DCIT 8(3), MUMBAI v. ZINSER TEXTILE SYSTEMS P.LTD, MUMBAI

ITA 8595/MUM/2011 | 2007-2008
Pronouncement Date: 03-07-2013 | Result: Allowed

Appeal Details

RSA Number 859519914 RSA 2011
Assessee PAN AAACZ1594R
Bench Mumbai
Appeal Number ITA 8595/MUM/2011
Duration Of Justice 1 year(s) 6 month(s) 14 day(s)
Appellant DCIT 8(3), MUMBAI
Respondent ZINSER TEXTILE SYSTEMS P.LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 03-07-2013
Appeal Filed By Department
Order Result Allowed
Bench Allotted K
Tribunal Order Date 03-07-2013
Date Of Final Hearing 17-06-2013
Next Hearing Date 17-06-2013
Assessment Year 2007-2008
Appeal Filed On 20-12-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL K KK K BENCH BENCH BENCH BENCH MUMBAI MUMBAI MUMBAI MUMBAI . . ! ! ! ! ' . BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI P. M. JAGTAP P. M. JAGTAP P. M. JAGTAP P. M. JAGTAP AM & AM & AM & AM & SHRI SHRI SHRI SHRI VIJAY PAL RAO JM VIJAY PAL RAO JM VIJAY PAL RAO JM VIJAY PAL RAO JM ./ I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NO. .. . 42/MUM/2012 42/MUM/2012 42/MUM/2012 42/MUM/2012 ( #$ #$ #$ #$ % % % % / ASSESSMENT YEAR: 2007-08) M/S. ZINSER TEXTILE SYSTEMS PVT. LTD. 43 DR. V. B. GANDHI MARG FORT MUMBAI-400021 $ $ $ $ / VS. DEPUTY COMMISSIONER OF INCOME TAX RANGE-8(3) AAYKAR BHAVAN M. K. MARG MUMBAI-400020 !& ./ ' ./ PAN/GIR NO. : AAACZ1594R ( &( / APPELLANT APPELLANT APPELLANT APPELLANT) .. ( )*&( / RESPONDENT RESPONDENT RESPONDENT RESPONDENT) ./ I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO. 8595/MUM/2011 8595/MUM/2011 8595/MUM/2011 8595/MUM/2011 ( #$ #$ #$ #$ % % % % / ASSESSMENT YEAR: 2007-08) DEPUTY COMMISSIONER OF INCOME TAX RANGE-8(3) AAYKAR BHAVAN M. K. MARG MUMBAI-400020 $ $ $ $ / VS. M/S. ZINSER TEXTILE SYSTEMS PVT. LTD. 43 DR. V. B. GANDHI MARG FORT MUMBAI-400021 !& ./ ' ./ PAN/GIR NO. : AAACZ1594R ( &( / APPELLANT APPELLANT APPELLANT APPELLANT) .. ( )*&( / RESPONDENT RESPONDENT RESPONDENT RESPONDENT) &( &( &( &( + + + + / APPELLANT BY : MR. P. J. PARDIWALLA & MR. NITESH JOSHI )*&( )*&( )*&( )*&( + + + + /RESPONDENT BY : MR. A. C. TEJPAL & MR. AJIT KUMAR JAIN $ $ $ $ / DT. OF HEARING : 17 TH JUNE 2013 -.% -.% -.% -.% / DT.OFPRONOUNCEMENT: 3 RD JULY 2013 / / O R D E R PER : ' . . / VIJAY PAL RAO JM THESE CROSS APPEALS ARE DIRECTED AGAINST THE ORDER DATED 28.10.2011 OF COMMISSIONER OF INCOME TAX(APPEALS) F OR THE ASSESSMENT YEAR 2007-08. ITA NO. 42 42 42 42/M/2012 /M/2012 /M/2012 /M/2012 & 8595 & 8595 & 8595 & 8595/M/2011 /M/2011 /M/2011 /M/2011 ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD . 2 2. THE ASSESSEE HAS ORIGINALLY RAISED THE FOLLOWING GROUNDS IN THIS APPEAL: 1. LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [C IT(A)J HAS ERRED IN HOLDING THAT ADJUSTMENT OF ` 2 56 62 326 I S TO BE ADDED TO THE TOTAL INCOME OF THE APPELLANT TO ARRIVE AT T HE ARMS LENGTH PRICE (ALP) OF THE INTERNATIONAL TRANSACTIONS OF TH E APPELLANT AND THEREBY DIRECTING THE INCOME OF THE APPELLANT TO BE ENHANCED BY ` 1 05 94 098. ON THE FACTS AND IN LAW THE SAID ADJUSTMENT MADE TO ARMS LENGTH PRICE OF ` 2 56 62 326/- OUGHT TO BE DELETED. 2. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE A CTION OF THE TPO/AO IN DETERMINING ARMS LENGTH PRICE IN RESPECT OF PAYMENT OF ROYALTY AT ` NIL AS AGAINST ` 1 50 68 228/- DET ERMINED BY THE APPELLANT UNDER TRANSACTION NET MARGIN METHOD (TNMM ). WHILE DOING SO THE LEARNED CIT(A) INTER ALIA ERRED IN - I) NOT CONSIDERING ADJUSTMENT FOR FUNCTIONAL ANALYS IS OF COMPARABLE COMPANIES FURNISHED DURING THE COURSE OF ASSESSMENT/APPEAL PROCEEDINGS. II) NOT DEALING WITH/ACCEPTING THE APPELLANTS SUBM ISSIONS THAT M/S. SM ENERGY TEKNIKS & ELECTRONICS LTD. (SM ENERG Y) CAN NOT BE REJECTED AS COMPARABLE ONLY ON THE GROUND THAT T HE SAID COMPARABLE COMPANY