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 367,154 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 Hong Kong & Shanghai Banking Corporation Ltd., Mumbai vs. Jt. Director of Income Tax (International Taxation) - Range -3, Mumbai

In the result, assessee’s appeals are allowed wherein

ITA 4765/MUM/2016[2005-06]Status: DisposedITAT Mumbai30 Apr 2024AY 2005-06

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GAGAN GOYAL (Accountant Member)

Section 10(15)(iv)Section 10(34)Section 143(3)Section 14A

…IN THE INCOME TAX APPELLATE TRIBUNAL, ‘H‘ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI GAGAN GOYAL, ACCOUNTANT MEMBER & The Hongkong & Vs. The Joint Director of Shanghai Banking Income Tax Corporation Ltd. (International Srnior Vice President Taxation)-3, Mumbai Tax, 1st Floor, Scindia India Area Management House 5th Floor, Hongkong N.M. Marg, Ballard Bank Building, Estate, Mumbai – 400 52/60, MG Road 038 Fort, Mumbai – 400 001 PAN/GIR No.AAACT4652J (Appellant) .. (Respondent) & Deputy Commissioner Vs. The Hongkong & Shanghai of Income Tax-(IT)- Banking Corporation Ltd. 2(2)(2), Srnior Vice Pre…

DDIT (It) 3(1), Mumbai vs. Hongkong & Sanghai Banking Corporation Ltd, Mumbai

In the result, assessee’s appeals are allowed wherein

ITA 7824/MUM/2010[2004-05]Status: DisposedITAT Mumbai30 Apr 2024AY 2004-05

Bench: IN THE INCOME TAX APPELLATE TRIBUNAL, ‘H’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA (Judicial Member), SHRI GAGAN GOYAL, ACCOUNTANT MEMBER ITA No.7336/Mum/2010 (Assessment Year :2004-05) & ITA No.4765/Mum/2016 (Assessment Year :2005-06) The Hongkong & Shanghai Banking Corporation Ltd. Srnior Vice President Tax, India Area Management 5th Floor, Hongkong Bank Building, 52/60, MG Road Fort, Mumbai – 400 001 (Appellant) Vs. The Joint Director of Income Tax (International Taxation)-3, Mumbai 1st Flo

Section 10(15)(iv)Section 10(34)Section 143(3)Section 14A

…IN THE INCOME TAX APPELLATE TRIBUNAL, ‘H‘ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI GAGAN GOYAL, ACCOUNTANT MEMBER & The Hongkong & Vs. The Joint Director of Shanghai Banking Income Tax Corporation Ltd. (International Srnior Vice President Taxation)-3, Mumbai Tax, 1st Floor, Scindia India Area Management House 5th Floor, Hongkong N.M. Marg, Ballard Bank Building, Estate, Mumbai – 400 52/60, MG Road 038 Fort, Mumbai – 400 001 PAN/GIR No.AAACT4652J (Appellant) .. (Respondent) & Deputy Commissioner Vs. The Hongkong & Shanghai of Income Tax-(IT)- Banking Corporation Ltd. 2(2)(2), Srnior Vice Pre…

The Hongkong & Shanghai Banking Corporation Ltd, Mumbai vs. DDIT (It) 3(1), Mumbai

In the result, assessee’s appeals are allowed wherein

ITA 7336/MUM/2010[2004-05]Status: DisposedITAT Mumbai30 Apr 2024AY 2004-05

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GAGAN GOYAL, ACCOUNTANT MEMBER & The Hongkong & Shanghai Banking Corporation Ltd. Srnior (Vice President)

