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TMI Blog2015 (6) TMI 1126X X X X Extracts X X X X X X X X Extracts X X X X ..... disposed off by this common order for the sake of convenience. 2. The first common ground taken in these appeals is with regard to deletion of disallowance made by the Assessing Officer in respect of provision for warranty without examining the facts of the case. 3. Since facts are common in all these appeals, we consider the facts as narrated in assessment year 1998-99. The assessee claimed a sum of Rs. 3,15,93,392/- as product warranty expenses. The assessee stated that the company extends a one year warranty for all its products. The expenses shown under the head product warranty expenses are relating to the vehicle sold during the period April to March. The warranty expenses comprises of a significant portion of expenses actually incu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he issue is squarely covered in favour of the assessee by the decision of the Tribunal in assessee's own case, wherein the Tribunal considered the issue and observed as under 4: "4. At the time of hearing, it was brought to the notice of the Bench that the above decision has been reversed by the Hon'ble Supreme Court by its decision reported in 223 CTR 425 which is also reported in 23 DTR 79, by holding as under: "A provision is a liability which can be measured only by using a substantial degree of estimation. A provision is recognized 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 estimate can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at deletion of warranty is valid in this assessment year and there is no addition sustained in respect of warranty, there is no necessity of reopening and ground relating to reopening is only academic. Accordingly, the same is dismissed as infructuous. 7. The next ground in ITA No.2979/Mds/14 is that the CIT(A) erred in deleting the addition made by Assessing Officer being 5% of the dealer concession and incentives of Rs. 1,04,63,000/-. The AO disallowed 5% of the expenditure towards dealer concession and incentive as the assessee has not produced any details. However, the CIT(Appeals) deleted the addition by observing that no ad-hoc disallowance is possible. 8. We have heard both the sides and perused the material on record. When the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04-05, the same was received in this office on 18.12.2006. Under the provisions of Sec.92 CA(4) , the assessee had to be given an opportunity of being heard. The Transfer Pricing Officer in his above referred order has determined that the total income of the assessee requires an upward adjustments to the extent of Rs. 44,66,883. In view of this, a show cause letter was issued on 20.12.2006 requiring the assessee as to why this total income should not be upwardly adjusted by Rs. 44,66,883. The case was posted for hearing to 26.12.2006 at 2p.m. No one appeared for the hearing. When the Inspector of Income-tax, contacted the assessee's office, it was informed that the whole company is closed for holiday and it will be reopened only on 3rd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .AR, observed that the AO has tried to obtain the comments of the assessee on the TPO's order on upward adjustment of the value through his letter dated 20.12.06 and made subsequent efforts. On not receiving any response from the assessee, the AO has adopted the revised figure of the TPO and made the addition of Rs. 44,66,883. The AO therefore cannot be found fault with and he has not offered sufficient opportunity to explain the revised estimate of the TPO. According to him, the argument of the ld. AR was not accommodated and still remained as unanswered. To meet the ends of justice, he directed the AO to give the assessee an opportunity to submit its explanation and decide the issue on merits. 12. We have heard both the parties and p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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