DCIT, New Delhi V. M/s Minda Valeo Securities Systems Pvt. Ltd., New Delhi

ITA 2126/DEL/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4221 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 07-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAKHI BIM AL
• Keywords: Tax effect
• Section: 254(2)

Judgement Text

ITA NO.- 2126/DEL/2017 M/S. MINDA VALEO SECURITY SYSTEMS PVT. LTD. PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: E: NEW DELHI) BEFORE SHRI K.N.CHARY, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEM BER ITA NO:- 2126/DEL/2017 ( ASSESSMENT YEAR: 2011-12) D CIT, CENTRAL CIRCLE- 16(2), ROOM NO. 308, NEW DELHI. VS. MINDA VALEO SECURITIES SYSTEMS PVT. LTD. A-15, ASHOK VIHAR PHASE-1 NEW DELHI PAN NO: AAECM0061R APPELLANT RESPONDENT REVENUE BY : MS. RAKHI BIMAL, SR. DR ASSESSEE BY : SH. PULKIT ADVANI, SH. MADHAV KAPUR, SH. DEEPAK GARG, ADVOCATES PER ANADEE NATH MISSHRA, AM (A) THIS APPEAL BY REVENUE IS FILED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 33, NEW DELHI, [LD. CIT(A), FOR SHORT], DATED 27.01.2017 FOR ASSESSMENT YEAR 2011-12. GROUNDS TAKEN IN THIS APP EAL OF REVENUE ARE AS UNDER: 1. WHETHER IN FACTS AND ON CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) IS LEGALLY JUSTIFIED IN DELETING DISALLOWANCE OF EX CESS PROVISION OF WARRANTY EXPENSES OF RS. 95,05,033/- BY IGNORING A FACT THAT EXCESSIVE PROVISION FOR THE WARRANTY EXPENSE WAS NOT MADE ON THE BASIS OF SCIENTIFIC METHOD AND ITA NO.- 2126/DEL/2017 M/S. MINDA VALEO SECURITY SYSTEMS PVT. LTD. PAGE 2 OF 4 NO HISTORICAL TREND WAS KEPT IN MIND AS STIPULATED IN DECISION OF HONBLE SUPREME COURT IN CASE OF ROTORK CONTROLS INDIA PVT. LIMITED VS. {2009} 314 ITR 62 WHICH RESULTED IN UTILIZATION OF ONLY 36 % OF THE PROVISION MADE ? 2. WHETHER IN FACTS AND ON CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) IS LEGALLY JUSTIFIED IN DELETING DISALLOWANCE OF EX CESS PROVISIONS OF WARRANTY EXPENSE OF RS. 95,05,033/- WITHOUT RECORDING ANY R EASON FOR HOLDING THAT RATIO DECIDENDI OF THE DECISION OF HONBLE APEX COU RT IN CASE IN HIS SHORT AND ONE LINE ORDER AT PARAGRAPH 9.4 OF THE IMPUGNED ORDER ? 3. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND, A LTER OR FORGO ANY GROUND(S) OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. (B) AT THE OUTSET, IT WAS BROUGHT TO OUR NOTICE AT THE TIME OF HEARING, BY LEARNED COUNSEL FOR ASSESSEE, THAT TAX EFFECT IN THIS APPEA L IS BELOW RS. 50,00,000/-. VIDE RECENT CBDT CIRCULAR NO. 17/2019 DATED 08.08.2019 R EAD WITH EARLIER CBDT CIRCULAR NO. 3 OF 2018, DATED 11.07.2018, MINIMUM THRESHOLD LIM IT OF TAX EFFECT FOR FILING OF APPEALS BY REVENUE IN INCOME TAX APPELLATE TRIBUNAL (ITAT , FOR SHORT) HAS BEEN ENHANCED TO RS. 50,00,000/-. IN A SUBSEQUENT CLARIFICATION ISS UED BY CBDT VIDE F.NO. 279/MISC/M- 93/2018-ITJ, DATED 20/08/2019, IT HAS BEEN CLARIFIE D BY CBDT THAT THE AFORESAID REVISED MONETARY LIMIT IS ALSO APPLICABLE TO ALL PENDING AP PEALS IN ITAT. IN VIEW OF THE FOREGOING, IT WAS CONTENDED BY LEARNED COUNSEL FOR ASSESSEE, THAT THIS APPEAL IS NOT MAINTAINABLE. LEARNED SENIOR DEPARTMENTAL REPRESEN TATIVE AGREED WITH THIS CONTENTION OF THE LD. COUNSEL FOR ASSESSEE, AND DID NOT PRESS THE APPEAL. THEREFORE, THIS APPEAL IS DISMISSED BEING NOT PRESSED, AND ALSO BEING NOT MAI NTAINABLE HAVING REGARD TO AFORESAID CBDT CIRCULAR NO. 17/2019 DATED 08.08.201 9 READ WITH AFORESAID CBDT CIRCULAR NO. 3 OF 2018 IN THE LIGHT OF AFORESAID CL ARIFICATION DATED 20/08/2019. ITA NO.- 2126/DEL/2017 M/S. MINDA VALEO SECURITY SYSTEMS PVT. LTD. PAGE 3 OF 4 (C) BEFORE LEAVING, WE CLARIFY THAT REVENUE WILL BE AT LIBERTY TO APPROACH INCOME TAX APPELLATE TRIBUNAL U/S 254(2) OF INCOME TAX ACT, 1961 SEEKING RECALL OF THIS ORDER AND, FOR RESTORATION OF THIS A PPEAL IF IT IS FOUND THAT APPEAL OF REVENUE IS NOT COVERED BY AFORESAID CBDT CIRCULA RS DATED 08.08.2019 AND 11.07.2018. (D) IN THE RESULT, THIS APPEAL BY REVENUE IS DISMISSED. OUR DECISION WAS ORALLY PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HE ARING ON THE DATE OF HEARING. NOW, THIS WRITTEN ORDER IS PRONOUNCED IN OPEN COURT ON 2 8/02/2020. SD/- SD/- (K.N.CHARY) (ANADEE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED: 28/02/2020 *BR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA NO.- 2126/DEL/2017 M/S. MINDA VALEO SECURITY SYSTEMS PVT. LTD. PAGE 4 OF 4 DATE OF DICTATION 28/02/2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 28/02/2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER