M/s ABS India Pvt. Limited, Bangalore V. DCIT, Bangalore

ITA 224/BANG/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63753 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 16-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNDAR RAJAN
• Keywords: Capital expenditure
• Section: 143(3); 234B; 14A; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH C BEFORE SHRI GEORGE GEORGE K, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER I.T.A. NO. 224 /BANG/20 12 (ASSESSMENT YEAR : 2008-09) M/S. ABS INDIA PVT. LTD., NO.49, 100 FEET ROAD, 4 TH BLOCK, KORAMANGALA, BANGALORE. PAN NO.AABCA 8841P VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE 11(1), BANGALORE. APPELLANT RESPONDENT. APPELLANT BY : SHRI RAGHAVENDRA CHAKRAVARTHY. RESPONDENT BY : SHRI SUNDAR RAJAN. DATE OF HEARING : 15.10.2012. DATE OF PRONOUNCEMENT : 19.10.2012. O R D E R PER SHRI JASON P. BOAZ : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, BANGALORE DT.25.11.2011 FOR ASSESSMENT YEAR 2008-09. 2. THE FACTS OF THE CASE, IN BRIEF, ARE AS UNDER : 2.1 THE ASSESSEE, A COMPANY ENGAGED IN THE BUSINESS OF TRADING, SERVICE AND MAINTENANCE OF TELECOMMUNICATION PRODUCTS, FILED ITS RETURN OF INC OME FOR ASSESSMENT YEAR 2008-09 ON 27.9.2008 DECLARING INCOME OF RS.3,87,94,384. THE CASE WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS 'THE ACT') AND SUBSEQUENTLY TAKEN UP FOR SCRUTINY. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT BY AN ORDER UNDER SECTION 2 ITA NO.224/BANG/12 143(3) OF THE ACT ON 20.10.2010 DETERMINING THE INC OME OF THE ASSESSEE AT RS.4,42,47,344 MAKING THE FOLLOWING DISALLOWANCES / ADDITIONS TO T HE RETURNED INCOME. I) CAPITAL EXPENDITURE RS.75,000 II) DISALLOWANCE UNDER SECTION 14A RS.1,44,960 III) PROVISION FOR WARRANTY RS.52,33,000 2.2 AGGRIEVED WITH THE ORDER OF ASSESSMENT FOR ASSE SSMENT YEAR 2008-09 DT.20.10.2010, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT (APPEALS ) WHO DISMISSED THE ASSESSEE'S APPEAL BY ORDER DT.25.11.2011. 3. AGGRIEVED BY THE ORDER OF THE CIT (APPEALS) DT.2 5.11.2011, THE ASSESSEE IS NOW IN APPEAL BEFORE US. IN THE GROUNDS RAISED IN THIS APPEAL, W HICH ARE EXTRACTED HEREUNDER, IT HAS BEEN CONTENDED THAT : 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS THEY ARE AGAINST THE APPELLANT ARE OPPOSED TO LAW, EQUITY, WEIGHT OF EVIDENCE, PRO BABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT (APPEALS) IS NOT JUSTIFIED IN U PHOLDING THE ADDITION OF RS.52,33,000 BEING THE PROVISION FOR WARRANTY DEBIT ED TO THE PROFIT AND LOSS ACCOUNT FOR THE YEAR UNDER APPEAL UNDER THE FACTS A ND CIRCUMSTANCES OF THE APPELLANTS CASE. 2.1 THE LEARNED CIT (APPEALS) FAILED TO APPRECI ATE THAT THE EXTENT OF WARRANTY PROVIDED BY THE APPELLANT WAS BASED ON SCIENTIFIC A ND RATIONALE BASIS HAVING REGARD TO THE PAST EXPERIENCE AND THEREFORE, THE SAME WAS ALLOWABLE HAVING REGARD TO THE RATIO OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ROTORK CONTROLS INDIA PVT LTD REPORTED IN 314 ITR 62 (SC). 3. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER WITH THE HON'BLE CCIT/DG, THE APPELLANT DENIES ITSELF LIABLE TO BE CHARGED TO INT EREST UNDER SECTION 234B OF THE ACT, WHICH UNDER THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE DESERVES TO BE CANCELLED. 4. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE UR GED AT THE TIME OF HAVING OF THE APPEAL, YOUR APPELLANT HUMBLY PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLANT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO ORDER FOR THE REFUND OF THE INSTITUTION FEES AS PAR T OF THE COSTS. 3 ITA NO.224/BANG/12 4.0 THE GROUNDS AT S.NOS.1 AND 4 ARE GENERAL IN NATURE AND THEREFORE NO ADJUDICATIO N IS CALLED FOR THEREON. 5.0 THE GROUNDS RAISED AT S.NO. 3 CHALLENGES THE CHARGING OF INTEREST UNDER SECTION 234B OF THE ACT. THE CHARGING OF INTEREST IS CONSEQUENT IAL AND MANDATORY AND THE ASSESSING OFFICER HAS NO DISCRETION IN THE MATTER AND THEREFO RE HIS ACTION IN DOING SO IS IN ORDER. THE ASSESSING OFFICER IS, HOWEVER, DIRECTED TO RECOMPUT E THE INTEREST CHARGEABLE UNDER SECTION 234B OF THE ACT, IF ANY, WHILE GIVING EFFECT TO THI S ORDER. 6.1 THE ONLY ISSUE FOR ADJUDICATION IN THIS APPEAL IN THE GROUND RAISED AT S.NOS.2 AND 2.1 WHICH DEALS WITH THE DISALLOWANCE OF THE PROVISION FOR WARRANTY AMOUNTING TO RS. 52,33,000. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESS ING OFFICER NOTICED THAT IN THE RELEVANT PERIOD THE ASSESSEE HAD CLAIMED EXPENDITURE OF RS. 52,33,000 BEING PROVISION FOR WARRANTY. HE WAS OF THE VIEW THAT THE ASSESSEE WAS NOT FOLLOW ING ANY SCIENTIFIC METHOD OF DEBITING THE EXPENDITURE TOWARDS WARRANTY AND ACCORDINGLY DISALL OWED THE SAME. 6.2 IN APPEAL, THE LEARNED CIT (APPEALS) AFTER CONS IDERING THE SUBMISSIONS OF THE ASSESSEE CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY OB SERVING THAT THOUGH THE ASSESSEE HAD PROVIDED FOR WARRANTY EXPENSES FOR EARLIER YEARS A LSO, THE PROVISION WAS FOUND TO BE UNREASONABLE, EXCESSIVE AND NOT COMMENSURATE WITH T HE ACTUAL EXPENDITURE INCURRED; AND THE STATISTICS IS NOT BASED ON SCIENTIFIC ANALYSIS OF E ITHER PAST OR PRESENT ACCOUNTS BECAUSE THE REVERSAL IS NOT DONE ON THE BASIS OF ACTUAL EXPENDI TURE INCURRED AGAINST THE PROVISION MADE. 6.3 IN THE COURSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT AN IDENTICAL ISSUE HAVING SIMILAR FACTS HAS AL READY BEEN DECIDED IN THE ASSESSEE'S FAAVOUR 4 ITA NO.224/BANG/12 BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE AS SESSEE'S OWN CASE FOR ASSESSMENT YEAR 2006-07 IN ITA NO.440/BANG/2011 DT.12.6.2012 FOLLOW ING ITS OWN ORDER IN THE ASSESSEE'S CASE IN ITA NO.586/BANG/2006 DT.8.6.2007 FOR ASSESSMENT YEAR 2000-01. A COPY OF THE CITED ORDER (SUPRA) HAS BEEN PLACED ON RECORD. 