M/S. CPV ENGINEER PRIVATE LIMTIED ,HUBBALII vs. THE INCOME TAX OFFICER, WARD-1(1), HUBBALLI

ITA 1486/BANG/2024Status: DisposedITAT Bangalore02 December 2025AY 2014-15Bench: SHRI PRASHANT MAHARISHI (Vice President), SHRI KESHAV DUBEY (Judicial Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that sales commission paid to family members involved in the company's business was allowable, and notional interest on director's loan was not disallowable if interest-free funds were available. However, the provision for gratuity was confirmed as disallowed.

What were the facts?

The assessee company paid sales commission to family members of directors and gratuity. The Assessing Officer disallowed these expenses, and the CIT(A) upheld the disallowances. The assessee also took a loan from a director, and notional interest was disallowed.

What were the issues?

Whether sales commission paid to directors' family members and notional interest on director's loan are allowable expenses. Whether provision for gratuity is allowable.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 36(1)(v)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH : BANGALORE

Before: SHRI PRASHANT MAHARISHI & SHRI KESHAV DUBEY

For Appellant: Shri Narendra Sharma, Advocate
For Respondent: Shri N Baluswamy, Jt.CIT(DR)(ITAT), Bengaluru
Hearing: 11.09.2025Pronounced: 02.12.2025

Per Prashant Maharishi, Vice President

1.

ITA No.1486/Bang/2024 is filed by CPV Engineers Pvt. Ltd. (the assessee/appellant) for the assessment year 2014-15 against the appellate order passed by the National Faceless Appeal Centre, Delhi (NFAC) [ld. CIT(A)] dated 14.6.2024 wherein the appeal filed by the assessee against the assessment order passed u/s. 143(3) of the Income-

ITA Nos. 1486 & 1487/Bang/2024 tax Act, 1961 [the Act] dated 22.12.2016 by the ITO, Ward 1[1], Hubballi was party allowed. Therefore assessee is in appeal before us raising the following grounds:-

“1. The orders of the authori

The order continues below.

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