9911796707
TMI Blog2013 (10) TMI 1225X X X X Extracts X X X X X X X X Extracts X X X X ..... r. The assessee claimed amounts spent towards amount as revenue expenditure. It also sought relief in respect of provision made for doubtful debts under section 115JA(ii) of the Income-tax Act, 1961 (for short, "the Act"). Further, the assessee contended, in the absence of any liability under section 115JA, there is no liability to pay advance tax and, consequently, no interest is payable under section 234B of the Act. The assessing authority overruling all those contentions framed an assessment order. Aggrieved by the same, the assessee preferred an appeal. The appellate authority/Commissioner of Income-tax (Appeals), dismissed the appeal. Aggrieved by the same, the assessee preferred an appeal before the Tribunal which granted relief on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as revenue expenditure. The Tribunal held the liability to pay for warranty claims arises no sooner the sale are effected. The assessee has provided for liability on the basis of sales made during the year. Though the exact amount cannot be quantified, however, the sum is based on the scientific approach and based on the past experience and, therefore, reliance is placed on the judgment of various High Courts, which directed of the deletion of Rs. 4,92,69,808. 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. Ltd. v. CIT reported in [2009] 314 ITR 62 (SC). Such a relief is permissible only if the condition set out in the said judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such repairs and replacement arises as a result of the contracts of sale that it enters into as this event takes place during the year of the liability is an accrued liability and, hence, has to be allowed as a deduction. Relying on the said finding, the Tribunal also held though the exact amount cannot be quantified, the same is based on scientific approach and the past experience. Once the warranty liability is based on a scientific calculation, the assessee is entitled to deduction under section 37 of the Income-tax Act. 8. In the light of the aforesaid facts, we are of the view that the finding recorded by the Tribunal as well as the first appellate court is based on evidence on records and once the condition stipulated in the apex cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his business operation efficiently and smoothly. However, such software itself does not work on standalone basis. The same has to be fitted to a computer system to work. Such software enhances the efficiency of the operation. It is an aid in manufacturing process rather than the tool itself. Thus, for payment of such application software, though there is an enduring benefit, it does not result into acquisition of any capital asset. The same merely enhances the productivity or efficiency and, hence, to be treated as revenue expenditure. In fact, this court had an occasion to consider whether the software expenses is allowable as revenue expenses or not and held, when the life of a computer or software is less than two years and as such, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is for unascertained liabilities. Since it was merely a provision for unascertained liabilities and as per clause (c) of section 115JA(ii), the same cannot be reduced while computing the "book profit" under section 115JA of the Act. The said view was accepted by the first appellate authority. However, the Tribunal held that the amount being provision made for bad and doubtful debts cannot be considered as provision for meeting any liability, which is not ascertained liabilities and, hence, "book profit" is not to be increased for such amount provided for. This court had an occasion to consider this question in the case of CIT v. Weizmann Homes Ltd. in I. T. A. No. 918/2006 and connected matters decided on March 4, 2013-since reported in [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the pre-requisite condition for the applicability of section 234B is that the assessee is liable to pay tax under section 208 and the expression "assessed tax" is defined to mean the tax on the total income determined under section 143(1) or under section 143(3) as reduced by the amount of tax deducted or collected at source. Thus, there is no exclusion of section 115J/115JA in the levy of interest under section 234B. The expression "assessed tax" is defined to mean the tax assessed on regular assessment which means the tax determined on the application of section 115J/ 115JA in the regular assessment. Thus, it can be concluded that interest under sections 234B and 234C shall be payable on failure to pay advance tax in respect of tax payab ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