6.4 THE LEARNED DEPARTMENTAL REPRESENTATIVE ON HIS PART SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW, BUT FAIRLY AGREED THAT THIS ISSU E WAS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF A CO-ORDINATE BENCH OF THIS TRIBUNA L IN THE ASSESSEE'S OWN CASE IN ITA NO.440/BANG/2011 DT.12.6.2012 FOR ASSESSMENT YEAR 2006-07 (SUPRA). 6.5 WE HAVE HEARD BOTH PARTIES AND CAREFULLY PERUSE D AND CONSIDERED THE MATERIAL ON RECORD. WE FIND THAT AN IDENTICAL ISSUE HAVING SIM ILAR FACTS HAD ALREADY BEEN ADJUDICATED BY A CO-ORDINATE BENCH OF THIS TRIBUNAL IN ITA NO.586/BA NG/2006 DT.8.6.2007 IN THE ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR 2000-01 WHEREIN THE IS SUE WAS ADJUDICATED IN FAVOUR OF THE ASSESSEE. THE RELEVANT FINDINGS ARE AT PARAS 7 TO 7.6 OF THE SAID ORDER WHICH ARE EXTRACTED HEREUNDER : 7. WE HAVE HEARD BOTH THE PARTIES. THIS BENCH IN T HE CASE OF WIPRO GE MEDICAL SYSTEMS LTD. (SUPRA) HAS CONSIDERED THE ALLOWABILIT Y OF PROVISION FOR WARRANTY. IN THAT CASE, PROVISION WAS MADE AS A FIXED PERCENTAGE OF SALES THOUGH SUCH PERCENTAGE VARIED FOR DIFFERENT PRODUCTS. THE PROVI SION FOR WARRANTY IN THE CASE OF WIPRO WAS MADE ON SCIENTIFIC BASIS BASED ON PAST EX PERIENCE. THE TRIBUNAL IN THAT CASE HELD AS UNDER:- WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND GONE THROUGH THE RECORDS. THE BOMBAY BENCH OF THE TRIBUNAL IN THE CASE OF VOL TAS LTD. V DY. CIT (SUPRA) WAS CONCERNED WITH AN IDENTICAL SITUATION WHERE THE PRO VISION FOR TRADE GUARANTEES DURING THE WARRANTY PERIOD IN CASE OF THE ASSESSEE HAVING SCIENTIFICALLY WORKED OUT THE ANTICIPATED THE LIABILITIES TO BE PROVIDED UNDE R MERCANTILE SYSTEM OF ACCOUNTING BASED ON THE PAST EXPERIENCE AND IN SUCH A METHOD O F ACCOUNTING BASED ON THE PAST EXPERIENCE AND IN SUCH A METHOD OF ACCOUNTING, NO A DHOCISM IS INVOLVED THE 5 ITA NO.224/BANG/12 ACCOUNTING METHOD FOLLOWED BY THE ASSESSEE ENSURES THAT THE GAPS BETWEEN THE PROVISION AND THE ACTUAL EXPENDITURE ARE MADE GOOD IN SUBSEQUENT YEARS. IN THOSE CIRCUMSTANCES, THE DISALLOWANCE WAS NOT HELD TO BE JUSTIFIED. SIMILARLY, IN THE CASE OF JAY BEE INDUSTRIES V DCIT (SUPRA), THE TRIBUNAL HELD THEREIN THAT THE PROVISION FOR EXPENDITURE ON REPLACEMENT DURING THE WARRANTY PERIOD IS BASED ON AN ESTIMATED COST OF REPAIRS AT 2 PER CENT OF TRANSFOR MERS SOLD. THE METHOD OF ESTIMATING THE COST OF REPAIRS WAS HELD TO BE ALLOW ABLE ON THE GROUND THAT THE LIABILITY TO CARRY OUT REPAIRS/REPLACEMENT ACCRUED ON THE DATE OF SALE