandra Poojari & Shri G. Pavan Kumarआयकर अपील सं./I.T.A. Nos.2825, 2826 & 2827/Mds/2014 "नधा"रण वष" /Assessment Years : 2005-06, 2006-07 & 2007-2008. The Deputy Commissioner Of M/S. Ashok Leyland Ltd, Income Tax, Vs. No.1, Sardar Patel Road, Large Taxpayer Unit -Ii, Guindy, Chennai 600 101. Chennai 600 032. [Pan Aaaca 4651L] (Department) (Assessee )

For Appellant: Shri. Vikram Vijayaraghavan, AdvocateFor Respondent: Shri. Arun C. Bharath, IRS, CIT
Section 35D(2)Section 35D(2)(c)

…आयकर अपील"य अ"धकरण, ’डी’ "यायपीठ, चे"नई IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI "ी चं" पूजार",लेखा सद"य एवं "ीजी. पवन कुमार,"या"यकसद"यकेसम" BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER आयकर अपील सं./I.T.A. Nos.2825, 2826 & 2827/Mds/2014 "नधा"रण वष" /Assessment years : 2005-06, 2006-07 & 2007-2008. The Deputy Commissioner of M/s. Ashok Leyland Ltd, Income Tax, Vs. No.1, Sardar Patel Road, Large Taxpayer Unit -II, Guindy, Chennai 600 101. Chennai 600 032. [PAN AAACA 4651L] (Department) (Assessee ) आयकर अपील सं./I.T.A. Nos.2834, 2835, 2836, 2837, 2838 & 2…

ACIT, Chennai vs. Fl Smidth Minerals Pvt Ltd., Chennai

In the result, the appeal of the Department in ITA

ITA 1918/CHNY/2015[2005-06]Status: DisposedITAT Chennai19 Apr 2016AY 2005-06

Bench: Shri Chandra Poojari & Shri G. Pavan Kumar

For Appellant: Shri. Pathlaveth Peerya, CITFor Respondent: None
Section 143(1)Section 143(3)Section 37(1)

…आयकर अपील"य अ"धकरण, ’सी’ "यायपीठ, चे"नई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI "ी चं" पूजार",लेखा सद"य एवं "ीजी. पवन कुमार,"या"यकसद"यकेसम" BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER आयकर अपील सं./I.T.A. No. 1918/Mds/2015 "नधा"रण वष" /Assessment year : 2005-2006. The Assistant Commissioner Vs. M/s. FL Smidth Minerals Pvt. Ltd, of Income Tax, 34, Egatoor, Corporate Circle 2(1) Kelambakkam, OMR Chennai 600 034. Chennai 603 103. [PAN AAACF 1122D ] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/ Appellant by : Shri. Pathlaveth Peerya, CIT ""यथ"…

M/S. Cj International Hotels Ltd., New Delhi vs. DCIT, New Delhi

ITA 386/DEL/2013[2009-10]Status: DisposedITAT Delhi05 Feb 2016AY 2009-10

Bench: Shri A.T. Varkey & Shri Prashant Maharishi

For Appellant: Shri M.S. Syali, Senior Advocate and Shri Tarandeep Singh, AdvocateFor Respondent: Shri Sunil Chander Sharma, CIT DR

…use on the basis of fixing a percentage on the turnover. In the absence of any details, accepting the claim of percentage on the turnover could not be sustained. Provision for warranty charges was held not deductible. CIT vs. Totork Controls India Ltd. (2007) 293 ITR 311 (Mad)” Thus it is clear that the claim of the assessee with regards payment to NDMC is in the nature of contingent liability and hence not allowable under the act and is added back to the income of the assessee.” 12. Being aggrieved the assesse preferred an appeal to Ld CIT(A). Ld CIT(A) was of the view that License Deed dated 14th July 1982 was…

DCIT, New Delhi vs. M/S. C.J. International Hotels Ltd., New Delhi

ITA 218/DEL/2013[2009-10]Status: DisposedITAT Delhi05 Feb 2016AY 2009-10

Bench: Shri A.T. Varkey & Shri Prashant Maharishi

For Appellant: Shri M.S. Syali, Senior Advocate and Shri Tarandeep Singh, AdvocateFor Respondent: Shri Sunil Chander Sharma, CIT DR

…use on the basis of fixing a percentage on the turnover. In the absence of any details, accepting the claim of percentage on the turnover could not be sustained. Provision for warranty charges was held not deductible. CIT vs. Totork Controls India Ltd. (2007) 293 ITR 311 (Mad)” Thus it is clear that the claim of the assessee with regards payment to NDMC is in the nature of contingent liability and hence not allowable under the act and is added back to the income of the assessee.” 12. Being aggrieved the assesse preferred an appeal to Ld CIT(A). Ld CIT(A) was of the view that License Deed dated 14th July 1982 was…

M/S. Cj International Hotels Ltd., New Delhi vs. DCIT, New Delhi

ITA 787/DEL/2012[2008-09]Status: DisposedITAT Delhi05 Feb 2016AY 2008-09

Bench: Shri A.T. Varkey & Shri Prashant Maharishi

For Appellant: Shri M.S. Syali, Senior Advocate and Shri Tarandeep Singh, AdvocateFor Respondent: Shri Sunil Chander Sharma, CIT DR

…use on the basis of fixing a percentage on the turnover. In the absence of any details, accepting the claim of percentage on the turnover could not be sustained. Provision for warranty charges was held not deductible. CIT vs. Totork Controls India Ltd. (2007) 293 ITR 311 (Mad)” Thus it is clear that the claim of the assessee with regards payment to NDMC is in the nature of contingent liability and hence not allowable under the act and is added back to the income of the assessee.” 12. Being aggrieved the assesse preferred an appeal to Ld CIT(A). Ld CIT(A) was of the view that License Deed dated 14th July 1982 was…

M/S. Cj International Hotels Ltd., New Delhi vs. DCIT, New Delhi

ITA 771/DEL/2012[2003-04]Status: DisposedITAT Delhi05 Feb 2016AY 2003-04

Bench: Shri A.T. Varkey & Shri Prashant Maharishi

For Appellant: Shri M.S. Syali, Senior Advocate and Shri Tarandeep Singh, AdvocateFor Respondent: Shri Sunil Chander Sharma, CIT DR

…use on the basis of fixing a percentage on the turnover. In the absence of any details, accepting the claim of percentage on the turnover could not be sustained. Provision for warranty charges was held not deductible. CIT vs. Totork Controls India Ltd. (2007) 293 ITR 311 (Mad)” Thus it is clear that the claim of the assessee with regards payment to NDMC is in the nature of contingent liability and hence not allowable under the act and is added back to the income of the assessee.” 12. Being aggrieved the assesse preferred an appeal to Ld CIT(A). Ld CIT(A) was of the view that License Deed dated 14th July 1982 was…

ACIT, New Delhi vs. M/S. C.J. International Hotels Ltd., New Delhi

ITA 1107/DEL/2012[2008-09]Status: DisposedITAT Delhi05 Feb 2016AY 2008-09

Bench: Shri A.T. Varkey & Shri Prashant Maharishi

For Appellant: Shri M.S. Syali, Senior Advocate and Shri Tarandeep Singh, AdvocateFor Respondent: Shri Sunil Chander Sharma, CIT DR

…use on the basis of fixing a percentage on the turnover. In the absence of any details, accepting the claim of percentage on the turnover could not be sustained. Provision for warranty charges was held not deductible. CIT vs. Totork Controls India Ltd. (2007) 293 ITR 311 (Mad)” Thus it is clear that the claim of the assessee with regards payment to NDMC is in the nature of contingent liability and hence not allowable under the act and is added back to the income of the assessee.” 12. Being aggrieved the assesse preferred an appeal to Ld CIT(A). Ld CIT(A) was of the view that License Deed dated 14th July 1982 was…

D.C.I.T Cir - 11, Kolkata. vs. M/S Eastern Metec Pvt Ltd, Kolkata

In the result, Revenue’s appeal is partly allowed for statistical purposes

ITA 411/KOL/2013[2009-10]Status: DisposedITAT Kolkata07 Oct 2015AY 2009-10

Bench: Shri N.V. Vasudevan & Shri Waseem Ahmedassessment Year :2009-10

Section 143(3)

…r. The AO has also cited the case laws in regard to assessee’s claim as detailed below:- Hon’ble Supreme court in the case of Shri Sajjan Mills Ltd. v, CIT 156 ITR 585 (SC) and Hon’ble Madras High court in the case of CIT Vs. Rotork Controls India Ltd. (2007) 293 ITR 311 (Mad) ITA No.411/Kol/2013 A.Y. 2009-10 DCIT Cir-11, Kol. V. M/s Estern Metec Pvt. Ltd. Page 3 Before the CIT(A) the assessee has pointed out that the judgment of the Hon’ble supreme Court has reversed the judgment of the Hon’ble Madras High Court in the case of Rotork Controls India Ltd. (supra). Therefore the Ld. CIT(A) has allowed the appeal i…