M/s Apple India Private Limited , Bangalore V. Deputy Commissioner of Income Tax Circle-1(1)(1), Bangalore

MA 280/BANG/2018

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4047 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 10 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-10-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 31-08-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C H SUNDAR RAO
• Assessee Lawyers: S VENKATRAM
• Keywords: Rectification of order; Question of law
• Section: 54; 154; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, B ENGALURU BEFORE S HRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER MISC. PETN. NOS.279 & 280/BANG/2018 (IN I TA NO S . 422 & 423 / BANG/2 0 1 8 ) (ASSESSMENT YEAR S : 2013 - 14 & 2014 - 1 5 ) M/ S. APPLE INDIA PVT. LTD. 19 TH FLOOR, CONCORDE TOWER C UB CITY, NO.24, VITTAL MALLYA ROAD, BENGALURU - 5600 0 1. PAN: AABCA 1906 H VS. PETITIONER DEPUTY COMMISSIONER OF INCOME - TAX, CIRCLE 1(1)(1), BENGALURU. RESPONDENT PET ITIONER BY : SHRI S.VENKATRAM, SR. ADVOCATE. RESPONDENT BY : SHRI C.H.SUNDAR RAO, CIT DATE OF HEARING : 05/10/2018 DATE OF PRONOUNCEMENT : 10 /10/2018 O R D E R PER I NTURI RAMA RAO, AM : THESE MISC. PETITIONS ARE FILED BY THE ASSESSEE - COMPA NY SEEKING MODIFICATION OF THE CONSOLIDATED ORDER PASSED BY THE TRIBUNAL IN ITA NOS.279 & 280/BANG/201 8 FOR THE ASSESSMENT YEARS 2013 - 14 AND 2014 - 15 ON THE GROUND THAT THE CONCLUSION REACHED BY THE TRIBUNAL THAT THE PROVISIONS FOR WARRANTY EXPENDITURE IS N OT BASED ON THE PAST HISTORY IS INCORRECT AS THE TRIBUNAL HAD NOT CONSIDERED THE RELEVANT CHART PLACED BEFORE IT DURING THE COURSE OF HEARING . I T IS AVERRED THAT THERE WAS NO ENDURING BENEFIT DERIVED BY THE ASSESSEE , AS 95 % OF THE PROVISION CREATED UP TO 31 ST MARCH HA D BEEN UTILIZED . IT IS FURTHER AVERRED THAT GROUND CHALLENGING THE DIRECTION OF THE CIT(A) TO RESTRICT THE ALLOWANCE OF PROVISION FOR WARRANTY TO THE EXTENT OF 2.14% OF SALE , REMAINS UN - ADJUDICATED. 2. DURING THE COURSE OF HEARING, LEA RNED SENIOR COUNSEL SUBMITTED THAT THE TRIBUNAL, WHILE PASSING T HE IMPUGN ED ORDER, HAD MP NOS.279 & 280 /BANG/2 0 18 PAGE 2 OF 8 NOT CONSIDERED THE MATERIAL EVIDENCE PLACED ON RECORD AND CONSEQUENTLY THE TRIBUNAL HAD COME TO WRONG CONCLUSION . LEARNED SENIOR COUNSEL FURTHER SUBMITTED THAT THE CHAR T FILED DURING THE COURSE OF HEARING SHOWING THE ACTUAL UTILIZATION, IN TERMS OF PERCENTAGE OF SALES OF PREVIOUS YEAR, HA D NOT BEEN CONSIDERED. IT WAS FURTHER SUBMITTED THAT THE TRIBUNAL HAD NOT CONSIDERED THE INTERNAL PROCEDURE REGARDING COMPUTATION OF P ROVISION FOR WARRANTY. THUS, IT WAS SUBMITTED THAT THE TRIBUNAL HA D PASSED THE IMPUGNED ORDER IN IGNORANCE OF THE MATERIAL ON RECORD OR REACHED A WRONG CONCLUSION. LEARNED SENIOR COUNSEL ALSO SUBMITTED THAT THE GROUND CHALLENGING THE DIRECTION OF THE CIT (A) TO RESTRICT THE PROVISION FOR WARRANTY AT THE RATE OF 2.14% OF SALES REMAINS UN - ADJUDICATED. 