9911796707
TMI Blog2012 (1) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... der of the Learned CIT (Appeals), in so far as it is prejudicial to the interest of revenue, is opposed to law and the facts and circumstances of the case. 2. The learned CIT (A) has erred in deleting the addition amounting to ₹ 1,42,01,453-00 made on account of disallowance of provision of warranty debited to P & L Account, without appreciating the facts and circumstances under which the disallowance was made by the Assessing Officer. 3. The learned CIT(A) has erred in allowing the relief based on the submissions/details filed by the assessee during the course of appellate proceedings without giving an opportunity to the Assessing Officer to verify the genuineness of the same. 4. The learned CIT(A) has erred in allowing reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,42,01,453. The AO asked the assessee to file its objection, if any, for disallowing the same. The assessee submitted as under: "As explained to you the Institute of Chartered Accountants of India have prescribed a new Accounting Standard (AS 29) by which the warranty liability has to be recognised at the time of sale and provision has to be made at the year end on the sale affected during that year based on the past trend. Based on that year sale, the warranty provision @ 4% has to be made. After adjusting the settlement the difference between the provision and settlement, the provision in that year aggregating to ₹ 1,42,01,453/- has to be made. To substantiate our claim we enclose the statement of warranty settlement durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 01.12.2009 for the A.Y. 2005-06. The relevant observations of the ld. CIT(A) as mentioned in para 6 of the impugned order reads as under: "6. The cited case laws as well as the facts supplied are examined. I find these case laws have not given a verdict that provisions for warranty as such appearing in the P & L A/c be allowed as a deduction. It has been enunciated in these case laws that provision means a contingent present liability for incurring future expenses. Therefore, in order to get the status of deduction, it has to pass through a rigorous test. Such test must be based on past experience, historical data and scientific procedure. In toto, it is an analysis and research on the facts of each case to arrive at a fair degree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal. During the course of hearing, the ld. counsel for the assessee at the very outset stated that this issue is squarely covered in favour of the assessee by the earlier decision of the ITAT, Bangalore Bench "A" in the assessee's own case in ITA No.142/Bang/2010 for the A.Y. 2005-06 vide order dated 21.03.2011. Copy of the said order was furnished. 9. In her rival submissions, the ld. DR although supported the order of the AO, but could not controvert the aforesaid contention of the ld. counsel for the assessee. 10. After considering the submissions of both the parties and material available on record, it is noticed that the ld. CIT(A) while deleting the addition for the year under consideration has followed his earlier order for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der of the Tribunal dated 21.03.2011 in the assessee's own case in ITA No.142/Bang/2010 for the A.Y. 2005-06, we do not see any merit in this appeal of the department. 12. As regards to the cross objection by the assessee is concerned, the ld. counsel for the assessee was fair enough to admit that no specific relief is sought in the said cross objection, but only the order passed by the ld. CIT(A) has been supported. Since in the former part of this order, we have dismissed the appeal of the department and the view expressed by the ld. CIT(A) has been upheld, therefore this cross objection supporting the order of the ld. CIT(A) becomes infructuous. We order accordingly. 13. In the result, the appeal of the department is dismissed and the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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