IS CONSISTENTLY INCURRING LOSSES . III) REJECTING SCHLAFHORST ENGINEERING INDIA LTD. ( SCHLAFHORST) AS COMPARABLE COMPANY WITHOUT GIVING OPPORTUNITY TO T HE APPELLANT MERELY ON THE GROUNDS THAT THE ACCOUNTIN G YEARS OF SCHLAFHORST AND THE APPELLANT ARE DIFFERENT AND THA T SCHLAFHORST HAD ABNORMAL LOSS DURING THE YEAR. IV) NOT DIRECTING THE AO TO CARRY OUT FRESH SEARCH FINDING OUT APPROPRIATE COMPARABLES WHILE HOLDING THAT COMPARAB LES ADOPTED BY THE APPELLANT ARE NOT APPROPRIATE. V) NOT DEALING WITH APPELLANTS SUBMISSIONS ON CLAI M OF DEDUCTION OF 5% IN ARMS F S LENGTH PRICE DETERMINE D ON THE BASIS OF ARITHMETIC MEAN AS PER PROVISO TO SECTION 92C(2) OF THE ACT ON THE FACTS OF THE CASE AND IN LAW THE LEARNED CI T(A) OUGHT TO HAVE ACCEPTED THE ARMS LENGTH PRICE IN RESPECT OF PAYMENT OF ROYALTY AS ` 1 50 68 228/-. 3. THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT IN RESPECT OF PURCHASE OF COMPONENTS OF ` 22 93 38 265/- MADE BY THE ITA NO. 42 42 42 42/M/2012 /M/2012 /M/2012 /M/2012 & 8595 & 8595 & 8595 & 8595/M/2011 /M/2011 /M/2011 /M/2011 ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD . 3 APPELLANT FROM ITS ASSOCIATED ENTERPRISE TNMM IS T HE MOST APPROPRIATE METHOD AS AGAINST COST PLUS METHOD (CPM ) ADOPTED BY THE APPELLANT. WHILE DOING SO THE LEARNED CIT(A ) INTER ALIA ERRED IN - I) OBSERVING THAT THE APPELLANT HAD NO OBJECTION TO ADOPTION OF TNMM AS THE MOST APPROPRIATE METHOD AS AGAINST CPM ADOPTED BY THE APPELLANT AND ACCEPTED BY THE TPO. II) NOT CONSIDERING ADJUSTMENT FOR FUNCTIONAL ANALY SIS OF COMPARABLE COMPANIES FURNISHED DURING THE COURSE OF ASSESSMENT/APPEAL PROCEEDINGS. III) NOT DEALING WITH APPELLANTS SUBMISSIONS THAT M/S. SM ENERGY TEKNIKS & ELECTRONICS LTD. (SM ENERGY) CAN NOT BE R EJECTED AS COMPARABLE ONLY ON THE GROUND THAT THE SAID COMPARA BLE COMPANY IS CONSISTENTLY INCURRING LOSSES. IV) REJECTING SCHLAFHORST ENGINEERING INDIA LTD. (S CHLAFHORST) AS COMPARABLE COMPANY WITHOUT GIVING OPPORTUNITY TO T HE APPELLANT MERELY ON THE GROUNDS THAT THE ACCOUNTIN G YEARS OF SCHLAFHORST AND THE APPELLANT ARE DIFFERENT AND THA T SCHLAFHORST HAD ABNORMAL LOSS DURING THE YEAR. V) DIRECTING ADJUSTMENT TO THE ARMS LENGTH PRICE TH OUGH THE TPO AFTER EXAMINING THE DOCUMENTARY EVIDENCE PLACE D ON RECORD BY THE APPELLANT HAD ACCEPTED THE TRANSACTI ONS UNDER CONSIDERATION TO BE AT ARMS LENGTH UNDER CPM. VI) NOT ACCEPTING THE APPELLANTS CONTENTION THAT E VEN UNDER TNMM METHOD NO ADJUSTMENT TO ALP OUGHT TO BE MADE. ON THE FACTS OF THE CASE AND IN LAW THE LEARNED CI T(A) OUGHT TO HAVE ACCEPTED THE ARMS LENGTH PRICE OF THE SAID PU RCHASE TO BE ` 22 93 38 2651-AND NO ADJUSTMENT TO ALP OUGHT TO B E MADE. 4. THE APPELLANT CRAVES LEAVE TO ADD ALTER AMEND AND/OR RESCIND ANY GROUNDS OF APPEAL DURING THE COURSE OF THE HEARING. 3. SUBSEQUENTLY VIDE LETTER DATED 25.3.2013 THE AS SESSEE FILED ADDITIONAL GROUNDS AS UNDER: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) [CIT- (A)] HAS ERRED IN DIRECTING THE ASSESSING OFFICER T O ENHANCE THE INCOME OF THE APPELLANT BY ` 1 05 94 098/- AND THER EBY REVISING THE ORDER PASSED BY THE TRANSFER PRICING OFFICER (T PO). ITA NO. 42 42 42 42/M/2012 /M/2012 /M/2012 /M/2012 & 8595 & 8595 & 8595 & 8595/M/2011 /M/2011 /M/2011 /M/2011 ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD . 4 THE ASSESSMENT ORDER HAVING BEEN PASSED IN ACCORDAN CE WITH THE PROVISIONS OF SECTION 92CA(4) OF THE ACT AND TH E LEARNED CIT(A) HAVING NO POWER OR JURISDICTION TO REVISE/RE VIEW THE ORDER OF THE TPO THE ENHANCEMENT TO INCOME OF ` 1 05 94 098/- DIRECTED BY THE LEARNED CIT(A) OUGHT TO BE SET ASID E. 2. WITHOUT PREJUDICE TO GROUND 3 IN APPEAL IN THE EVEN IT IS HELD THAT TRANSACTION NET MARGIN METHOD IS THE MOST APPROPRIATE METHOD TO DETERMINE THE ARMS LENGTH PR ICE IN RESPECT OF PURCHASE OF COMPONENTS THEN THE ADJUSTME NTS ON ACCOUNT OR ARMS LENGTH PRICE IF ANY OUGHT TO BE MADE BY APPLYING THE PROFIT LEVEL INDICATOR TO ONLY THE INT ERNATIONAL TRANSACTIONS ENTERED INTO BY THE APPELLANT WITH THE ASSOCIATED ENTERPRISES AS AGAINST THE PROFIT LEVEL INDICATOR A PPLIED BY THE COMMISSIONER OF INCOME TAX (APPEALS) TO THE TOTAL T RANSACTIONS ENTERED INTO BY THE APPELLANT. 