9911796707
TMI Blog2021 (5) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer under the head after sales costs. Thereby it clearly shows appellant Revenue has given effect of the order of the Tribunal in assessee‟s own case from assessment year 1998-99 and allowed the claim of the assessee. We find the latest order being passed by the Tribunal for the assessment year 2011-12 wherein we find similar grounds were raised by the Revenue against the order of the Ld. CIT(Appeals) and this Tribunal did not interfere with the findings of the Ld. CIT(Appeals) in allowing the claim of the assessee. - Decided against revenue. Disallowance u/s 14A - HELD THAT:- Admittedly the fact remains undisputed that there was no exempt income earned by the assessee. It is a settled principle that no disallowance could be made u/s.14A of the Act when there is no exempt income - we are of the considered view that since the assessee did not received any exempted income against the investment made; no disallowance u/s.14A is warranted. - Decided in favour of assessee. - ITA No. 246/PUN/2018, CO. No. 04/PUN/2021 (Arising out of ITA No.246/PUN/2018) - - - Dated:- 7-5-2021 - Shri R.S.Syal, Vice President And Shri S.S. Viswanethra Ravi, Judicial Member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which were reproduced by the Assessing Officer in his order. According to the Assessing Officer, the assessee failed to substantiate that an obligation was ever cast on the date of sale and no liability accrued. He held that the assessee is not entitled to claim deduction in respect of provision made towards after sales costs and added the same to the total income of the assessee. 8. Being aggrieved the assessee preferred an appeal before the Ld. CIT(Appeals) and filed written submissions in its support. The contention of the assessee before the Ld. CIT(Appeals) was that the provisions for after sales costs is made on a consistent, scientific and systematic basis over a period years and were allowable as expenditure. The assessee placed reliance on the decision of the Hon‟ble Supreme Court in the case of Rotork Controls India Limited reported in 314 ITR 62 and contended that the determined liability on a scientific basis could not be regarded as a contingent liability and the provision made should be allowed u/s.37 of the Income Tax Act, 1961 (hereinafter referred to as the Act‟). The assessee also contended that the same provision is upheld by the Tribunal in asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ranty, but however, considering the disallowances concerning the said expenditure in earlier assessment years disallowed in the year under consideration. Likewise an amount of ₹ 3,62,000/- on account of provision of after sales cost the AO disallowed the same since the appeals are pending of earlier years by the assessee filed against the same disallowances made. We note that the AO disallowed an amount of ₹ 73,23,000/- and ₹ 3,62,000/- only on account of the appeals of earlier years are pending. The CIT(A) by placing reliance on the orders of ITAT deleted the addition made by the AO. The relevant portion of para 5.2 of CIT(A) is reproduced here-in-below: 5.2 I have carefully perused the submissions of the appellant as well as the findings of the AO. The appellant has relied upon the decision of Rotork Controls India Pvt. Ltd. (supra) wherein Hon'ble Apex Court has held that where warranty is attached to the sale of a product, the provision gets attached thereby, and that liability then becomes ascertainable which is allowable. The appellant has also stated that consistent view has been taken by the Hon'ble Tribunal, Mumbai, in its own case, spanned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n confirming the disallowance made by the Assessing Officer u/s.14A r.w.r.8D(2) of the Income Tax Rules, 1962 ( hereinafter referred to as the Rules‟). 14. Heard both the parties and perused the materials available on record. According to the Assessing Officer, the assessee made investment of ₹ 12.98 Crores in Sulzer Chemtech Towerfield Services Pvt. Ltd. in the year 2009. Further, in order to acquire 100% subsidiary, the assessee made further investment ₹ 7.64 Crores during the year under consideration. The assessee requested to give his stand as to why expenditure incurred with respect to the investment made in the year under consideration should not be disallowed. We note that it was substantiated no dividend has been received against the investment towards any capital gains during the year under consideration. The Assessing Officer did not accept the same and proceeded to compute the expenditure that may have incurred for making investment by invoking Rule 8D(2) of the Rules and disallowed the sum of ₹ 18,25,952/- under Rule 8D(2)(ii) and sum of ₹ 8,40,066/- under Rule 8D(2)(iii) of the Rules. 15. Having aggrieved, the assessee f ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