3. ON THE OTHER HAND, LD.CIT(DR) VEHEMENTLY OPPOSED THE PRESENT MISCELLANEOUS PETITIONS AND SUBMITTED THAT THE SUBMISSIONS MADE BY THE LEARNED SENIOR COUNSEL W ERE DULY CONSIDERED BY THE TRIBUNAL. IT IS NOT A CASE OF NON - CONSIDERATION OF MATERIAL ON RECORD OR NON - ADJUDICATION OF ANY GROUND OF APPEAL AND THEREFORE, THE PRESENT MISCELLANEOUS PETITIONS ARE LIABLE TO BE REJECTED. 4. WE HEARD RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD. THE AVERMENTS MADE IN THE PRESENT MISCELLANEOUS PETITIONS THAT THE TRIBUNAL HAD FAILED TO CONSIDER THE CHART SHOWING THE ACTUAL UTILIZATION IN TERMS OF PERCENTAGE OF SALE OF PREVIOUS YEAR IS INCORRECT. BASED ON INFORMATION C ONTAINED IN THE VERY SAME CHART, THE TRIBUNAL HAD COME TO THE CONCLUSION THAT THE PROVISION MADE WAS NOT BASED ON THE HISTORICAL DATA OR PREVIOUS EXPERIENCE , INASMUCH AS , THE CHART SHOWS THAT THE PERCENTAGE OF PROVISION FOR WARRANTY VARIED FROM 2.16 TO 9.8 9% WHICH CLEARLY SHOWS THAT PROVISION MADE IS NOT BASED ON THE HISTORICAL DATA. WE FURTHER NOTE THAT THE AVERMENTS IN THE MISC. PETITIONS THAT THE TRIBUNAL HAD FAILED TO ADJUDICATE GROUND RELATING TO RESTRICTION OF PROVISION FOR WARRANTY TO THE EXTENT OF 2.14% OF SALES IS ALSO INCORRECT. SUCH GROUND WAS DISPOSED OF BY THIS TRIBUNAL VIDE PARA.14 OF IMPUGNED ORDER HOLDING AS UNDER: MP NOS.279 & 280 /BANG/2 0 18 PAGE 3 OF 8 14. IN THE LIGHT OF ABOVE FACTUAL SITUATION, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE DERIVED ADVANTAGE BY DE FERRING ITS INCOME TO THE EXTENT OF EXCESS WARRANTY PROVISION TO SUBSEQUENT YEARS. THEREFORE, SUCH EXCESS PROVISION CANNOT BE ALLOWED AS A DEDUCTION. THEREFORE, IN OUR CONSIDERED OPINION, THE PROVISION MADE FOR WARRANTY CANNOT BE SAID TO BE RELIABLE. TH E AO, AS CONFIRMED BY THE LD.CIT(A) HAD RIGHTLY RESTRICTED THE AMOUNT OF ALLOWABLE PROVISION FOR WARRANTY AT THE RATE OF 2.14% OF SALES. THEREFORE, WE DO NOT FIND ANY FALLACY IN THE REASONING OF THE ORDER OF THE LD.CIT(A). ACCORDINGLY, THE GROUNDS OF APP EAL OF THE ASSESSEE ARE DISMISSED. 4.1 THUS, THE AVERMENTS MADE IN THE PRESENT MISCELLANEOUS PETITIONS ARE FACTUALLY INCORRECT AND THE PETITIONER HAD ONLY ATTEMPTED TO RE - ARGUE THE MATTER ON MERITS WHICH IS NOT PERMISSIBLE IN THE JURISDICTION VESTED U/S 2 54 OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT]. THE PROVISIONS OF SECTION 254(2) CANNOT BE EXERCISED TO RE - ARGUE THE MATTER AFRESH ON DIFFERENT GROUNDS OR REASONING. IN THIS CONTEXT, IT IS RELEVANT TO QUOTE FROM THE JUDGM ENT OF THE HON BLE MADRAS HIGH COURT IN THE CASE OF EXPRESS NEWSPAPERS LTD. VS. DCIT (2010)(320 ITR 12)(MAD) AS UNDER: 9. THE SCOPE AND AMPLITUDE OF S. 254(2) AND THE ANALOGOUS PROVISION S. 154 OF THE ACT HAVE BEEN CONSIDERED BY CATENA OF DECISIONS OF THE APEX COURT AND OTHER HIGH COURTS. THE UNIFORM OPINION OF THE COURTS OF SUPERIOR JURISDICTION IS THAT A PATENT, MANIFEST AND SELF - EVIDENT ERROR WHICH DOES NOT REQUIRE ELABORATE DISCUSSION OF EVIDENCE OR ARGUMENT TO ESTABLISH IT, CAN BE SAID TO BE AN ERROR APPARENT ON THE FACE OF THE RECORD AND CAN BE CORRECTED UNDER S. 254(2). AN ERROR CANNOT BE SAID TO BE APPARENT ON THE FACE OF THE RECORD IF ONE HAS TO TRAVEL BEYOND THE RECORD TO SEE WHETHER THE JUDGMENT IS CORRECT OR NOT. AN ERROR APPARENT ON THE RECORD MEANS AN ERROR WHICH STRIKES ONE ON MERE LOOKING AND DOES NOT NEED A LONG DRAWN OUT PROCESS OF REASONING ON POINTS ON WHICH THERE MAY BE CONCEIVABLY TWO OPINIONS. THE ERROR SHOULD NOT REQUIRE ANY EXTRANEOUS MATTER TO SHOW ITS INCORRECTNESS. TO PUT IT DIFFE RENTLY, IT SHOULD BE SO MANIFEST AND CLEAR THAT NO COURT WOULD PERMIT IT TO REMAIN ON RECORD. IF THE VIEW ACCEPTED BY THE COURT IN THE ORIGINAL JUDGMENT IS ONE OF POSSIBLE VIEWS, THE CASE CANNOT BE SAID TO BE COVERED BY AN ERROR APPARENT ON THE FACE OF THE RECORD. SEC. 254(2) SPECIFICALLY EMPOWERS THE MP NOS.279 & 280 /BANG/2 0 18 PAGE 4 OF 8 TRIBUNAL TO AMEND AT ANY TIME WITHIN FOUR YEARS FROM THE DATE OF AN ORDER, ANY ORDER PASSED BY IT UNDER S. 254(1) WITH A VIEW TO RECTIFY ANY MISTAKE APPARENT FROM THE RECORD EITHER SUO MOTU OR ON AN APPLICATIO N. IN ORDER TO ATTRACT THE APPLICATION OF S. 254(2), THE MISTAKE MUST EXIST AND THE SAME MUST BE APPARENT FROM THE RECORD. THE EXPRESSION 'MISTAKE APPARENT FROM THE RECORD' CONTAINED IN SS. 154 AND 254(2) HAS WIDER CONTENT THAN THE EXPRESSION 'ERROR APPARE NT ON THE FACE OF THE RECORD' OCCURRING IN ORDER 47 R. 1 OF CPC. THE RESTRICTIONS ON THE POWER OF REVIEW UNDER ORDER 47 R. 1 OF CPC DO NOT HOLD GOOD IN THE CASES OF SS. 254(2) AND 154 OF THE ACT. SEC. 254(2) DOES NOT CONFER POWER ON THE TRIBUNAL TO REVIEW ITS EARLIER ORDER. UNDER THE GARB OF RECTIFICATION OF MISTAKE IT IS NOT POSSIBLE FOR A PARTY TO TAKE FURTHER CHANCE OF RE - ARGUING THE APPEAL ALREADY DECIDED. WHAT CAN BE RECTIFIED UNDER S. 254(2) IS A MISTAKE WHICH IS APPARENT AND PATENT. THE MISTAKE HAS T O BE SUCH FOR WHICH NO ELABORATE REASONS OR ENQUIRY IS NECESSARY. WHERE TWO OPINIONS