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TMI Blog2017 (9) TMI 2040X X X X Extracts X X X X X X X X Extracts X X X X ..... resent 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 made of the amount of the obligation. If these conditions are not met, no provision can be recognized. This principle is that if the historical trend indicated that a large number of sophisticated goods were being manufactured in the past and the facts show that defects existed in some of the items manufactured and sold, then provision made for warranty in respect of such sophisticated goods would be entitled to deduction from the gross receipts u/s 37 - Decided in favour of assessee. Disallowance on account of employees contribution to provident fund - amount claimed was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able being contingent/unascertainable liability? 2. Whether the Tribunal was legally justified in deleting the disallowance of Rs. 3,39,38290/- made on account of employees contribution to provident fund specifically when the amount claimed was not deposited in prescribed time thus being contrary to the provisions of section 43B and 36(1)(va), 2(24)(x). In DBITA No. 75/2015 1. Whether the Tribunal was legally justified in deleting the disallowance of Rs. 83,74,416/- provided for contractual obligation in the return which was not allowable being contingent/unascertainable liability? 2. Whether the Tribunal was legally justified in deleting the disallowance of Rs. 7,57,32,300/- made on account of employees contribution to provident fund speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l was legally justified in deleting the disallowance of Rs. 6,45,57,068/- made on account of employees contribution to provident fund specifically when the amount claimed was not deposited in prescribed time thus being contrary to the provisions of section 43B and 36(1)(va), 2(24)(x). 4. Counsel for the appellant contended that the matters are now covered by the decision of Supreme Court in case of Rotork Controls India P. Ltd. vs. Commissioner of Income Tax reported in [2009] 314 ITR 62 (SC) wherein it has been held as under:- Held, reversing the decision of the High Court, that the value actuators, manufactured by the assessee, were sophisticated goods and statistical data indicated that every year some of these were found defective; that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made of the amount of the obligation. If these conditions are not met, no provision can be recognized. This principle is that if the historical trend indicated that a large number of sophisticated goods were being manufactured in the past and the facts show that defects existed in some of the items manufactured and sold, then provision made for warranty in respect of such sophisticated goods would be entitled to deduction from the gross receipts under section 37. 5. The second issue is covered in view of the decision of this Court in Tax Appeal No. 61/2012 (Commissioner of Income Tax, Kota vs. M/s Instrumentation Limited, Jhalawar Road, Kota) decided on 24th August, 2017 wherein it has been held as under:- 4. Counsel for the appellant cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of filing of the return. We therefore, hold that the ld. CIT(A) was justified in deleting the Employers P.F. Contribution and Employees P.F. Contribution. 7. In other appeal, (68/2012) in Paragraph 5 which reads as under:- As per audit report the total employees contribution to provident fund is Rs.8,95,28,233/-. Out of this amount of Rs.6,65,74,815/- have not been paid and amount of Rs.1,40,62,629/- have been paid after prescribed time/due date. Therefore, this amount of Rs.8,06,37,444/- should have been added while computing the income/loss, whereas the assessee has added in computation an amount of Rs.6,65,74,815/- only on the account. Hence the balance amount of Rs.1,40,62,629/- is added to the income of the assessee due to the no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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