Section 10(15)(iv)Section 10(34)Section 143(3)Section 14A

…IN THE INCOME TAX APPELLATE TRIBUNAL, ‘H‘ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI GAGAN GOYAL, ACCOUNTANT MEMBER & The Hongkong & Vs. The Joint Director of Shanghai Banking Income Tax Corporation Ltd. (International Srnior Vice President Taxation)-3, Mumbai Tax, 1st Floor, Scindia India Area Management House 5th Floor, Hongkong N.M. Marg, Ballard Bank Building, Estate, Mumbai – 400 52/60, MG Road 038 Fort, Mumbai – 400 001 PAN/GIR No.AAACT4652J (Appellant) .. (Respondent) & Deputy Commissioner Vs. The Hongkong & Shanghai of Income Tax-(IT)- Banking Corporation Ltd. 2(2)(2), Srnior Vice Pre…

DCIT, New Delhi vs. M/S. Genpact India, Gurgaon

The appeal of the assessee is partly allowed and appeal of the

ITA 4251/DEL/2016[2011-12]Status: DisposedITAT Delhi29 Apr 2024AY 2011-12

Bench: Shri M. Balaganesh & Shri Yogesh Kumar Usassessment Year: 2011-12

Section 10ASection 143(3)

…y the ld. AO. 9.3 The ld. CIT(A) observed that assessee’s case is squarely covered by the decision of the Hon’ble Apex Court in the case of Bharat Earth Movers Ltd. reported in 245 ITR 428 (SC) and in the case of Rotork Controls India (P) Ltd. reported in 314 ITR 62 (SC). Further, the ld. CIT(A) observed that similar issue was decided in assessee’s favour by his predecessor for A.Ys. 2007-08, 2008-09 and 2009-10. 9.4 The ld. CIT(DR) argued that assessee by claiming a deduction had merely made a provision for discount which clearly falls under the ambit of ‘base erosion’. These discounts have been provided…

Ms. Genpact India, New Delhi vs. DCIT, New Delhi

The appeal of the assessee is partly allowed and appeal of the

ITA 4060/DEL/2016[2011-12]Status: DisposedITAT Delhi29 Apr 2024AY 2011-12

Bench: Shri M. Balaganesh & Shri Yogesh Kumar Usassessment Year: 2011-12

Section 10ASection 143(3)

…y the ld. AO. 9.3 The ld. CIT(A) observed that assessee’s case is squarely covered by the decision of the Hon’ble Apex Court in the case of Bharat Earth Movers Ltd. reported in 245 ITR 428 (SC) and in the case of Rotork Controls India (P) Ltd. reported in 314 ITR 62 (SC). Further, the ld. CIT(A) observed that similar issue was decided in assessee’s favour by his predecessor for A.Ys. 2007-08, 2008-09 and 2009-10. 9.4 The ld. CIT(DR) argued that assessee by claiming a deduction had merely made a provision for discount which clearly falls under the ambit of ‘base erosion’. These discounts have been provided…

M/S. Shankar Ramchandra Earthmovers Private Limited, Pune vs. The Deputy Commissioner of Income Tax Circle-5, Pune

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 1170/PUN/2023[2021-22]Status: DisposedITAT Pune26 Mar 2024AY 2021-22

Bench: Shri Partha Sarathi Chaudhury & Dr. Dipak P. Ripote

Section 143(3)Section 250Section 69C

…e Company. Appellant has relied on following case laws in support of his claim: 1. Asstt. CIT v. CEC Soma CICI JV ITA Nos. 126 & 1822/Bang/2016 2. Calcutta Co. Ltd. v. CIT (1959) 37 ITR 1 (SC) : 1959 3. Rotork Controls India (P) Ltd. v. CIT reported in (2009) 314 ITR 62 (SC) : 2009 4. DCIT v. Ashiana Housing Ltd. ITA No. 714/Kol/2018 5. Grundfos Pumpas India Ltd. v. DCIT [TCA No. 1003 of 2008 3. On the facts and in the circumstances the ld. CIT(A) has erred in calculating the disallowance of provision at amount of Rs.6,29,20,000/- (being 20% of the Provision for Operation & Maintenance expenses) without giving du…

DCIT, Circle-7(1), Delhi vs. Eicher Motors Limited, Delhi

ITA 3721/DEL/2023[2015-16]Status: DisposedITAT Delhi15 Mar 2024AY 2015-16

Bench: Shri Kul Bharat & Dr. B.R.R. Kumarassessment Year: 2015-16

Section 35

…nch 'B', New Delhi in assessee's own case entitled DCIT Vs M/s. Eicher Motors Ltd. in I.T.A. No. 3560/Del12008 order dated 18.09.2009. Ld. A.R. also relied upon the judgment of Hon'ble Supreme Court in the case entitled Rotork Controls India Pvt. Ltd. Vs CIT, 314 ITR 62 (S.C.). The ratio of judgment (supra) is that estimated provisions for warranty are allowable for deduction. Operative part of the judgement (supra) is reproduced below for facility of reference: "Held, reversing the decision of the Hon'ble High Court, that the valve actuators, manufactured by the assessee, were sophisticated goods and statistical…

Eicher Motors Limited, New Delhi vs. DCIT Circle 7(1) New Delhi, New Delhi

ITA 3525/DEL/2023[2015-16]Status: DisposedITAT Delhi15 Mar 2024AY 2015-16

Bench: Shri Kul Bharat & Dr. B.R.R. Kumarassessment Year: 2015-16

Section 35

…nch 'B', New Delhi in assessee's own case entitled DCIT Vs M/s. Eicher Motors Ltd. in I.T.A. No. 3560/Del12008 order dated 18.09.2009. Ld. A.R. also relied upon the judgment of Hon'ble Supreme Court in the case entitled Rotork Controls India Pvt. Ltd. Vs CIT, 314 ITR 62 (S.C.). The ratio of judgment (supra) is that estimated provisions for warranty are allowable for deduction. Operative part of the judgement (supra) is reproduced below for facility of reference: "Held, reversing the decision of the Hon'ble High Court, that the valve actuators, manufactured by the assessee, were sophisticated goods and statistical…

Maruti Suzuki India Ltd., New Delhi vs. Addl. CIT, New Delhi

In the result, the appeal of the assessee in ITA No

ITA 4081/DEL/2010[2003-04]Status: PendingITAT Delhi12 Mar 2024AY 2003-04

Bench: Shri Saktijit Dey & Shri N.K. Billaiya

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri Rajesh Kumar, CIT-DR

…isfied. The liability of the Appellant to pay the additional customs duty was contingent upon the importers being called upon to pay the same. Reference was made by this Court to the decision of the Supreme Court in Rotork Controls India P. Ltd. v. CIT [2009] 314 ITR 62 (SC) where three conditions were laid down while considering where a provision made for future claims against warrantees was allowable as a deduction. On the facts of the case, this Court held that subject liability was a contingent liability in respect thereof could not be allowed as a deduction for the AY in question. 41.6. Specific to Section…

M/S. International Tractors Ltd., New Delhi vs. DCIT(Ltu), New Delhi

The appeal of the assessee is allowed and appeal of the revenue is dismissed

ITA 3811/DEL/2014[2009-10]Status: DisposedITAT Delhi05 Mar 2024AY 2009-10

Bench: Shri Saktijit Dey & Shri M. Balaganeshinternational Tractors Ltd, Vs. Dcit (Ltu), Sonalika House, 282, Nbcc Plaza, Pushp Agcr Enclave, Vihar, Sector-Iii, Karkardooma, Delhi- New Delhi 110092 (Appellant) (Respondent) Pan: Aaaci2270H Dcit (Ltu) International Tractors Ltd, New Delhi Sonalika House, 282, Agcr Enclave, Karkardooma, Delhi-110092 (Appellant) (Respondent) Pan: Aaaci2270H

For Appellant: Shri Mukesh Bhutani, AdvFor Respondent: Shri Anuj Garg, Sr. DR
Section 143(3)Section 14ASection 80J