4. THUS THE ASSESSEE HAS RAISED THE ORIGINAL GROUN D AS WELL AS ADDITIONAL GROUND VIDE LETTER DATED 25.3.2013 ONLY WITH RESPECT TO THE ADDITION ON ACCOUNT OF TRANSFER PRICING ADJUSTMENT. 5. AT THE TIME OF HEARING THE ASSESSEE HAS ALSO RAI SED AN ADDITIONAL GROUND AS UNDER: THE LEARNED DY. COMMISSIONER OF INCOME TAX (DCIT) HAS ERRED IN MAKING AN ADJUSTMENT OF ` 1 62 91 484/- BEING DI MINUTION IN VALUE OF INVESTMENT WHILE COMPUTING BOOK PROFIT UND ER SECTION 115JB OF THE ACT. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE ADJUSTMENT MADE TO THE BOOK PROFIT UNDER SECTION 11 5JB OF THE ACT OUGHT TO BE DELETED. 6. AT THE TIME OF HEARING THE LD. SENIOR COUNSEL OF THE ASSESSEE HAS SUBMITTED THAT IF THE ASSESSEE SUCCEED IN GROUND NO . 2(V) WITH RESPECT TO THE BENEFIT OF TOLERANCE RANGE OF 5% OF ARMS L ENGTH PRICE DETERMINED ON THE BASIS OF ARITHMETIC MEAN AS PER P ROVISO TO SECTION 92C(2) OF THE ACT THEN THE ADJUSTMENT MADE BY THE A UTHORITIES BELOW ON THE BASIS OF ARMS LENGTH PRICE DETERMINED WILL BE D ELETED AND ALL OTHER ITA NO. 42 42 42 42/M/2012 /M/2012 /M/2012 /M/2012 & 8595 & 8595 & 8595 & 8595/M/2011 /M/2011 /M/2011 /M/2011 ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD . 5 GROUNDS RAISE BY THE ASSESSEE IN RESPECT OF TRANSFE R PRICING ISSUE WOULD BECOME IN-FRUCTUOUS HOWEVER MAY BE KEPT OPEN. THE LD. DR HAS AGREED TO THE PROPOSITION THAT AFTER THE ISSUE NO. 2(V) OF THE ASSESSEES APPEAL IS DECIDED IN FAVOUR OF THE ASSESSEE THEN AL L OTHER ISSUES RELATING TO T.P. ADJUSTMENT WOULD BECOME IN FRUCTUOUS. 7. IN VIEW OF THE ABOVE SUBMISSIONS WE FIRST TAKE U P THE ISSUE OF BENEFIT AS PER THE PROVISO TO SECTION 92C(2) OF THE INCOME TAX ACT. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANU FACTURING AND DEALING IN TEXTILE MACHINERY AND ITS SPARE. THE AS SESSEE IS A JOINT VENTURE BETWEEN M/S ATE ENTERPRISES PVT. LTD. AND M /S SAURER GMBH. M/S SAURER GMBH & COM. KG HOLDS 70% SHARES IN ASSES SEES COMPANY. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE H AS UNDER TAKEN INTERNATIONAL TRANSACTION RELATING TO PURCHASE AND SALE OF COMPONENTS PAYMENT OF ROYALTY AND REIMBURSEMENT (PAYMENT) WITH ITS AE. THE ASSESSEE BENCH MARKED THE INTERNATIONAL TRANSACTION RELATING TO PURCHASE OF COMPONENTS VALUING ` 22.93 CRORES BY US ING COST PLUS METHOD (CPM) AS MOST APPROPRIATE METHOD. FOR THE IN TERNATIONAL TRANSACTION RELATING TO SALE OF COMPONENTS AND PAYM ENT OF ROYALTY THE ASSESSEE HAS USED TRANSACTION NET MARGIN METHOD (TN MM) AS THE MOST APPROPRIATE METHOD. THE TRANSFER PRICING OFFICER FO UND THAT ROYALTY @ 4% ON SALE PRICE HAS BEEN PAID TO THE AE AND ACCORD INGLY THE ASSESSEE WAS ASKED TO PRODUCE THE DETAILS IN RESPECT OF BENE FIT DERIVED FROM THE USE OF TECHNICAL KNOW-HOW ALONG WITH THE ECONOMIC B ENEFIT DERIVED BY ITA NO. 42 42 42 42/M/2012 /M/2012 /M/2012 /M/2012 & 8595 & 8595 & 8595 & 8595/M/2011 /M/2011 /M/2011 /M/2011 ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD . 6 THE ASSESSEE AGAINST THE PAYMENT OF ROYALTY. AFTER CONSIDERING THE REPLY AND SUBMISSION OF THE ASSESSEE THE TPO HELD THAT TH E PAYMENT OF ROYALTY MADE BY THE ASSESSEE IS NOT AT ARMS LENGTH . THE TPO HAS APPLIED TNMM AS MOST APPROPRIATE METHOD FOR BENCH M ARKING THE INTERNATIONAL TRANSACTION AND WORKED OUT AN ADJUSTM ENT AT ` 1.80 CRORES BUT SINCE THE PAYMENT OF ROYALTY BEING ONLY AT ` 1. 