ARE POSSIBLE THEN IT CANNOT BE SAID TO BE A MISTAKE APPARENT ON THE RECORD. WHEN PREJUDICE RESULTING FROM AN ORDER IS ATTRIBUTABLE TO THE TRIBUNAL S MISTAKE, ERROR OR OMIS SION, IT IS ITS BOUNDEN DUTY TO SET IT RIGHT. THE PURPOSE BEHIND THE ENACTMENT OF S. 254(2) OF THE ACT TO AMEND ANY ORDER PASSED UNDER SUB - S. (1), IF ANY MISTAKE APPARENT FROM THE RECORDS IS BROUGHT TO THE NOTICE OF THE TRIBUNAL, IS BASED ON THE FUNDAMENTA L PRINCIPLE THAT NO PARTY APPEARING BEFORE THE TRIBUNAL, BE IT AN ASSESSEE OR THE DEPARTMENT, SHOULD SUFFER ON ACCOUNT OF ANY MISTAKE COMMITTED BY THE TRIBUNAL. THIS FUNDAMENTAL PRINCIPLE HAS NOTHING TO DO WITH THE INHERENT POWER OF THE TRIBUNAL. IF PREJUD ICE IS RESULTED TO THE PARTY, WHICH PREJUDICE IS ATTRIBUTABLE TO THE TRIBUNAL S MISTAKE, ERROR OR OMISSION AND WHICH ERROR IS A MANIFEST ERROR, THEN THE TRIBUNAL WOULD BE JUSTIFIED IN RECTIFYING ITS MISTAKE. RECTIFICATION CAN BE MADE ONLY WHEN A GLARING MI STAKE OF FACT OR LAW COMMITTED BY THE OFFICER PASSING THE ORDER BECOMES APPARENT FROM THE RECORD. THE RECTIFICATION IS NOT POSSIBLE IF THE QUESTION IS DEBATABLE. A POINT WHICH WAS NOT EXAMINED ON FACTS OR IN LAW CANNOT BE DEALT WITH AS A MISTAKE APPARENT F ROM THE RECORD. NO ERROR CAN BE SAID TO BE APPARENT ON THE FACE OF THE RECORD IF IT IS NOT MANIFEST OR SELF - EVIDENT AND REQUIRES AN EXAMINATION OR ARGUMENT TO ESTABLISH IT. WHERE WITHOUT ANY ELABORATE ARGUMENT ONE COULD POINT TO THE ERROR AND SAY HERE IS A SUBSTANTIAL POINT OF LAW WHICH STARES ONE IN THE FACE, AND THERE COULD REASONABLY BE NO TWO OPINIONS ENTERTAINED ABOUT IT, IS A CLEAR CASE OF ERROR APPARENT ON THE FACE OF THE RECORD. VIDE ASSTT. CIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LTD. (2008) 219 CTR (SC) 90 : (2008) 12 DTR (SC) 346 : (2008) 305 ITR 227 (SC), HONDA SIEL POWER PRODUCTS LTD. VS. CIT (2007) 213 MP NOS.279 & 280 /BANG/2 0 18 PAGE 5 OF 8 CTR (SC) 425 : (2007) 295 ITR 466 (SC), HARI VISHNU KAMATH VS. AHMAD ISHAQUE (1955) 1 SCR 1104, CIT VS. KESHRI METAL (P) LTD. (1999) 155 CTR (SC) 531 : (1999) 237 ITR 165 (SC), DEVA METAL POWER (P) LTD. VS. CIT 2008 (2) SCC 439, CIT VS. HERO CYCLES (P) LTD. (1997) 142 CTR (SC) 122 : (1997) 228 ITR 463 (SC), SATYANARAYAN LAXMINARAYAN HEGDE VS. MALLIKARJUN BHAVANAPPA TIRUMALE (1960) 1 SCR 890, THUNGA BHADRA INDUSTRIES LTD. VS. GOVERNMENT OF ANDHRA PRADESH, REP. BY THE DY. CCT AIR 1964 SC 1372, BATUK K. VLYAS VS. SURAT BOROUGH MUNICIPALITY ILR 1953 BOM 191, MRS. K.T.M.S. UMMA SALMA VS. CIT (1983) 144 ITR 890, 895 (MAD), KIL KOTAGIRI TEA & COFFEE ESTATES CO. LTD. VS. ITAT (1989) 75 CTR (KER) 115 : (1988) 174 ITR 579 (KER), CIT VS. R. CHELLADURAI (1979) 11 CTR (MAD) 157 : (1979) 118 ITR 108 (MAD), STATE OF TAMIL NADU VS. THAKOREBHAI & BROS. (1983) 52 STC 104 (MAD), JAINARAIN JEEVRAJ VS. CIT (1979) 13 CTR ( RAJ) 342 : (1980) 121 ITR 358, 363 (RAJ), CIT VS. VARDHMAN SPINNING (1997) 139 CTR (P&H) 322 : (1997) 226 ITR 296, 302 (P&H), BATA INDIA LTD. VS. DY. CIT (1996) 217 ITR 871 (CAL) AND CIT VS. PRAHLAD RAI TODI (2001) 171 CTR (GAU) 537 : (2001) 251 ITR 833 (G AU). 10. FROM THE VARIOUS JUDGMENTS OF THE SUPREME COURT ABOVE REFERRED TO AND OTHER HIGH COURTS, IT IS CLEAR THAT THE TRIBUNAL S POWER UNDER S. 254(2) IS NOT TO REVIEW ITS EARLIER ORDER BUT ONLY TO AMEND IT WITH A VIEW TO RECTIFY ANY MISTAKE APPARENT FROM THE RECORD. WHAT CAN BE TERMED AS 'MISTAKE APPARENT ?'. 'MISTAKE' IN GENERAL MEANS TO TAKE OR UNDERSTAND WRONGLY OR INACCURATELY; TO MAKE AN ERROR IN INTERPRETING; IT IS AN ERROR; A FAULT, A MISUNDERSTANDING, A MISCONCEPTION. MISTAKE IN TAXATION LAWS HAS A SPECIAL SIGNIFICANCE. IT IS MOSTLY SUBJECTIVE AND THE DIVIDING LINE IS THIN AND INDISCERNIBLE. 'APPARENT' MEANS VISIBLE, CAPABLE OF BEING SEEN, EASILY SEEN, OBVIOUS PLAIN, OPEN TO VIEW, EVIDENT, APPEARS, APPEARING AS REAL AND TRUE, CONSPICUOUS, MANIF EST, SEEMING. THE PLAIN MEANING OF THE WORD 'APPARENT' IS THAT IT MUST BE SOMETHING WHICH APPEARS TO BE EX FACIE AND INCAPABLE OF ARGUMENT AND DEBATE. IF SUCH A 'MISTAKE APPARENT ON THE FACE OF RECORD' IS BROUGHT TO THE NOTICE, S. 254(2) EMPOWERS THE TRIBU NAL TO AMEND THE ORDER PASSED UNDER S. 254(1). AMENDMENT OF AN ORDER DOES NOT MEAN OBLITERATION OF THE ORDER ORIGINALLY PASSED AND ITS SUBSTITUTION BY A NEW ORDER. WHAT IS MISTAKE APPARENT ON THE FACE OF THE RECORD OR WHERE DOES A MISTAKE CEASE TO BE MERE MISTAKE, AND BECOME MISTAKE APPARENT ON THE FACE OF THE RECORD IS RATHER DIFFICULT TO DEFINE PRECISELY, SCIENTIFICALLY AND WITH CERTAINTY. AN ELEMENT OF INDEFINITENESS INHERENT IN ITS VERY NATURE AND IT MUST BE DISCERNIBLE FROM THE FACTS OF EACH CASE BY JU DICIOUSLY TRAINED MP NOS.279 & 280 /BANG/2 0 18 PAGE 6 OF 8 MIND. MERE EXISTENCE OF A MISTAKE OR ERROR WOULD NOT PER SE RENDER THE ORDER AMENABLE FOR RECTIFICATION, BUT SUCH A MISTAKE MUST BE ONE WHICH MUST BE MANIFEST ON THE FACE OF THE RECORD. 4.2 EVEN THE HON BLE JURISDICTIONAL HIGH COURT I N THE CA S E OF CIT VS. MCDOWELL & C O . LTD., (2004)(269 ITR 451)(KAR) HELD THAT THE POWER U/S 25 4 (2) OF THE INCOME - TAX ACT,1961 IS ONLY TO AMEND THE ORDER TO RECTIFY ANY MISTAKE APPARENT FROM RECORD AND THE ORIGINAL SHOULD NOT BE RECALLED FOR RE - HEARING THE MATTER. THE RELEVANT PARAGRAPH OF THE JUDGMENT IS REPRODUCED BELOW: 9. WE HAVE GIVEN OUR ANXIOUS