AGREEMENT. SUCH ESTIMATED LIABILITIES ARE TO BE TREATED AS TRA DING EXPENSES AND MUST BE ALLOWED THE REVENUE IN THIS CASE SHOULD HAVE ACCEPT ED THE ASSESSEES CLAIM AS FOLLOWING THE METHOD OF ACCOUNTING AND AS SHOWN THE BASIS FOR MAKING SUCH CLAIMS. THE ASSESSEE HAS PROVIDED A MEAGER PERCENTAGE OF SA LES AS PROVISION FOR WARRANTY CLAIM DURING THE PERIOD FOR WHICH THE ASSESSEE HAS PRODUCED THE DETAILS OF WARRANTY CLAIMS. THE CLAIM SHOWS THAT THE WARRANTY EXPENSES CLAIMED AS DEDUCTION IS NOT ABNORMALLY HIGH AND THE GAP BETWEEN THE WARR ANTY PROVISIONS AND THE WARRANT EXPENDITURE INCURRED HAVE NARROWED DOWN OVER YEARS AND IN FACT, THE DETAILED STUDY OF THESE EXPENSES CLEARLY SHOWS THAT THERE IS A PER FECT NEUTRALIZATION BETWEEN THE EXPENDITURE INCURRED AND THE WARRANTY CLAIMS CLAIME D AS DEDUCTION. IN OUR VIEW, THE WARRANTY LIABILITIES ARE INBUILT IN THE SALE PRICE SINCE ALL SALES ARE WITH WARRANTY LIABILITIES. THE LIABILITY TOWARDS WARRANTY LIABILI TIES IS CERTAIN AND HAS ACCRUED ON THE DATE OF SALE AND ONLY THE ASCERTAINMENT COULD BE SA ID TO BE CONTINGENT WHICH THE ASSESSEE HAS ESTIMATED BASED ON ITS PAST EXPERIENCE AND IN OUR OPINION, THE CLAIMS MADE BY THE ASSESSEE IN THIS REGARD ARE MOST REASON ABLE AND ARE SUPPORTED BY SOME PLAUSIBLE MATERIAL. IN OUR VIEW, THE DEPARTMENT IS NOT JUSTIFIED IN TREATING THE LIABILITY AS CONTINGENT. FOLLOWING THE PRINCIPLE LA ID DOWN BY SEVERAL DECISIONS OF THE TRIBUNAL INCLUDING THAT OF THE APEX COURT IN (1969) 73 ITR 53 (SC) (SUPRA) WE HOLD THAT THE CLAIM OF THE ASSESSEE IS IN ORDER AND SHOU LD BE ACCEPTED. THE AO SHALL ENSURE THAT THE ASSESSEE SHALL NOT CLAIM THE DEDUCT ION AGAIN BASED ON THE EXPENDITURE IN RESPECT OF WARRANTY AND AFTER SALES IN THE BOOKS OF ACCOUNT MAINTAINED. WITH THESE OBSERVATIONS, THE ASSESSEE S GROUND ON THIS ISSUE IS TO BE TREATED AS ALLOWED. 7.1 THE ABOVE REFERRED ISSUE HAS AGAIN BEEN CONSIDE RED BY THIS BENCH IN THE CASE OF IBM INDIA LTD. V CIT (290 ITR 183) (AT). IN THIS CASE, THE COUNSEL APPEARING FOR THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING DECIS IONS:- - CIT V BEEMA MFRS. (P) LTD. (130 TAXMAN 400)(MAD.) - CIT V INDIAN TRANSFORMERS LTD. (270 ITR 259)(KER. ) - CIT V VINTEC CORPORATION LTD. (278 ITR 337) (DELH I) - VOLTAS LTD. V DCIT (64 ITD 232) (MUM.) - ITO V WANSON (INDIA) LTD. (5 ITD 102)(PUNE) - JAY BE INDUSTRIES V DCIT (66 ITD 530) (ASR.) 6 ITA NO.224/BANG/12 THIS BENCH AFTER CONSIDERING THE DECISIONS QUOTED B Y THE LEARNED AR, HELD AS UNDER:- WE HAVE CAREFULLY CONSIDERED THE RELEVANT FACTS AN D THE ARGUMENTS ADVANCED. THE ONLY REASON TO DISALLOW THE SUM IS THAT THE LIABILI TY IS A CONTINGENT LIABILITY AND NOT AN ACCRUED LIABILITY. WE ARE UNABLE TO ACCEPT THE C ONTENTION. THE LIABILITY TO PAY FOR WARRANTY CLAIMS ARISES NO SOONER THE SALES ARE EFFE CTED. THE APPELLANT HAS PROVIDED FOR LIABILITY ON THE BASIS OF SALES MADE DURING THE YEAR. THOUGH THE EXACT AMOUNT CANNOT BE QUANTIFIED, HOWEVER, THE SUM IS BASED ON THE SCIENTIFIC APPROACH AND BASED ON PAST EXPERIENCE. VARIOUS HIGH COURTS RELIE D BY LEARNED COUNSEL FOR ASSESSEE HAS HELD THAT THE LIABILITY IN RESPECT OF SUCH WARRANTY CLAIMS IS NOT A CONTINGENT LIABILITY BUT AN ACCRUED LIABILITY. THE ITAT, BANGALORE IN THE CASE OF MOTOR INDUSTRIES CO. LTD. IN ITA NOS.396 TO 399/BAN G/98 DATED 31.5.2004 AND THE DECISION IN THE CASE OF WIPRO-GE MEDICAL SYSTEMS LT D. IN ITA NO.322- 328/8ANG)2001 DATED 8.7.2002 HAS HELD THAT THE LIAB ILITY TOWARDS WARRANTY IS INBUILT IN THE SALE PRICE ITSELF AND SO THE LIABILI TY IS NOT CONTINGENT BUT AN ASCERTAINED ONE AND TO BE ALLOWED IN THE YEAR OF SA LES. WE ACCORDINGLY DELETE THE DISALLOWANCE OF RS. 4,92,69,808/-. 7.2 LEARNED PUNJAB AND HARYANA HIGH COURT IN THE CA SE OF CIT V MAJESTIC AUTO LTD. (206 CTR 358) HAD AN OCCASION TO CONSIDER THE ALLOW ABILITY OF PROVISION FOR WARRANTY CLAIMS. THE P&H HIGH COURT CONSIDERED THE DECISION OF THE APEX COURT IN THE CASE OF BHARAT EARTH MOVERS LTD. V CIT. IN THAT CASE, LEAVE ENCASHMENT ALLOWABILITY WAS CONSIDERED AS ALLOWABLE THOUGH SUC H ALLOWABILITY IS TO BE QUANTIFIED AND DISCHARGED AT A FUTURE DATE. THE APEX COURT HEL D THAT THERE MAY BE SOME DIFFICULTY IN THE ESTIMATION THEREOF BUT THAT WOULD NOT CONVERT THE ACCRUED LIABILITY INTO A CONDITIONAL ONE. THE LEARNED P&H HIGH COURT TOOK INTO ACCOUNT THE DECISION OF DELHI HIGH COURT IN VINTEC CORPORATION (SUPRA) AND ACCORDINGLY HELD THAT WARRANTY LIABILITY IS NOT A CONTINGENT LIABILITY. IF THE ASS ESSEE IS MAINTAINING THE ACCOUNTS ON MERCANTILE SYSTEM ON LIABILITY ACCRUED, THOUGH TO B E DISCHARGED AT A FUTURE DATE, WOULD BE A PROPER DEDUCTION WHILE WORK ING OUT THE PROFIT AND ACCOUNTS OF THE BUSINESS. 7.3 THE DELHI HIGH COURT IN THE CASE OF CIT V SONY INDIA (P) LTD. (160 TAXMAN 397) HAS HELD THAT LIABILITY ARISING OUT OF A WARRANTY I S AN ALLOWABLE DEDUCTION EVEN WHEN AMOUNT PAYABLE BY ASSESSEE IS QUANTIFIED AND DISCHA RGED IN FUTURE. 7.4 FROM THE ABOVE JUDGEMENTS, IT IS CLEAR THAT LIA BILITY ON ACCOUNT OF WARRANTY IS NOT A CONTINGENT LIABILITY AND IN A MERCANTILE SYST EM OF ACCOUNTING, THE SAME IS TO BE PROVIDED, AS SUCH LIABILITY IS INCURRED AT THE TIME OF SALE. 7 ITA NO.224/BANG/12 7.5 WE HAVE ALSO NOTICED FROM THE ACCOUNTS THAT THE ASSESSEE MADE A PROVISION OF RS.65,44,404/- AS PROVISION FOR WARRANTY ON THE BAS IS OF THE SALES. SINCE WARRANTY PERIOD IN RESPECT OF SALES EFFECTED IN THE IMMEDIAT ELY PRECEDING YEAR EXPIRED, THEREFORE, THE EXCESS HAS BEEN WRITTEN BACK AND HAS BEEN CREDITED INTO P&L ACCOUNT. SUCH ACCOUNT WRITTEN BACK IS OF RS.41,24,8 82/-. HENCE, THE PROVISION WHICH IS MADE IN RESPECT OF SALES FOR THIS YEAR IS RS.24, 20,522/-. SALES MADE DURING THE YEAR ARE OF THE ORDER OF RS.1.90 CRORE. IT CANNOT B E ACCEPTED THAT THERE WILL BE NO WARRANTY CLAIM IN RESPECT OF SALES EFFECTED DURING THE YEAR, AS THE WARRANTY PERIOD HAS NOT EXPIRED. IT WAS EXPLAINED T O US THAT WARRANTY GIVEN BY THE ASSESSEE VARIES FROM 12 MONTHS TO 24 MONTHS. IN RES PECT OF EQUIPMENTS PROVIDED TO DEFENCE. WARRANTY IS EXTENDED FOR 24 MONTHS. LOOKIN G TO THE QUANTUM OF SALES EFFECTED DURING THE YEAR, THE NET PROVISION OF RS.2 4,20,522/- DEBITED IN PROFIT AND LOSS ACCOUNT IS NOT EXCESSIVE. THE ASSESSEE HAS SUB MITTED THAT IT IS IN THE BUSINESS OF SELLING THE EQUIPMENT SINCE 1995 AND THE PROVISI ON IS BEING MADE ON THE BASIS OF THE PAST EXPERIENCE. HENCE, WE FEEL THAT LEARNED CI T(A) WAS JUSTIFIED IN DELETING THE ADDITION. 7.6 IT HAS BEEN NOTICED BY US THAT THERE IS NET C REDIT OF WARRANTY IN THE ASST. YEAR 2002-03 TO THE EXTENT OF RS.97.5 LAKHS. IN CASE THE WARRANTY PROVISION OF RS.24.2 LAKHS IS DISALLOWED THEN THE SAME WILL HAVE TO BE D EDUCTED FROM THE NET CREDIT MADE IN THE ASST. YEAR 2002-03. THE ASSESSEE HAS FILED R ETURN FOR THE ASST. YEAR 2002-03 AND HAS PAID THE TAXES ON THE BASIS OF BOOK PROFIT. THUS, IF THE SUM IS ADDED HERE, THEN THE SAME WILL HAVE TO BE EXCLUDED FOR THE ASST . YEAR 2002-03. THE BOMBAY HIGH COURT IN THE CASE OF CIT V NAGRI MILLS CO. LTD . (33 ITR 681) HAS HELD THAT IF RATE OF TAX IS SAME, DEPARTMENT SHOULD NOT FRITTER AWAY ITS ENERGY IN FIGHTING SUCH MATTERS. HENCE WE FEEL THERE WILL BE NO LOSS TO REV ENUE IN CASE THE ORDER OF THE LEARNED CIT(A) WAS TO BE ACCEPTED BY THE REVENUE. THIS DECISION / FINDING WAS FOLLOWED BY ANOTHER CO- ORDINATE BENCH OF THIS TRIBUNAL IN ITA NO.440/BANG/2011 DT.12.6.2012 IN THE ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR 2006-07. 6.6 WE, THEREFORE, RESPECTFULLY FOLLOWING THE AFORE SAID REFERRED ORDERS OF THE CO-ORDINATE BENCHES OF THIS TRIBUNAL IN THE ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR 2000-01 IN ITA NO.586/BANG/2006 DT.8.6.2007AND FOR ASSESSMENT YEA R 2006-07 IN ITANO.440/BANG/2011 DT.12.6.2012, DELETE THE IMPUGNED DISALLOWANCE OF P ROVISION FOR WARRANTY AMOUNTING TO 8 ITA NO.224/BANG/12 RS.52,33,000 MADE BY THE ASSESSING OFFICER AND CONF IRMED BY THE LEARNED CIT (APPEALS). IT IS ORDERED ACCORDINGLY. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 9.10.2012. SD/- SD/- (GEORGE GEORGE K) (JASON P BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMB ER *REDDY GP COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, - C BENCH. 6. GUARD FILE. (TRUE COPY ) BY ORDER SR. PRIVATE SECRETARY, ITAT, BANGALORE