…ity arising out of past events and provision amount is determined scientifically on the basis of past performance. The assessee also placed reliance on the decision of the Hon'ble Supreme Court in the case of Rotork Controls India Pvt. Ltd Vs. CIT reported in 314 ITR 62. The assessee specifically submitted before the ld AO that it offers standard warranty for the period of 18 months at the time of sale of products. In the event of any part of product is found to be defective within a period of 18 months from the date of sale the assessee company pursuant to the warranty clause would replace the defective part fre…

DCIT(Ltu), New Delhi vs. M/S. International Tractors Ltd., New Delhi

The appeal of the assessee is allowed and appeal of the revenue is dismissed

ITA 3663/DEL/2014[2009-10]Status: DisposedITAT Delhi05 Mar 2024AY 2009-10

Bench: Shri Saktijit Dey & Shri M. Balaganeshinternational Tractors Ltd, Vs. Dcit (Ltu), Sonalika House, 282, Nbcc Plaza, Pushp Agcr Enclave, Vihar, Sector-Iii, Karkardooma, Delhi- New Delhi 110092 (Appellant) (Respondent) Pan: Aaaci2270H Dcit (Ltu) International Tractors Ltd, New Delhi Sonalika House, 282, Agcr Enclave, Karkardooma, Delhi-110092 (Appellant) (Respondent) Pan: Aaaci2270H

For Appellant: Shri Mukesh Bhutani, AdvFor Respondent: Shri Anuj Garg, Sr. DR
Section 143(3)Section 14ASection 80J

…ity arising out of past events and provision amount is determined scientifically on the basis of past performance. The assessee also placed reliance on the decision of the Hon'ble Supreme Court in the case of Rotork Controls India Pvt. Ltd Vs. CIT reported in 314 ITR 62. The assessee specifically submitted before the ld AO that it offers standard warranty for the period of 18 months at the time of sale of products. In the event of any part of product is found to be defective within a period of 18 months from the date of sale the assessee company pursuant to the warranty clause would replace the defective part fre…

ACIT Circle-19(1), New Delhi vs. Oppo Mobiles India (P) Ltd, New Delhi

In the result, appeal of the Revenue is dismissed

ITA 3789/DEL/2019[2015-16]Status: DisposedITAT Delhi23 Jan 2024AY 2015-16

Bench: Shri N.K. Billaiya & Ms. Astha Chandraasstt. Year 2015-16

For Appellant: Shri Ravi Sharma, AdvFor Respondent: Shri Subhra Jyoti Chakraborty, CIT(DR)
Section 143(3)Section 37(1)

…ase of M/s. Rohde & Schwarz India (P) Ltd. for A. Y. 2007-08 & 2008-09 has decided the issue in favour of the appellant, the relevant part of the order is extracted as under: "Hon'ble Apex Court in judgment cited as Rotork Control India P. Ltd. vs. CIT (2009) 314 ITR 62 settled the issue once for all by holding as under: "The present value of a contingent liability, like the warranty expense, if properly ascertained and discounted on accrual basis can be an item of deduction under section 37 le. It would depend on the nature of the business, the nature of sales, the nature of sales, the nature of the product manu…

Indiabullas Housing Finance Limited, Mumbai vs. DCIT, Central Circle-6(4), Mumbai

ITA 821/MUM/2023[2018-2019]Status: DisposedITAT Mumbai18 Dec 2023AY 2018-2019
For Appellant: Shri K. Gopal &For Respondent: Shri Rakesh Garg
Section 143(1)Section 143(3)Section 14ASection 37(1)

…ited to paragraphs 9.3.1 to 9.3.6 of the order passed by the tribunal and reliance has been placed on decision of the Supreme Court in Bharat Earth Movers v. CIT [2000] 112 Taxman 61/245 ITR 428 (SC), Rotork Controls India (P.) Ltd v. CIT [2009]180 Taxman 422/314 ITR 62 (SC). It is also argued that for the purposes of section 37(1) of the Act, it is sufficient if the expenditure has been incurred and therefore, issuance of shares at a discount were the assessee absorbs the difference between price at which it is issued and the market value of the shares would also be an expenditure incurred for the purpose of sec…

Maquet Medical India Private Limited, Mumbai vs. Deputy Commissioner of Income Tax 10(2)(2), Mumbai

In the result, the appeal of the Revenue is dismissed

ITA 6524/MUM/2017[2012-13]Status: DisposedITAT Mumbai12 Dec 2023AY 2012-13

Bench: Shri Kuldip Singh () & Ms. Padmavathy S. ()

Section 115Section 115O(4)Section 234DSection 250Section 41(1)

…entire amount of provision made that is debited to the P&L A/c of the assessee. The CIT(A) allowed the issue in favour of the assessee by placing reliance on the decision of the Hon'ble Supreme Court in the case of M/s Rotork Control India Pvt. Ltd. Vs. CIT [314 ITR 62 (SC) ] and also the decision of the Co-ordinate Bench in assessee's own case for the AY 2006-07 vide ITA No. 5145/Mum/2011. 21. The ld. DR submitted a details written submission the extract of which given below: “Reasons why provisions should not be allowed as deduction: a. The two conditions for allowability of the claim for provision of the war…

Deputy Commissioner of Income Tax 10(2)(2), Mumbai vs. Maquet Medical India Private Limited, Mumbai

In the result, the appeal of the Revenue is dismissed

ITA 5789/MUM/2017[2012-13]Status: DisposedITAT Mumbai12 Dec 2023AY 2012-13

Bench: Shri Kuldip Singh () & Ms. Padmavathy S. ()

Section 115Section 115O(4)Section 234DSection 250Section 41(1)

…entire amount of provision made that is debited to the P&L A/c of the assessee. The CIT(A) allowed the issue in favour of the assessee by placing reliance on the decision of the Hon'ble Supreme Court in the case of M/s Rotork Control India Pvt. Ltd. Vs. CIT [314 ITR 62 (SC) ] and also the decision of the Co-ordinate Bench in assessee's own case for the AY 2006-07 vide ITA No. 5145/Mum/2011. 21. The ld. DR submitted a details written submission the extract of which given below: “Reasons why provisions should not be allowed as deduction: a. The two conditions for allowability of the claim for provision of the war…

M/S.Pathanmthitta Dist. Co-Op Bank Ltd, Pathanamthitta vs. The DCIT, Thiruvalla

In the result, the appeal filed by the assessee is dismissed as not maintainable and, in any case, without merit

ITA 431/COCH/2018[2014-15]Status: DisposedITAT Cochin12 Dec 2023AY 2014-15

Bench: Shri Sanjay Arora & Shri Manomohan Daspathanamthitta District Dy. Cit, Circle- 1 Co-Op Bank Ltd. Thiruvalla Near Ksrtc Bus Stand Vs. Mylapara Road Pathanamthitta 689645 [Pan:Aabfp9182H] (Appellant) (Respondent)

For Appellant: Shri Aswin Gopakumar, AdvocateFor Respondent: Shri Sanjit Kumar Das, CIT-DR
Section 143(3)

…(2) of the Act). The quantum of provision is to be based on the best available information, and revised at each year-end on the basis of the latest, updated information. The case law in the matter is legion, viz., Rotork Controls India (P.) Ltd. v. CIT [2009] 314 ITR 62 (SC); Bharat Earth Movers Ltd. vs. CIT [2000] 245 ITR428 (SC); Calcutta Co. Ltd. vs. CIT [1959] 37 ITR 1 (SC). Page 3 ITANo. 431/Coch/2018(AY: 2014-15) Pathanamthitta District Co-op Bank Ltd. vs. Dy. CIT 6. Our second observation in the matter is that though the assessee’s Balance Sheet as on 31.03.2014 (copy of which, despite being called for,…

DCIT RG. - 6(3), Mumbai vs. M/S. Kansai Nerolac Paints Ltd., Mumbai

Accordingly we see no infirmity in the decision of CIT(A) and uphold the decision of the CIT(A). This ground of the revenue is dismissed

ITA 4607/MUM/2017[2011-12]Status: DisposedITAT Mumbai04 Dec 2023AY 2011-12

Bench: Shri Amit Shukla () & Ms. Padmavathy S. ()

Section 115Section 143(2)Section 145ASection 35DSection 36(1)(va)Section 40

…ision for warranty. The assessing officer has disallowed the provision made for the relevant year on the ground that it is a contingent liability and the Assessee has not met the following 3 conditions laid down by the Apex Court in Rotork Controls India Ltd. 314 ITR 62 viz. a. An enterprise has a present obligation as a result of past event. b. It is probable that an outflow of resources will be required to settle the obligation and A reliable estimate can be made of the amount of obligation. c. 30. The assessing officer further held that there was no scientific or actuarial basis for the provision by relying u…

M/S. Kansai Nerolac Paints Ltd., Mumbai vs. DCIT RG. - 6(3), Mumbai

Accordingly we see no infirmity in the decision of CIT(A) and uphold the decision of the CIT(A). This ground of the revenue is dismissed

ITA 4562/MUM/2017[2011-12]Status: DisposedITAT Mumbai04 Dec 2023AY 2011-12

Bench: Shri Amit Shukla () & Ms. Padmavathy S. ()

Section 115Section 143(2)Section 145ASection 35DSection 36(1)(va)Section 40

…ision for warranty. The assessing officer has disallowed the provision made for the relevant year on the ground that it is a contingent liability and the Assessee has not met the following 3 conditions laid down by the Apex Court in Rotork Controls India Ltd. 314 ITR 62 viz. a. An enterprise has a present obligation as a result of past event. b. It is probable that an outflow of resources will be required to settle the obligation and A reliable estimate can be made of the amount of obligation. c. 30. The assessing officer further held that there was no scientific or actuarial basis for the provision by relying u…

Kansai Nerolac Paints Ltd, Mumbai vs. DCIT RG 6(2), Mumbai

Accordingly we see no infirmity in the decision of CIT(A) and uphold the decision of the CIT(A). This ground of the revenue is dismissed

ITA 3642/MUM/2016[2010-11]Status: DisposedITAT Mumbai04 Dec 2023AY 2010-11

Bench: Shri Amit Shukla () & Ms. Padmavathy S. ()

Section 115Section 143(2)Section 145ASection 35DSection 36(1)(va)Section 40

…ision for warranty. The assessing officer has disallowed the provision made for the relevant year on the ground that it is a contingent liability and the Assessee has not met the following 3 conditions laid down by the Apex Court in Rotork Controls India Ltd. 314 ITR 62 viz. a. An enterprise has a present obligation as a result of past event. b. It is probable that an outflow of resources will be required to settle the obligation and A reliable estimate can be made of the amount of obligation. c. 30. The assessing officer further held that there was no scientific or actuarial basis for the provision by relying u…

Kansai Nerolac Paints Limited (Erstwhile Known As Goodlass Nerolac Paints Limited), Mumbai vs. Addl. CIT, Range 6 (2), Mumbai

Accordingly we see no infirmity in the decision of CIT(A) and uphold the decision of the CIT(A). This ground of the revenue is dismissed

ITA 3385/MUM/2014[2009-10]Status: DisposedITAT Mumbai04 Dec 2023AY 2009-10

Bench: Shri Amit Shukla () & Ms. Padmavathy S. ()

Section 115Section 143(2)Section 145ASection 35DSection 36(1)(va)Section 40

…ision for warranty. The assessing officer has disallowed the provision made for the relevant year on the ground that it is a contingent liability and the Assessee has not met the following 3 conditions laid down by the Apex Court in Rotork Controls India Ltd. 314 ITR 62 viz. a. An enterprise has a present obligation as a result of past event. b. It is probable that an outflow of resources will be required to settle the obligation and A reliable estimate can be made of the amount of obligation. c. 30. The assessing officer further held that there was no scientific or actuarial basis for the provision by relying u…