50 CRORES THE ALP OF SUCH PAYMENT OF ROYALTY HAS BEEN DETERMINED BY THE TPO AT NIL AND ACCORDINGLY MADE AN ADJUSTMENT OF ` 1.50 CRORES. ON APPEAL THE COMMISSIONER OF INCOME TAX(APPEALS) ENHANCE THE ASS ESSMENT BY MAKING THE ADJUSTMENT IN RESPECT OF THE INTERNATIO NAL TRANSACTION OF PURCHASE OF COMPONENTS. THE COMMISSIONER OF INCOME TAX(APPEALS) HAS BENCH MARKED ALL THE INTERNATIONAL TRANSACTION OF THE ASSESSEE BY USING TNMM AS MOST APPROPRIATE METHOD AND OPERATING PROFIT TO SALE AS PLI AND CONSIDERING ONLY TWO COMPARABLES. THE COMMI SSIONER OF INCOME TAX(APPEALS) HAS DETERMINED THE ARITHMETIC MEAN AT 8.33% AS AGAINST THE ASSESSEES OPERATING PROFIT/SALE AT 4.71%. ACCO RDINGLY THE COMMISSIONER OF INCOME TAX(APPEALS) HAS ENHANCED AN ADJUSTMENT TO ` 2 56 62 326/- AS AGAINST THE ADJUSTMENT MADE BY THE TPO AT ` 1 50 68 228/-. CONSEQUENTLY A DIFFERENTIAL AMOUNT OF ` 1 05 94 098/- WAS DIRECTED TO BE ENHANCED. 8. WE HAVE HEARD THE LD. AR AS WELL AS LD. DR AND C ONSIDERED THE RELEVANT MATERIAL ON RECORD. THOUGH THE ASSESSEE HA S CARRIED OUT VARIOUS INTERNATIONAL TRANSACTION REGARDING PAYMENT OF ROYALTY ITA NO. 42 42 42 42/M/2012 /M/2012 /M/2012 /M/2012 & 8595 & 8595 & 8595 & 8595/M/2011 /M/2011 /M/2011 /M/2011 ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD . 7 PURCHASE OF COMPONENT AND SALE OF COMPONENT HOWEVE R THE TPO MADE ADJUSTMENT ONLY WITH RESPECT TO ROYALTY PAYMENT BY TREATING THE ALP OF ROYALTY AT NIL. THE COMMISSIONER OF INCOME TAX(APPE ALS) THOUGH CONFIRM THE ADJUSTMENT MADE BY THE TPO IN RESPECT O F ROYALTY PAYMENT BUT ALSO ENHANCED THE ASSESSMENT BY MAKING ADJUSTME NT IN RESPECT OF PURCHASE OF COMPONENT. THE COMMISSIONER OF INCOME T AX(APPEALS) HAS DETERMINED THE ALP BY TAKING THE TNMM AS MOST APPRO PRIATE METHOD BUT AT THE ENTITY LEVEL OF THE ASSESSEE. THE COMMIS SIONER OF INCOME TAX(APPEALS) HAS ARRIVED AT THE ARITHMETIC MEAN OF THE COMPARABLES OPERATING PROFIT AT 8.33% AGAINST THE OPERATING PRO FIT AT THE ENTITY LEVEL OF THE ASSESSEE AT 4.71%. THOUGH WE DO NOT APPROVE THE APPROACH OF THE COMMISSIONER OF INCOME TAX(APPEALS) FOR BENCH M ARKING THE PURCHASE OF COMPONENT BY TAKING THE ENTITY LEVEL RE SULTS OF THE ASSESSEE INSTEAD OF CONSIDERING THE DATA OF INTERNA TIONAL TRANSACTIONS ONLY. EVEN OTHERWISE AS PER THE TRANSFER PRICING P ROVISIONS/REGULATION EACH AND EVERY INTERNATIONAL TRANSACTION HAS TO BE BENCH MARKED BY COMPARING INDEPENDENT UNCONTROLLED TRANSACTION. SIN CE THE REVENUE HAS NOT CHALLENGED FINDING OF COMMISSIONER OF INCOM E TAX(APPEALS) ON THE ISSUE OF TRANSFER PRICING ADJUSTMENT THEREFORE WE DO NOT PROPOSE TO GO INTO THE ISSUE WHICH HAS NOT BEEN RAISED BEFORE US. AT THE OUTSET WE NOTE THAT THE SALE PRICE OF THE ASSESSEE IS WITHIN THE TOLERANCE LIMIT OF 5% AS PER THE PROVISO TO SECTION 92C(2) OF THE INCO ME TAX ACT WHICH IS CLEAR FROM THE WORKING OF THE COMMISSIONER OF INCOM E TAX(APPEALS) AT PAGE NO. 22 OF THE IMPUGNED ORDER AS UNDER: ITA NO. 42 42 42 42/M/2012 /M/2012 /M/2012 /M/2012 & 8595 & 8595 & 8595 & 8595/M/2011 /M/2011 /M/2011 /M/2011 ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD . 8 SL. NO. PARTICULARS AS PER ASSESSEE (FORM 3CEB) AS PER TPO ALP DETERMINED AS PER APPELLATE ORDER 1. OPERATING INCOME (OI) 62 30 58 589 62 30 58 589 62 30 58 589 2. PLI (OP/SALES) 4.71% 7.61% 8.83 3. OPERATING PROFIT (OP) 2 93 53 747 4 74 14 758 5 50 16 073 4. OPERATING COST 59 37 04 842 57 56 43 831 56 80 4 2 516 ADJUSTMENT ADJUSTMENT ADJUSTMENT ADJUSTMENT ` `` ` 256 62 326 ( 256 62 326 ( 256 62 326 ( 256 62 326 (` `` ` 59 37 04 842 59 37 04 842 59 37 04 842 59 37 04 842- -- -` `` ` 56 80 42 516) 56 80 42 516) 56 80 42 516) 56 80 42 516) 9. THE COMMISSIONER OF INCOME TAX(APPEALS) APPEAL H AS DETERMINED THE ALP BEING OPERATING COST AT ` 56 80 42 516/- AS AGAINST THE OPERATING COST OF THE ASSESSEE AT ` 59 37 04 842/- AND ACCORDINGLY MADE THE ADJUSTMENT OF THE DIFFERENCE AMOUNT INTO ` 256 62 326/-. THE OPERATING COST OF THE ASSESSEE IS WITHIN THE 5% TOL ERANCE RANGE OF THE ALP DETERMINED BY THE COMMISSIONER OF INCOME TAX(AP PEALS) THEREFORE NO ADJUSTMENT IS CALLED FOR ON THIS ACCO UNT. IT IS PERTINENT TO NOTE THAT THE COMMISSIONER OF INCOME TAX(APPEALS) H AS DETERMINED THE ARMS LENGTH BY CONSIDERING THE ENTITY LEVEL RESULT S OF THE ASSESSEE WHICH INCLUDES ALL THE INTERNATIONAL TRANSACTIONS THEREFORE WHEN THE OVER ALL PRICE OF THE ASSESSEE IS WITHIN THE RANGE OF 5% OF ALP BEING THE ARITHMETIC MEAN THEN NO ADJUSTMENT IS PERMITTED. 10. IN VIEW OF THE FINDINGS ON THE GROUND NO. 2(V) ABOVE THE OTHER GROUNDS OF THE ASSESSEES APPEAL INCLUDING THE ADDI TIONAL GROUNDS OF THE ASSESSEES APPEAL REGARDING TO TP ADJUSTMENT BE COME IN FRUCTUOUS BEING ACADEMIC IN NATURE. HENCE WE DO NOT PROPOSE TO GO INTO THE OTHER GROUNDS RAISED BY THE ASSESSEE THOUGH THE SAM E ARE KEPT OPEN ITA NO. 42 42 42 42/M/2012 /M/2012 /M/2012 /M/2012 & 8595 & 8595 & 8595 & 8595/M/2011 /M/2011 /M/2011 /M/2011 ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD . 9 EXCEPT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE AT THE TIME OF HEARING REGARDING THE ADJUSTMENT OF ` 162 91 484/- BEING DIMINUTION IN VALUE OF INVESTMENT WHILE COMPUTING BOOK PROFIT U/S 115JB OF THE ACT. 11. NOW WE TAKE UP THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IN RESPECT OF ADJUSTMENT ON ACCOUNT OF DIMINUTION OF V ALUE OF INVESTMENT WHILE COMPUTING BOOK PROFIT U/S 115JB. 12. WE HAVE HEARD THE LD. AR AS WELL AS LD. DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD. AR OF THE ASSE SSEE HAS SUBMITTED THAT THE ASSESSEE HAS MADE INVESTMENT OF ` 9 CRORES IN THE UNITS OF MUTUAL FUND AS PER THE DETAILS AT PAGE NO. 213 OF T HE PAPER BOOK. THE MARKET VALUE OF SUCH INVESTMENT AS ON THE BALANCE S HEET DATE WAS ` 7 37 08 516/-. THE ASSESSEE HAS DEBITED THE DIMINUE ND VALUE OF ` 162 91 484/- TO THE PROFIT AND LOSS ACCOUNT UNDER T HE HEAD DIMINUTION IN VALUE OF INVESTMENT. THE ASSESSEE IN THE RETURN OF INCOME HAS NOT INCREASED BOOK PROFIT COMPUTED U/S 115JB ON ACCOUNT OF DIMINUTION IN VALUE OF INVESTMENT DEBITED TO THE PROFIT AND LOSS ACCOUNT HOWEVER DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE CONC EDED THE ADJUSTMENT IN VIEW OF THE RETROSPECTIVE AMENDMENT I N SECTION 115JB WITH EFFECT FROM 1.4.2004 BY THE FINANCE ACT 2009. THE LD. AR HAS SUBMITTED THAT SINCE THE DIMINUTION IN VALUE OF IN VESTMENT WAS NOT A PROVISION BUT WAS ACTUALLY WRITTEN OF IN THE BOOKS OF ACCOUNT BY VALUING AT MARKET PRICE. THEREFORE THE EXPLANATION OF U/S 115JB IS NOT ATTRACTED TO THE SAID AMOUNT. HENCE THE LD. AR HAS PLEADED T HAT THE ADDITIONAL ITA NO. 42 42 42 42/M/2012 /M/2012 /M/2012 /M/2012 & 8595 & 8595 & 8595 & 8595/M/2011 /M/2011 /M/2011 /M/2011 ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD . 10 GROUND MAY BE ADMITTED FOR ADJUDICATION ON MERIT. I N SUPPORT OF HIS CONTENTION ON MERIT HE HAS RELIED UPON THE DECISIO N OF HONBLE KARNATAKA HIGH COURT IN CASE OF CIT VS YOKOGAWA IND IA LTD. 204 TAXMAN 305. 13. ON THE OTHER HAND THE LD. DR HAS SUBMITTED THA T WHEN THE ASSESSEE CONCEDED THE ADJUSTMENT DURING THE ASSESSM ENT PROCEEDINGS THEN THE ASSESSEE IS NOT AGGRIEVED BY THE ASSESSMEN T ORDER ON THIS ISSUE. THIS ISSUE DOES NOT ARISE FROM THE IMPUGNED ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS) THEREFORE AT THIS STAGE THE ADDITIONAL GROUND ON THIS ISSUE CANNOT BE ACCEPTED. 14. HAVING CONSIDERED THE RIVAL SUBMISSION AS WELL AS THE RELEVANT MATERIAL ON RECORD WE NOTE THAT THE ASSESSEE HAS N OT RAISED THE ISSUE BEFORE THE COMMISSIONER OF INCOME TAX(APPEALS). HOW EVER IN VIEW OF THE FACT THAT THE ASSESSEE HAS ACTUALLY WRITTEN OF THE AMOUNT ON ACCOUNT OF DIMINUTION IN VALUE OF INVESTMENT AND IT WAS NOT A MERE PROVISION THEN THIS ASPECT IS REQUIRED TO BE EXAMIN ED. THE ASSESSING OFFICER HAS NOT EXAMINED THIS ISSUE FROM THE ANGLE OF THE ACTUAL WRITTEN OF THE AMOUNT AS THE ASSESSEE CONCEDED THE SAME. BU T IN VIEW OF THE VARIOUS DECISIONS ON THE POINT AND PARTICULARLY IN THE CASE OF CIT VS YOKOGAWA INDIA LTD. (SUPRA) THIS ISSUE REQUIRES A FRESH CONSIDERATION. ACCORDINGLY IN THE INTEREST OF JUSTICE WE ADMIT TH E ADDITIONAL GROUND AND REMIT THE SAME TO THE RECORD OF THE ASSESSING OFFICER FOR ITA NO. 42 42 42 42/M/2012 /M/2012 /M/2012 /M/2012 & 8595 & 8595 & 8595 & 8595/M/2011 /M/2011 /M/2011 /M/2011 ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD . 11 EXAMINING AND DECIDING THE SAME IN THE LIGHT OF THE JUDICIAL PRECEDENT ON THIS POINT. 15. THE REVENUE HAS RAISED THE FOLLOWING GROUND IN THIS APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN DE LETING THE ADDITION OF ` 47 52 496/- ON ACCOUNT OF PROVISION OF WARRANT. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN NO T APPRECIATING THAT THE PROVISION IS NOT CRYSTALISED AND HENCE IS IN THE NATURE OF CONTINGENT LIABILITY AND CONSEQUENTLY NOT ALLOWABLE. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN DI RECTING THE ASSESSING OFFICER TO EXCLUDE PROVISION OF WARRANTY OF ` 47 57 496/- FOR COMPUTING BOOK PROFIT U/S 115JB. 16. THE ONLY ISSUE ARISES IN THE REVENUE APPEAL IS REGARDING DELETION OF ADDITION OF ` 47 52 496/- ON ACCOUNT OF PROVISIO N OF WARRANTY IN NORMAL COMPUTATION OF INCOME AS WELL AS FOR COMPUTI NG THE BOOK PROFIT U/S 115JB. THE ASSESSING OFFICER HAS NOTED THAT THE ASSESSEE HAS SHOWN PROVISION FOR WARRANTY EXPENSES AMOUNTING OF ` 18 0 3 967/- AS AT THE BEGINNING OF THE YEAR AND A SUM OF ` 56 65 603/- BE ING PROVISION MADE DURING THE YEAR. AFTER UTILISING A SUM OF ` 27 12 1 44/- DURING THE YEAR THE ASSESSEE HAS SHOWN TO HAVE A NET PROVISION FOR WARRANTY EXPENSES OF ` 47 57 496/-. THE ASSESSING OFFICER ASKED THE A SSESSEE TO EXPLAIN AS TO WHY THE SUM OF ` 47 57 496/- SHOULD NOT BE TREAT ED AS UNCERTAINED LIABILITY AND ACCORDINGLY BE DISALLOWED AND ADDED T O TOTAL INCOME AS WELL AS BOOK PROFIT OF THE ASSESSEE. THE ASSESSEE HAS EX PLAINED THAT IT IS REQUIRED TO PROVIDE WARRANTY FOR 6 MONTHS FROM THE DATE OF ERECTION/8 ITA NO. 42 42 42 42/M/2012 /M/2012 /M/2012 /M/2012 & 8595 & 8595 & 8595 & 8595/M/2011 /M/2011 /M/2011 /M/2011 ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD . 12 MONTHS FROM DATE OF SALE INVOICE. THUS DURING THE SUBSISTENCE OF WARRANTY PERIOD IF ANY OF THE MACHINES SOLD HAS CA USED ANY PROBLEM TO THE CUSTOMER THE ASSESSEE IS REQUIRED TO REPAIR/RE PLACE THE PARTS ETC. FREE OF COST. THE ASSESSEE RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN CASE OF ROTORK CONTROLS INDIA PVT. LTD. VS CIT 223 CTR 425. THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND TREATED THE PROVISION FOR WARRANTY AS A CONTINGENT LIABILITY. ACCORDINGLY THE ASSESSING OFFICER ADDED THE SAME TO THE TOTAL I NCOME OF THE ASSESSEE AS WELL AS THE BOOK PROFIT. ON APPEAL THE COMMISSIONER OF INCOME TAX(APPEALS) HAS DELETED THE ADDITION MADE B Y THE ASSESSING OFFICER BY FOLLOWING THE DECISION OF HONBLE SUPREM E COURT IN CASE OF ROTORK CONTROLS INDIA PVT. LTD. VS CIT (SUPRA). 17. BEFORE US THE LD. DR HAS SUBMITTED THAT THE PRO VISION FOR WARRANTY IS UNCERTAIN LIABILITY AS THE ASSESSEE HAS NOT MADE THE PROVISION ON THE BASIS OF ANY PREVIOUS DATA AND THE REFORE THE ESTIMATE OF THE LIABILITY IS NOT BASED ON SCIENTIFIC METHOD. HE HAS SUBMITTED THAT THE DECISION OF HONBLE SUPREME COURT IN CASE OF RO TORK CONTORL INDIA PVT. LTD. IS NOT APPLICABLE IN THE FACTS OF THE ASS ESSEES CASE. AS REGARDS THE ADJUSTMENT WHILE COMPUTING THE BOOK PROFIT U/S 115JB THE LD. DR HAS SUBMITTED THAT THE PROVISION FOR LIABILITY FALL S UNDER THE EXPLANATION TO SECTION 115JB AND THEREFORE REQUIRES TO BE ADDED BACK. 18. ON THE OTHER HAND THE LD. AR HAS SUBMITTED THA T PROVISION WAS MADE @ 1% OF SALES DURING THE PERIOD FROM AUGUST 20 06 TO MARCH ITA NO. 42 42 42 42/M/2012 /M/2012 /M/2012 /M/2012 & 8595 & 8595 & 8595 & 8595/M/2011 /M/2011 /M/2011 /M/2011 ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD . 13 2007. SALES MADE PRIOR TO THE SAID PERIOD THE WARR ANTY PERIOD EXPIRED ON OR BEFORE 31 ST MARCH 2007 AND THEREFORE NO PROVISION IS REQUIRED AS THE ACTUAL EXPENSES INCURRED ARE CHARGED TO PROFIT AND LOSS ACCOUNT. THE LD. AR HAS POINTED OUT AS PER THE PAST RECORD O F THE EXPENSES INCURRED ON THE WARRANTY IT COMES TO AN AVERAGE OF 1% TO THE TURNOVER. THEREFORE THE PROVISION FOR THE YEAR IS EQUIVALENT TO 1% OF THE SALE EFFECTED DURING THE PERIOD FROM AUGUST 2006 TO MARC H 2007 IS BASED ON THE DATA OF PAST EXPENSES ON WARRANTY. HE HAS RELIE D UPON THE DECISION OF HONBLE SUPREME COURT IN CASE OF ROTORK CONTROLS INDIA PVT. LTD. VS CIT (SUPRA). AS REGARDS THE ADJUSTMENT FOR COMPUTIN G THE BOOK PROFIT U/S 115JB THE LD. AR OF THE ASSESSEE HAS SUBMITTED THA T WHEN THE PROVISION IS MADE BASED ON THE PAST EXPERIENCE AND MATCHING CONCEPT NO ADJUSTMENT CAN BE MADE U/S 115JB OF THE ACT. HE HAS RELIED UPON THE FOLLOWING DECISION OF PAGE NO. 26-27: CIT VS NATIONAL HYDRO ELECTRIC POWER CORPORATION LT D. 45 DTR 117 CIT VS NATIONAL HYDRO ELECTRIC POWER CORPORATION LT D. 45 DTR 117 CIT VS NATIONAL HYDRO ELECTRIC POWER CORPORATION LT D. 45 DTR 117 CIT VS NATIONAL HYDRO ELECTRIC POWER CORPORATION LT D. 45 DTR 117 (P&H) (P&H) (P&H) (P&H) DELHI HIGH C DELHI HIGH C DELHI HIGH C DELHI HIGH COURT IN CIT VS WHIRLPOOL OF INDIA LTD. (ITA NO. 1154 OF OURT IN CIT VS WHIRLPOOL OF INDIA LTD. (ITA NO. 115 4 OF OURT IN CIT VS WHIRLPOOL OF INDIA LTD. (ITA NO. 115 4 OF OURT IN CIT VS WHIRLPOOL OF INDIA LTD. (ITA NO. 115 4 OF 2009) 2009) 2009) 2009) DELHI HIGH COURT IN COMMISSIONER OF INCOME TAX VS W OODWARD DELHI HIGH COURT IN COMMISSIONER OF INCOME TAX VS W OODWARD DELHI HIGH COURT IN COMMISSIONER OF INCOME TAX VS W OODWARD DELHI HIGH COURT IN COMMISSIONER OF INCOME TAX VS W OODWARD GOVERNOR INDIA (P) LTD. & ORS. (210 CTR 354) GOVERNOR INDIA (P) LTD. & ORS. (210 CTR 354) GOVERNOR INDIA (P) LTD. & ORS. (210 CTR 354) GOVERNOR INDIA (P) LTD. & ORS. (210 CTR 354) 19. THE LD. AR HAS FURTHER POINTED OUT THAT FOR THE ASSESSMENT YEAR 2009-10 NO DISALLOWANCE HAS BEEN MADE BY THE ASSES SING OFFICER ON ACCOUNT OF WARRANTY PROVISION. HE HAS FILED THE COP Y OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2009-10. ITA NO. 42 42 42 42/M/2012 /M/2012 /M/2012 /M/2012 & 8595 & 8595 & 8595 & 8595/M/2011 /M/2011 /M/2011 /M/2011 ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD . 14 20. WE HAVE CONSIDERED THE RIVAL SUBMISSION AS WELL AS RELEVANT MATERIAL ON RECORD. THE ASSESSING OFFICER HAS DISAL LOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE ESTIMATION OF P ROVISION FOR WARRANTY IS NOT BASED ON ANY PREVIOUS DATA. ON APPE AL THOUGH THE ASSESSEE HAS FURNISHED CONCERNED DETAILS AND CLAIM THAT THE PROVISION FOR WARRANTY IS BASED ON THE ACTUAL EXPENSE INCURRE D IN THE EARLIER YEARS HOWEVER THE COMMISSIONER OF INCOME TAX(APPEA LS) HAS NOT DISCUSSED THE FACT AND ASPECT WHETHER THE PROVISION IS BASED ON RELIABLE ESTIMATES OR NOT. THE DECISION OF HONBLE SUPREME C OURT IN CASE OF ROTORK CONTROLS INDIA PVT. LTD. VS CIT (SUPRA) HAS BEEN CONSIDERED BY THE HONBLE MADRAS HIGH COURT IN THE RECENT DECISIO N IN CASE OF RENOWNED AUTO PRODUCTS MFRS. LTD. VS ITO 354 ITR 1 27 IN PARA 12 & 13 AS UNDER: NO DOUBT THE LEARNED COUNSEL FOR THE ASSESSEE REL IED ON THE DECISION OF THE APEX COURT REPORTED IN ROTORK CONTR OLS INDIA P. LTD. V. CIT [2009] 314 1TR 62 (SC) TO SUBSTANTIATE HIS CONTENTION THAT THE ESTIMATED PROVISION FOR WARRANT Y COST IS ALLOWABLE. THE VERY SAME DECISION WAS CONSIDERED BY THE DIVISION BENCH OF THIS COURT IN CIT V. FORBES CAMPB ELL FINANCE LTD. CF. C. (A.) NOS. 148 TO 155 OF 2005 DATED JUL Y 9 2012) SINCE REPORTED IN [2013] 352 ITR 602 (MAD) WHEREIN IT WAS OBSERVED AT PARAGRAPHS 14 AND 16 AS FOLLOWS (PAGES 607 AND 608): WE REJECT THE CLAIM OF THE ASSESSEE ON BOTH COUNTS . AS FAR AS THE RELIANCE PLACED ON THE DECISION REPORTED IN ROT ORK CONTROLS INDIA P. LTD. V. CIT [2009] 314 1TR 62 (SC ) IS CONCERNED IN CONSIDERING THE CLAIM ON A PROVISION MADE FOR WARRANTY CLAIM THE APEX COURT HELD THAT A PROVISI ON IS RECOGNISED WHEN: (A) AN ENTERPRISE HAS A PRESENT OB LIGATION AS A RESULT OF A PAST EVENT; (B) IT IS PROBABLE THAT A N OUTFLOW OF RESOURCES WILL BE REQUIRED TO SETTLE THE OBLIGATION ; AND (C) A RELIABLE ESTIMATE CAN BE MADE OF THE AMOUNT OF THE ITA NO. 42 42 42 42/M/2012 /M/2012 /M/2012 /M/2012 & 8595 & 8595 & 8595 & 8595/M/2011 /M/2011 /M/2011 /M/2011 ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD . 15 OBLIGATION. IF THESE CONDITIONS ARE NOT MET NO PRO VISION CAN BE RECOGNIZED.. THUS THE APEX COURT POINTED OUT THAT THE PROVISION HAS TO BE MADE BASED ON RELIABLE ESTIMATION OF THE OBLIGATION S. UNLESS THE THREE CONDITIONS RECOGNISING THE LIABILITY ARE SATISFIED THE CLAIM COULD NOT BE AUTOMATICALLY ALLOWED AS A PROVI SION MADE ON A HISTORICAL TREND. AFTER OBSERVING SO THE HONBLE DIVISION BENCH FURT HER HELD AT PARAGRAPH 18 THAT THE PROVISION FOR SERVICE CHARGES PAYABLE BY THE ASSESSEE BY WAY OF WARRANTY PROVISION WAS NO T MADE ON ANY SCIENTIFIC DATA. BY APPLYING THE FACTS OF TH E CASE TO THE LAW DECLARED BY THE APEX COURT IT WAS FURTHER OBSE RVED THEREIN THAT THE PROVISION MADE WAS ONLY ON AD HOC BASIS WHICH WAS A FACT RECORDED BY THE TRIBUNAL. HERE ALS O THE COMMISSIONER AS WELL AS THE TRIBUNAL CATEGORICALLY FOUND THAT THE ASSESSEE HAD NOT PROVED THE PROVISION OF WARRAN TY EXPENSES BASED ON ANY SCIENTIFIC METHOD IN SUCH CIRCUMSTANCES THE ASSESSEE CANNOT PLACE RELIANCE O N THE DECISION OF THE HONBLE SUPREME COURT REPORTED IN R OTORK CONTROLS INDIA P. LTD. V. CIT [2009] 314 ITR 62 (SC ) AS THE FACTS ARE TOTALLY DISTINGUISHABLE. EVEN OTHERWISE T HE ASSESSEE HAS TO PASS THROUGH THE TRIPLE TEST AS DECLARED THE REIN IN ORDER TO SUCCEED IN HIS CLAIM ON PROVISION FOR WARRANTY. IN THE ABSENCE OF ANY SUCH FINDING IN ITS FAVOUR SATISFYIN G THE SAID TRIPLE TEST THE ASSESSEE CAN NOT RELY ON THE SAID DECISION OF THE APEX COURT. WE DO NOT FIND ANY MERITS IN THE AP PEAL AND THEREFORE BOTH THE QUESTIONS OF LAW ARE ANSWERED A GAINST THE ASSESSEE. ACCORDINGLY THE TAX CASE APPEAL IS DISMI SSED. NO COSTS. 21. ACCORDINGLY WE SET A SIDE THIS ISSUE TO THE RE CORD OF THE ASSESSING OFFICER TO DECIDE THIS ISSUE AFTER EXAMIN ATION OF RELEVANT FACTS AS WELL AS IN LIGHT OF THE DECISION ON THIS POINT. SINCE THE FINDING ON THE ISSUE OF WARRANTY PROVISION UNDER NORMAL COMPUTATIO N OF INCOME WILL HAVE BEARING ON THE COMPUTATION OF BOOK PROFIT U/S 115JB THEREFORE WE REMIT THIS ISSUE OF ADJUSTMENT U/S 115JB TO THE REC ORD OF AO FOR DECISION THE SAME AS PER LAW. ITA NO. 42 42 42 42/M/2012 /M/2012 /M/2012 /M/2012 & 8595 & 8595 & 8595 & 8595/M/2011 /M/2011 /M/2011 /M/2011 ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD ZINSER TEXTILE SYSTEMS PVT. LTD . 16 22. IN THE RESULT THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED AND THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PU RPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD JULY 2013 / -.% 0 1 $2 3 RD . SD/- SD/- ( . . ) ! (P. M. JAGTAP) ACCOUNTANT MEMBER ( ' ) # ! (VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 3 RD JULY 2013 SUBODH COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER