Rotork Controls India Pvt. Ltd. v. CIT

314 ITR 62Supreme Court of India2009#69 most cited

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

A provision for expenses, such as warranty, is a deductible liability for income tax purposes if it constitutes a present obligation arising from past events, and a reliable estimate of the amount of obligation is possible.

739

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2009 to 2026.

Also referred to as

Rotork Controls India Pvt. Ltd. v. CIT · 314 ITR 62 · Section 37(1) · provision for warranty expenses · allowability of provision · definition of liability · present obligation · reliable estimate · mercantile system of accounting · revenue expenditure deduction

Also reported as

223 CTR 425

Sections most often in play

Section 143(3)Section 37(1)Section 40(a)(ia)Section 115JBSection 14ASection 147Section 234CSection 40(a)(i)

Issues it is cited on

section 35denduring benefitsection 32(1)put to useblock of assetssection 40(a)(i)intangible assetsmercantile system of accountingsection 35section 37(1)section 32revenue expenditure

Judgments citing Rotork Controls India Pvt. Ltd. v. CIT

The Commissioner of Income Tax vs. M/S Ibm India Ltd

The Appeal is partly allowed

ITA/130/2007HC Karnataka10 Apr 2013

Bench: B.MANOHAR,N.KUMAR

Section 115JSection 234Section 234BSection 260Section 4

…7 5. Learned counsel for the Revenue contends though now the said issue is covered by the judgment of the Hon’ble Supreme Court in ROTORK CONTROLS INDIA (P) LIMITED –vs- COMMISSIONER OF INCOME TAX reported in (2009) 314 ITR 62. Such a relief is permissible only if the condition set out in the said judgment is fulfilled. In the instant case, the same is not fulfilled and therefore, the finding of the Tribunal is to be set aside and the matter is to be remanded back to the Assessing Authority for fresh consideration in the light of the law declared by the Apex Co…

The Commissioner of Income Tax vs. M/S. Denso Kirloskar Industries Pvt Ltd

Appeal is allowed

ITA/195/2009HC Karnataka19 Feb 2013

Bench: D.V.SHYLENDRA KUMAR,B.SREENIVASE GOWDA

Section 260

…IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 19TH DAY OF FEBRUARY, 2013 PRESENT THE HON’BLE MR. JUSTICE D V SHYLENDRA KUMAR AND THE HON’BLE MR. JUSTICE B SREENIVASE GOWDA ITA No.195 of 2009 BETWEEN: 1 THE COMMISSIONER OF INCOME TAX C.R. BUILDING, QUEENS’ ROAD, BANGALORE 2 THE ASST. COMMISSIONER OF INCOME TAX CIRCLE – 11[1] C.R. BUILDING, QUEENS’ ROAD, BANGALORE … APPELLANTS [By Sri K V Aravind, Adv.,] AND: M/S. DENSO KIRLOSKAR INDUSTRIES PVT. LTD. 30TH K M STONE, TUMKUR ROAD VISWESWARAPURAM NELAMANGALA BANGALORE – 562 123 … RES…

CIT vs. Becton Dickinson India Pvt Ltd

ITA/42/2012HC Delhi19 Nov 2012

Bench: This Court I.E. Whether The Tribunal Fell Into Error In Treating The Provision For Waruanty As

Section 115J

…n terms of clause (c) of the aforesaid Explanation (l) whichwe have extracted above, it cannot be said that the amount or provisions for meeting liabilities other than ascertained liabilities, the Hon'ble Supreme Court in Rotork Controls India P. ltd. Vs. CIT 314 ITR 62 was concernedwith an identical issue wherein identical provisions for warranty were made. The apex court after elaborately dealing with the issue has held that the assessee was entitled to deduction for provision of warranty claims. In the case before us what the AO is trying is to make an addition to the book profit ils I I5JB of the AcL In our v…

CIT vs. Becton Dickinson India Pvt Ltd

ITA/40/2012HC Delhi19 Nov 2012

Bench: This Court I.E. Whether The Tribunal Fell Into Error In Treating The Provision For Waruanty As

Section 115J

…n terms of clause (c) of the aforesaid Explanation (l) whichwe have extracted above, it cannot be said that the amount or provisions for meeting liabilities other than ascertained liabilities, the Hon'ble Supreme Court in Rotork Controls India P. ltd. Vs. CIT 314 ITR 62 was concernedwith an identical issue wherein identical provisions for warranty were made. The apex court after elaborately dealing with the issue has held that the assessee was entitled to deduction for provision of warranty claims. In the case before us what the AO is trying is to make an addition to the book profit ils I I5JB of the AcL In our v…

CIT vs. Becton Dickinson India Pvt Ltd

ITA/43/2012HC Delhi19 Nov 2012

Bench: This Court I.E. Whether The Tribunal Fell Into Error In Treating The Provision For Waruanty As

Section 115J

…n terms of clause (c) of the aforesaid Explanation (l) whichwe have extracted above, it cannot be said that the amount or provisions for meeting liabilities other than ascertained liabilities, the Hon'ble Supreme Court in Rotork Controls India P. ltd. Vs. CIT 314 ITR 62 was concernedwith an identical issue wherein identical provisions for warranty were made. The apex court after elaborately dealing with the issue has held that the assessee was entitled to deduction for provision of warranty claims. In the case before us what the AO is trying is to make an addition to the book profit ils I I5JB of the AcL In our v…

CIT vs. Becton Dickinson India Pvt Ltd

ITA - 43 / 2012HC Delhi19 Nov 2012

Bench: This Court I.E. Whether The Tribunal Fell Into Error In Treating The Provision For Waruanty As

Section 115J

…n terms of clause (c) of the aforesaid Explanation (l) whichwe have extracted above, it cannot be said that the amount or provisions for meeting liabilities other than ascertained liabilities, the Hon'ble Supreme Court in Rotork Controls India P. ltd. Vs. CIT 314 ITR 62 was concernedwith an identical issue wherein identical provisions for warranty were made. The apex court after elaborately dealing with the issue has held that the assessee was entitled to deduction for provision of warranty claims. In the case before us what the AO is trying is to make an addition to the book profit ils I I5JB of the AcL In our v…

CIT vs. Becton Dickinson India Pvt Ltd

ITA - 41 / 2012HC Delhi19 Nov 2012

Bench: This Court I.E. Whether The Tribunal Fell Into Error In Treating The Provision For Waruanty As

Section 115J

…n terms of clause (c) of the aforesaid Explanation (l) whichwe have extracted above, it cannot be said that the amount or provisions for meeting liabilities other than ascertained liabilities, the Hon'ble Supreme Court in Rotork Controls India P. ltd. Vs. CIT 314 ITR 62 was concernedwith an identical issue wherein identical provisions for warranty were made. The apex court after elaborately dealing with the issue has held that the assessee was entitled to deduction for provision of warranty claims. In the case before us what the AO is trying is to make an addition to the book profit ils I I5JB of the AcL In our v…

CIT vs. Becton Dickinson India Pvt Ltd

ITA - 40 / 2012HC Delhi19 Nov 2012

Bench: This Court I.E. Whether The Tribunal Fell Into Error In Treating The Provision For Waruanty As

Section 115J

…n terms of clause (c) of the aforesaid Explanation (l) whichwe have extracted above, it cannot be said that the amount or provisions for meeting liabilities other than ascertained liabilities, the Hon'ble Supreme Court in Rotork Controls India P. ltd. Vs. CIT 314 ITR 62 was concernedwith an identical issue wherein identical provisions for warranty were made. The apex court after elaborately dealing with the issue has held that the assessee was entitled to deduction for provision of warranty claims. In the case before us what the AO is trying is to make an addition to the book profit ils I I5JB of the AcL In our v…

CIT vs. Becton Dickinson India Pvt Ltd

ITA - 42 / 2012HC Delhi19 Nov 2012

Bench: This Court I.E. Whether The Tribunal Fell Into Error In Treating The Provision For Waruanty As

Section 115J

…n terms of clause (c) of the aforesaid Explanation (l) whichwe have extracted above, it cannot be said that the amount or provisions for meeting liabilities other than ascertained liabilities, the Hon'ble Supreme Court in Rotork Controls India P. ltd. Vs. CIT 314 ITR 62 was concernedwith an identical issue wherein identical provisions for warranty were made. The apex court after elaborately dealing with the issue has held that the assessee was entitled to deduction for provision of warranty claims. In the case before us what the AO is trying is to make an addition to the book profit ils I I5JB of the AcL In our v…

CIT vs. Becton Dickinson India Pvt Ltd

ITA - 39 / 2012HC Delhi19 Nov 2012

Bench: This Court I.E. Whether The Tribunal Fell Into Error In Treating The Provision For Warranty As 2012:Dhc:6863-Db

Section 115J

…ms of clause (c) of the aforesaid Explanation (1) which we have extracted above, it cannot be said that the amount or provisions for meeting liabilities other than ascertained liabilities, the Hon‟ble Supreme Court in Rotork Controls India P. ltd. Vs. CIT 314 ITR 62 was concerned with an identical issue wherein identical provisions for warranty were made. The apex court after elaborately dealing with the issue has held that the assessee was entitled to deduction for provision of warranty claims. In the case before us what the AO is trying is to make an addition to the book profit u/s 115JB of the Act.…

Eicher Motors Ltd

The appeal is dismissed

ITA/255/2012HC Delhi29 May 2012

…Page 8 of 11 the Tribunal calls for any interference. 11. At this stage learned counsel for the appellant-assessee has relied on the decision of the Supreme Court in Rotork Controls India P. Ltd. v. CIT, (2009) 314 ITR 62 (SC). Our attention has been drawn to the following paragraphs: - “………..Such estimates need reassessment every year. As one reaches close to the end of the warranty period, the probability that the warranty expenses will be incurred is considerably reduced and that should be reflected in the estimation amount. Whether this should be done…

Commissioner of Income Tax vs. Sri. B. Venkatesam

The appeal stands disposed of with no order as to

ITTA/41/2000HC Telangana01 Dec 2011
For Appellant: Mr C.S. Aggarwal, Sr. Advocate withFor Respondent: Mr Sanjeev Sabharwal, Sr. Standing Counsel
Section 260A(1)Section 43B

…urposes of the Income Tax Act as it clearly indicates the liabilities which cannot be considered as deductible for the purposes of determining the taxable income of an assessee. The Supreme Court in the case of Rotork Controls India P. Ltd. v. CIT: (2009) 314 ITR 62 while considering whether a provision made for future claims against warrantees was allowable as a deduction, held that; “a provision is recognised when : (a) an enterprise has a present obligation as a result of a past event; (b) it is probable that an outflow of resources will be required to settle the obligation; and (c) a reliable estimat…

Commissioner of Income Tax Delhi VI vs. Whirphool of India Ltd

Appeal is disposed of in the aforesaid terms

ITA/1154/2008HC Delhi24 Jan 2011

Bench: Pointing Out The Questions Of Law Which Were Framed While Admitting This Appeal & To Answer Those Questions, We Deem It Appropriate To Take Note Of The Facts Under Which These Questions Have Arisen For Consideration. 2. In The Assessment Year 1996-97 Relevant To Financial Year 1995-96, The Respondent/Assessee Had Filed Its Return Of Income On 30Th November, 1996 Declaring A Loss Of ` 48.71 Crores. This Income Was Assessed Under Section 143 (3) Of The Income-Tax Act (Hereinafter Referred To As The „Act‟) Making Various Additions. The Assessing Officer Assessed The Loss At ` 45.25 Crores Instead Of `

Section 143Section 40

…s of commercial practice and accountancy”. ITA No.1154/2009 Page 14 of 22 15. Entire law on this aspect is revisited by the Supreme Court in the case of Rotork Controls India P. Ltd. Vs. Commissioner of Income-Tax, 314 ITR 62. That was also a case where a standard warranty was provided by the assessee at the time of sale of the goods and provision for warranty was made. However, question again was whether it was contingent liability or praesenti and thus could be treated as expenditure for the purpose of deduction under Section 37 of the Act in the year in which…

Commissioner of Income Tax Delhi VI vs. Whirphool of India Ltd

Appeal is disposed of in the aforesaid terms

ITA - 1154 / 2008HC Delhi24 Jan 2011

Bench: Pointing Out The Questions Of Law Which Were Framed While Admitting This Appeal & To Answer Those Questions, We Deem It Appropriate To Take Note Of The Facts Under Which These Questions Have Arisen For Consideration. 2. In The Assessment Year 1996-97 Relevant To Financial Year 1995-96, The Respondent/Assessee Had Filed Its Return Of Income On 30Th November, 1996 Declaring A Loss Of ` 48.71 Crores. This Income Was Assessed Under Section 143 (3) Of The Income-Tax Act (Hereinafter Referred To As The „Act‟) Making Various Additions. The 2011:Dhc:428-Db

Section 143Section 40

…ness, regard being had to the accepted principles of commercial practice and accountancy”. 2011:DHC:428-DB 15. Entire law on this aspect is revisited by the Supreme Court in the case of Rotork Controls India P. Ltd. Vs. Commissioner of Income-Tax, 314 ITR 62. That was also a case where a standard warranty was provided by the assessee at the time of sale of the goods and provision for warranty was made. However, question again was whether it was contingent liability or praesenti and thus could be treated as expenditure for the purpose of deduction under Section 37 of the Act in the year in which…

Commissioner of Income Tax vs. Nokia India P.Ltd

ITA - 1165 / 2009HC Delhi19 Oct 2010
Section 234B

…s Court in Commissioner of Income Tax vs. Vinitac Corporation Pvt. Ltd., ITR No. 278 P-337. We may only note that the aforesaid judgment also stands affirmed by the Supreme Court in the case of Rotork Controls India P.Ltd. v. Commissioner of Income Tax (2009) 314 ITR 62(SC). ![](_page_1_Picture_1.jpeg) -2- The only argument of learned counsel for the assessee is that no basis was shown by the assessee for making the provision. She points out that in the year 2000-2001, the provision of Rs. 2.60 crores was made whereas in the Assessment year in question i.e. Assessment Year 2001-2002 the provision made is of a…

Commissioner of Income Tax Del vs. Ericssion Communications P.Ltd

ITA - 843 / 2007HC Delhi25 Sept 2009
Section 260ASection 37Section 41(1)

…his regard as to whether provision for a warranty is a contingent liability or a liability in presentile is now fully covered in favour of the assessee by the decision of the Supreme Court in *Rotork Controls India P. Ltd Vs. Commissioner of Income Tax (2009) 314 ITR 62.* In this judgment, the Supreme Court has held that where valve actuators were sold by a company and for which a warranty was provided by an assessee company then the warranty became the integral part of the sale price and consequently the warranty provisions had to be recognized because the assessee had a present obligation as a result of past e…

Commissioner of Income Tax vs. Ericssion Communications P.Ltd

ITA - 714 / 2007HC Delhi25 Sept 2009
Section 260ASection 37Section 41(1)

…his regard as to whether provision for a warranty is a contingent liability or a liability in presentile is now fully covered in favour of the assessee by the decision of the Supreme Court in *Rotork Controls India P. Ltd Vs. Commissioner of Income Tax (2009) 314 ITR 62.* In this judgment, the Supreme Court has held that where valve actuators were sold by a company and for which a warranty was provided by an assessee company then the warranty became the integral part of the sale price and consequently the warranty provisions had to be recognized because the assessee had a present obligation as a result of past e…

Commissioner of Income Tax vs. Ericsson India P.Ltd

ITA - 733 / 2008HC Delhi25 Sept 2009
Section 260ASection 37Section 41(1)

…his regard as to whether provision for a warranty is a contingent liability or a liability in presentile is now fully covered in favour of the assessee by the decision of the Supreme Court in *Rotork Controls India P. Ltd Vs. Commissioner of Income Tax (2009) 314 ITR 62.* In this judgment, the Supreme Court has held that where valve actuators were sold by a company and for which a warranty was provided by an assessee company then the warranty became the integral part of the sale price and consequently the warranty provisions had to be recognized because the assessee had a present obligation as a result of past e…

Commissioner of Income Tax Delhi IV vs. Ericsson Communication Ltd

ITA - 696 / 2007HC Delhi25 Sept 2009
Section 260ASection 37Section 41(1)

…his regard as to whether provision for a warranty is a contingent liability or a liability in presentile is now fully covered in favour of the assessee by the decision of the Supreme Court in *Rotork Controls India P. Ltd Vs. Commissioner of Income Tax (2009) 314 ITR 62.* In this judgment, the Supreme Court has held that where valve actuators were sold by a company and for which a warranty was provided by an assessee company then the warranty became the integral part of the sale price and consequently the warranty provisions had to be recognized because the assessee had a present obligation as a result of past e…