AT and S India Private Limited Vs. PCIT, Kolkata

Parties Involved

Facts Summary

The assessee, AT and S India Private Limited, filed its return of income for the assessment year 2018-19 declaring a total income of ₹32,25,51,500/-. The case was selected for scrutiny and the assessment under section 143(3) read with section 144C was framed on 15.11.2021, assessing the income at Rs. 35,48,74,770/-. The Principal Commissioner of Income Tax (PCIT) revised this assessment, claiming it was erroneous and prejudicial to the revenue. The revision was based on two grounds: (i) the assessee had debited ₹2,42,60,000/- in the Profit and Loss account on account of provision for warranty, which the PCIT deemed not allowable, and (ii) the assessee had reduced ₹31,35,42,299/- on account of brought forward unabsorbed losses and depreciation, which the PCIT claimed was excessive. The assessee contested these revisions, arguing that the original assessment was valid and in accordance with the law.…

Legal Issues

• 1. Whether the provision for warranty of ₹2,42,60,000/- debited by the assessee is allowable.
• 2. Whether the claim of brought forward unabsorbed losses and depreciation amounting to ₹31,35,42,299/- is excessive.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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