Income Tax Appellate Tribunal - Chennai
Ashok Leyland John Deere Construction ... vs Dcit Corporate Circle 1(1), Chennai on 7 March, 2019
आयकर अपील य अ धकरण, 'बी' यायपीठ, चे नई
IN THE INCOME TAX APPELLATE TRIBUNAL
'B' BENCH, CHENNAI
ी एन.आर.एस. गणेशन, या यक सद य एवं
ी अ ाहम पी.जॉज&, लेखा सद य केसम)
BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND
SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER
आयकर अपील सं./ITA No.2131/Chny/2018
नधा&रण वष& /Assessment Year : 2013-14
M/s Ashok Leyland John Deere
Construction Equipment Co. Pvt. The Deputy Commissioner of
Ltd., AG-1, "Ragamallige", v. Income Tax,
No.26, Kumaran Colony Corporate Circle - 1(1),
Main Road, Vadapalani, Chennai - 600 034.
Chennai - 600 026.
PAN : AAHCA 8691 F
(अपीलाथ./Appellant) (/0यथ./Respondent)
अपीलाथ. क1 ओर से / Appellant by : None
/0यथ. क1 ओरसे / Respondent by : Shri Homi Rajvansh, CIT
सन
ु वाई क1 तार ख/Date of Hearing : 12.02.2019
घोषणा क1 तार ख/Date of Pronouncement : 07.03.2019
आदे श /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) -4, Chennai, dated 07.05.2018 and pertains to assessment year 2013-14.
2 I.T.A. No.2131/Chny/18
2. This appeal of the assessee was posted on 02.01.2019. At the request of the Ld.counsel for the assessee, it was adjourned to 12.02.2019. The Ld.counsel has taken note of the date of hearing by making endorsement on the file. When the appeal was taken up for hearing on 12.02.2019, no one appeared for the assessee inspite of the fact that the Ld.counsel has taken note of the date of haring. Therefore, we heard the Ld. Departmental Representative and proceeded to dispose the appeal on merit.
3. The only issue arises for consideration is with regard to disallowance of ₹12,18,62,854/-.
4. Shri Homi Rajvansh, the Ld. Departmental Representative, submitted that the assessee claimed incentive to dealers to the extent of ₹5,10,91,256/-, marketing and sales promotion expenses to the extent of ₹1,62,62,822/-, sales commission expenses to the extent of ₹3,24,99,000/- and Produce Improvement Programme to the extent of ₹2,20,09,776/-. Thus, the total expenditure claimed by the assessee comes to ₹12,18,62,854/-. According to the Ld. D.R., the assessee explained before the Assessing Officer that it is a provision for warranty expenses. The Assessing Officer found that there is a difference between warranty expenses and other expenses claimed by the assessee. According to the Ld. D.R., a provision is a liability which can be measured only by scientific method of estimation. According to the 3 I.T.A. No.2131/Chny/18 Ld. D.R., the assessee may have an obligation as a result of past events. However, the assessee has not established the obligation on the basis of past events, therefore, according to the Ld. D.R., the condition required for allowing the provision is not satisfied. Moreover, the expenses were not estimated on the basis of scientific evaluation of past expenditure. The Ld. D.R. further clarified that the provision created by the assessee is in respect of future obligation and not with regard to current liability. Referring to the order of the CIT(Appeals), the Ld. D.R. submitted that no material was produced by the assessee either before the Assessing Officer or before the CIT(Appeals). Even before this Tribunal, the assessee has not appeared even though the date of hearing was taken note of. Moreover, according to the Ld. D.R., no material is produced before this Tribunal also.
5. We heard the Ld. Departmental Representative and perused the relevant material available on record. The Assessing Officer found that the provision was created in respect of future obligation and not current liability. Moreover, no material is available on record to indicate that the provision was estimated on the basis of the past experience by way of scientific reasons. Moreover, no material is available on record to indicate that the assessee incurred the expenditure to the extent of estimation. Therefore, this Tribunal do not find any reason to interfere 4 I.T.A. No.2131/Chny/18 with the order of the lower authority and accordingly the same is confirmed.
6. In the result, the appeal filed by the assessee is dismissed.
Order pronounced in the court on 7th March, 2019 at Chennai.
sd/- sd/-
(अ ाहमपी.जॉज&) (एन.आर.एस. गणेशन)
(Abraham P. George) (N.R.S. Ganesan)
लेखा सद य/Accountant Member या यक सद य/Judicial Member
चे नई/Chennai,
8दनांक/Dated, the 7th March, 2019.
Kri.
आदे श क1 / त9ल:प अ;े:षत/Copy to:
1. अपीलाथ./Appellant 2. /0यथ./Respondent
3. आयकर आयु<त (अपील)/CIT(A)-4, Chennai-34
4. Principal CIT, Chennai-1, Chennai
5. :वभागीय / त न ध/DR 6. गाड& फाईल/GF.