BODYCARE CREATIONS LIMITED,DELHI vs. DCIT, CPC, KARNATKA

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ITA 9548/DEL/2019Status: DisposedITAT Delhi02 August 2022AY 2017-183 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the assessee's return of income was subject to Section 92E, the extended due date under Section 139(1) was November 30, 2017. As the bonus payment was made before this date, it could not be disallowed under Section 43B.

What were the facts?

The assessee challenged the disallowance of bonus payment by the revenue. The revenue alleged non-payment of the bonus before the due date for filing the return of income under Section 139(1). The assessee contended that the payment was made before the extended due date applicable due to transfer pricing provisions.

What were the issues?

Whether the bonus payment made before the extended due date for filing a transfer pricing return is deductible under Section 43B.

Which sections of the Income-tax Act were involved?

Section 43B,Section 139(1),Section 92E

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “A” DELHI

Before: SHRI CHALLA NAGENDRA PRASAD & SHRI PRADIP KUMAR KEDIA

For Appellant: Ms. Kriti Bindal, CA
For Respondent: Shri Ishtiyaque, Sr.D.R

TAN/PAN: AADCB4442P (Appellant) (Respondent) Appellant by: Ms. Kriti Bindal, CA Respondent by: Shri Ishtiyaque, Sr.D.R. Date of hearing: 11 07 2022 Date of pronouncement: 02 08 2022 O R D E R PER PRADIP KUMAR KEDIA, A.M.: The captioned appeal has been filed at the instance of the assessee against the order of the Commissioner of Income Tax (Appeals)-II, New Delhi [‘CIT(A)’ in short] dated 29.08.2019 arising from the intimation order dated 19.11.2018 passed by the Assessing Officer (AO) under Section 143(1) of the Income Tax Act, 1961 (the Act) concerning AY 2017-18.

2.

As per its grounds of appeal, the assessee has challenged the disallowance of bonus payment amounting to Rs.30,66,187/- carried out by revenue by taking resort to Section 43B of the Act alleging non-payment of outstanding liability before due date of filing of return of income stipulated under Section 139(1) of the Act.

3.

We have heard the rival submissions on the issue. It is the case of the assessee that the return of income was filed on 30.11.2017 which is extended due date available to the assessee which is subjected to transfer pricing provisions under Section 92E of the Act. The assessee further contends that as per tax audit report, the outstanding payment was made on 18.11.2017, i.e., prior to extended due date available for filing the transfer pricing return which is 30.11.2017 under Section 139(1) of the Act. The transfer pricing report in form no.3CEB required to be furnished under Section 92E of the Act dated 28.11.2017 was adverted in this regard to support the extended due date available to transfer pricing returns under Section 139(1) of the Act.

4.

On appraisal of the facts and circumstances of the case, we find that the assessee has successfully demonstrated that the return of income filed by it has been subjected to provisions of Section 92E of the Act and consequently the due date available to the assessee is 30th November, 2017 relevant to Assessment Year 2017-18 in question in terms of Section 139(1) read with clause (aa) to Explanation-2 thereto. Consequently, impugned outstanding bonus claims to have been paid before 30th November, 2017, as vouched by tax audit report, cannot be disallowed under Section 43B of the Act. The action of the Revenue for resorting to disallowance under Section 43B thus cannot be countenanced in law. The assessee thus succeeds in its claim for deductibility of impugned bonus expense as claimed. The action of the CIT(A) is thus set aside and the Assessing Officer is directed to admit the bonus expense claimed by the assessee in accordance with law.

5.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open Court on 02/08/2022.

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