IBM India Ltd. v. CIT(A)

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

…lowing decisions wherein it has been held 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 integ…

DCIT Cir 3(3), Mumbai vs. Kail Ltd, Mumbai

In the result, appeals of the Revenue are partly allowed for statistical purposes

Bench: Shri C.N. Prasad, Hon'Ble & Shri G. Manjunathan, Hon'Ble

…ade to the book profits u/s 115JB of the Act in the case of provision for warranty expenses as the same constitute an ascertain liability. Reliance was also placed on the decision of the Bangalore Bench of the Tribunal in the case of IBM India Ltd. v. CIT(A) [105 ITD 1] wherein it was held that the liability towards warranty is inbuilt in the sale prices itself and so the liability is not contingent but an ascertained one and to be allowed in the M/s. Kail Ltd. year of sales. In the case of CIT v. Jay Bee Industries [71 Taxmann 386] the Hon'ble Punjab and Haryana High Court held that provision of warranty for rep…

DCIT Cir 3(3), Mumbai vs. Kali Ltd, Mumbai

In the result, appeals of the Revenue are partly allowed for statistical purposes

Bench: Shri C.N. Prasad, Hon'Ble & Shri G. Manjunathan, Hon'Ble

…ade to the book profits u/s 115JB of the Act in the case of provision for warranty expenses as the same constitute an ascertain liability. Reliance was also placed on the decision of the Bangalore Bench of the Tribunal in the case of IBM India Ltd. v. CIT(A) [105 ITD 1] wherein it was held that the liability towards warranty is inbuilt in the sale prices itself and so the liability is not contingent but an ascertained one and to be allowed in the M/s. Kail Ltd. year of sales. In the case of CIT v. Jay Bee Industries [71 Taxmann 386] the Hon'ble Punjab and Haryana High Court held that provision of warranty for rep…

DCIT Cir 3(3), Mumbai vs. Kali Ltd, Mumbai

In the result, appeals of the Revenue are partly allowed for statistical purposes

Bench: Shri C.N. Prasad, Hon'Ble & Shri G. Manjunathan, Hon'Ble

…ade to the book profits u/s 115JB of the Act in the case of provision for warranty expenses as the same constitute an ascertain liability. Reliance was also placed on the decision of the Bangalore Bench of the Tribunal in the case of IBM India Ltd. v. CIT(A) [105 ITD 1] wherein it was held that the liability towards warranty is inbuilt in the sale prices itself and so the liability is not contingent but an ascertained one and to be allowed in the M/s. Kail Ltd. year of sales. In the case of CIT v. Jay Bee Industries [71 Taxmann 386] the Hon'ble Punjab and Haryana High Court held that provision of warranty for rep…

3I Infotech Ltd, Navi Mumbai vs. Asst CIT 10(3), Mumbai

In the result, appeal of the assessee is allowed

…e of accounting software in view of fast changing technology in the field of software, need for its replacement at short interval are essential and therefore, the same could not be disallowed merely on the ground of acquiring benefit of enduring nature.” Ltd. 105 ITD 1, has held as under :- “Where in the course of business, the assessee acquires an application software merely to carry out its business operation efficiently and smoothly, though there was an enduring benefit, it did not result into acquisition of any capital asset and therefore the said expenditure was to be treated as revenue expenditure.” The ITA…