CONSIDERATION TO THE ISSUE. SECTION 35(1)( E ) PROVIDES THAT WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD, THE TRIBUNAL MAY AMEND ANY ORD ER PASSED BY IT UNDER SECTION 24. SUB - SECTION (5) OF SECTION 35 PROVIDES THAT WHERE AN AMENDMENT IS MADE UNDER SECTION 35, AN ORDER SHALL BE PASSED IN WRITING BY THE TRIBUNAL. THE POWER VESTED IN THE TRIBUNAL, BY SECTION 35, IS ONLY TO AMEND THE ORDER, TO RECTIFY ANY MISTAKE APPARENT FROM THE RECORD AND NOT TO REVIEW ITS ORDER. SECTION 35 ALSO CLEARLY STATES THE MISTAKE SHOULD BE RECTIFIED BY AMENDING THE ORIGINAL ORDER. THEREFORE, RECTIFICATION PRESUPPOSES THE CONTINUED EXISTENCE OF THE ORIGINAL ORDER. WHE N AN AMENDMENT IS MADE TO THE ORIGINAL ORDER, THE AMENDMENT MERGES WITH THE ORIGINAL ORDER. THE ORIGINAL ORDER IS READ WITH THE AMENDMENT THERETO. IF THE POWER TO RECTIFY THE ORIGINAL ORDER BY WAY OF AMENDMENT TO THAT ORDER IS TO BE INTERPRETED AS PERMITTI NG RECALLING OF THE ORIGINAL ORDER, THEN THE ORIGINAL ORDER CEASES TO EXIST AND A FRESH ORIGINAL ORDER IS MADE. RECALLING THE ORIGINAL ORDER INVOLVES REHEARING OF THE MATTER WHICH IS NOT THE PURPOSE AND INTENTION OF THE PROVISION FOR RECTIFICATION. WHEN TH E WORDING OF THE STATUTORY PROVISION ARE CLEAR AND UNAMBIGUOUS AND CAN BE GIVEN EFFECT WITHOUT ANY DIFFICULTY, IT IS NOT PERMISSIBLE TO GIVE AN EXTENDING MEANING TO THE PROVISION. THE WORDS 'AMENDED THE ORIGINAL ORDER TO RECTIFY ANY MISTAKE APPARENT FROM T HE RECORD' DOES NOT MEAN RECALL THE ORIGINAL ORDER, REHEAR THE MATTER AND REPLACE THE ORIGINAL ORDER BY A FRESH ORDER. THE PURPOSE CAN BE ACHIEVED BY CONTINUING THE ORIGINAL ORDER AND PASSING AN AMENDMENT ORDER STATING WHATEVER IS NECESSARY TO RECTIFY THE MISTAKE APPARENT FROM THE RECORD. WHETHER THE ISSUE INVOLVED IS ONE OR MORE MAKES NO DIFFERENCE, AS WHAT IS CONTEMPLATED AND PROVIDED FOR IS AN AMENDMENT TO THE MP NOS.279 & 280 /BANG/2 0 18 PAGE 7 OF 8 ORIGINAL ORDER AND NOT AN ORDER IN SUBSTITUTION OF THE ORIGINAL ORDER. 4.3 WE FURTHER NO TE THAT THE HON BLE MADRAS HIGH COURT IN THE CA S E OF CIT VS. FORBES CAMPBELL FINANCE LTD. (2013) 352 ITR 602(MAD) ALSO HELD THAT UNLESS THREE CONDITIONS RECOGNIZING THE LIABILITY AS POINTED OUT BY THE HON BLE APEX COURT IN THE CASE OF CIT VS. ROTORK CONTRO LS INDIA ( P .) LTD. (314 ITR 62) (SC) ARE SATISFIED THE CLAIM FOR WARRANTY EXPENDITURE CANNOT BE ALLOWED AUTOMATICALLY. THE SAME POSITION WAS AGAIN REITERATED BY THE HON BLE MADRAS HIGH COURT IN THE CASE OF LASER SOFT INFOSYSTEMS LTD. VS. ITO (2018) 98 TAX MANN.COM 51)(MAD.) WHEREIN THE PLEA FOR RESTORATION OF THE MATTER TO THE AO WAS ALSO REJECTED BY HOLDING AS UNDER: 11. LEARNED COUNSEL FOR THE ASSESSEE PRODUCED AN ADDITIONAL TYPED SET OF PAPERS, WHICH CONTAINED A NOTE ON PROVISION FOR WARRANTY, TERMS AND CONDITIONS AND PROVISIONS FOR WARRANTY WORKING. FROM THE WARRANTY WORKING, WE FIND THAT THE ASSESSEE HAS STATED THAT THE AVERAGE NUMBER OF PEOPLE IN THE YEAR 2000 - 2001 WAS 277 AND THE TOTAL MAN - MONTH AVAILABLE IN THE YEAR WAS 3324 (277 X 12) AND THE WARRA NTY MAN - MONTH REQUIRED WAS ESTIMATED AT 50 AND MULTIPLIED BY THE AVERAGE MAN - MONTH CHARGES OF RS.34,300/ - AND ACCORDINGLY, THE ASSESSEE ARRIVED THE PROVISION AT 17,15,000/ - . ON A PERUSAL OF THIS WORKING, WE FIND THAT THERE IS ABSOLUTELY NO HISTORICAL TREND BASED ON WHICH, THE ASSESSEE HAS MADE SUCH A DEDUCTION. IN FACT, EVERYTHING APPEARS ONLY TO BE A PROVISION AND NOTHING HAS BEEN SUBSTANTIATED AND AS RIGHTLY POINTED OUT BY THE ASSESSING OFFICER, THE ASSESSEE HAS FAILED TO CRYSTALISE THE SAID PROVISION AT THE END OF THE PREVIOUS YEAR. 12. FACED WITH THIS SITUATION, LEARNED COUNSEL FOR THE ASSESSEE REQUESTED THAT THE MATTER MAY BE REMANDED TO THE ASSESSING OFFICER FOR FRESH CONSIDERATION SO THAT THE ASSESSEE WILL BE ABLE TO PRODUCE MATERIAL TO SUBSTANTIATE THE CASE. WE FIND THAT SUCH A PLEA WHOLLY INADMISSIBLE AT THIS JUNCTURE, ESPECIALLY WHEN WE ARE CALLED UPON TO DECIDE THE SUBSTANTIAL QUESTION OF LAW, WHICH HAS BEEN FRAMED FOR CONSIDERATION. 13. TAKING NOTE OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ASSESSEE HAS FAILED TO FULFIL THE THREE CONDITIONS POINTED OUT BY THE HON'BLE SUPREME COURT IN ROTORK CONTROLS INDIA (P.) LTD. ( CITED SUPRA ) AND THERE HAS BEEN NO MATERIAL PLACED BEFORE THE ASSESSING OFFICER TO ESTABLISH THAT THE PROVISIO N IN THE ACCOUNTS FOR THE WARRANTY MP NOS.279 & 280 /BANG/2 0 18 PAGE 8 OF 8 CHARGES WAS BASED ON ANY SCIENTIFIC BASIS OR BASED ON THE PAST EXPERIENCE. THUS, THE STAND TAKEN BY THE ASSESSEE WAS WHOLLY NON - SUBSTANTIATED AND CONSEQUENTLY, THE TRIBUNAL RIGHTLY ALLOWED THE APPEAL FILED BY THE REVENUE AND RESTORED THE FINDINGS OF THE ASSESSING OFFICER. 4.4 SINCE IN THE PRESENT PETITIONS, THE ASSESSEE - COMPANY COULD NOT POINT OUT ANY MISTAKES WHICH ARE CAPABLE OF BEING RECTIFIED, THE MISCELLANEOUS PETITIONS CANNOT BE ENTERTAINED. THUS, IN THE LIGHT OF THE ABOVE LEGAL POSITION, THE MISCELLANEOUS PETITIONS ARE REJECTED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH OCTOBER , 2018 SD/ - SD/ - ( SUNIL KUMAR YADAV ) (INTURI R AMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE : BENGALURU. D A T E D : 10 / 10 /201 8 SRINIVASULU, SPS COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A) 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE