ACUITY KNOWLEDGE CENTRE (INDIA) PRIVATE LIMITED,BENGALURU vs. THE DEPUTY COMMISSION OF INCOME TAX, CIRCLE1(1)(1), BENGALURU , BENGALURU

ITA 2153/BANG/2024Status: DisposedITAT Bangalore31 December 2025AY 2014-15Bench: SHRI WASEEM AHMED (Accountant Member), SHRI SOUNDARARAJAN K. (Judicial Member)1 pages
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What did the Tribunal hold?

The Tribunal held that the executive gain sharing payment was a contingent liability and not deductible. However, it upheld the CIT(A)'s deletion of the addition related to expense reallocation, finding it illogical in a cost-plus model where costs and revenues move together.

What were the facts?

The assessee claimed expenditure towards an executive gain sharing plan, which the AO disallowed as a contingent liability. The Revenue appealed against the CIT(A)'s deletion of an addition made due to reallocation of common expenses between units, impacting Section 10AA deductions.

What were the issues?

Whether incentive payments for an executive gain sharing plan are deductible as revenue expenditure. Whether reallocation of common expenses between units impacts taxable income under a cost-plus model and affects Section 10AA deductions.

Which sections of the Income-tax Act were involved?

Section 37,Section 43B,Section 10AA,Section 145

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH : BANGALORE

Before: SHRI WASEEM AHMED & SHRI SOUNDARARAJAN K.

For Appellant: Ms. Mansa Ananthan, Advocate &, Shri Nirmal Mathew, Advocate
For Respondent: Dr. Divya K.J, CIT-DR

PER WASEEM AHMED, ACCOUNTANT MEMBER

These cross appeals filed by the assessee and the Revenue are directed against the order passed under section 250 of the Income Tax 1961 (hereafter the Act) by the learned Commissio

The order continues below.

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