HONEYWELL INTERNATIONAL INDIA PRIVATE LIMITED,DELHI vs. DCIT CIRCLE-10(1), DELHI

This assessee’s appeal raises the following substantive grounds: “Appeal under section 253(1)(a) of the Income Tax Act, 1961 (hereinafter referred to as the "Act"), against the order dated 19 February 2024 passed by National Faceless Appeal Centre, Commissioner of Income Tax (Appeals), Addl/JCIT(A)-12 Mumbai under Section 250 of the Act in relation to intimation order passed under section 143(1) of the Act.

On the facts and circumstances of the case and in law the Hon'ble Commissioner of Income Tax (Appeals) ['Hon'ble CIT(A)] has erred in confirming the disallowance of INR 56,916,238 under Section 40(a)(i) of the Act without appreciating the facts that INR 56,916,238 relates to payments made to residents, hence only INR 17,074,871 (i.e., 30% of INR 56,916,238) is required to be disallowed instead of INR 56,916,238. 2. That on the facts and circumstances of the case and in law, The Ld. AO/Hon'ble CIT(A) failed to appreciate that the Appellant has correctly disallowed expenses of INR 17,074,871 (being 30% of INR 56,916,238) in the income tax return as per provisions of section 40(a)(ia) of the Act.

That on the facts and circumstances of the case and in law, the Appellant has inadvertently disclosed the amount of INR 56,916,238 in clause 21b(i) [relating to non-residents] instead of clause 21b(ii) [relating to residents] of the Tax Audit Report ('TAR') filed online on e- filing portal resulting into variance between the return of income (ITR- 6) vis-a-vis 143(1) intimation order. However, bona fide claim should not be denied merely because the Appellant has made incorrect reporting in online Tax Audit Report.

On the facts and circumstances of the case and in law, The Hon'ble CIT(A) failed to appreciate that it has correctly disclosed the amount of INR 56,916,238 in clause 21b(ii) [relating to residents] of the physically signed tax audit report uploaded as an attachment along with online Tax Audit Report on income tax e filing portal. 3 | P a g e

On the facts and circumstances of the case and in law the Hon'ble CIT(A) has erred in confirming the disallowance of employee's contribution to Labour Welfare Fund ('LWF') of INR 8,930. 6. On the facts and circumstances of the case and in law the Hon'ble CIT(A) has failed to appreciate that the Appellant has already disallowed the said amount of INR 8,930 in the income tax return and therefore disallowance made in 143(1) intimation is leading to double disallowance of the same amount.

Coming to the assessee first and foremost substantive ground challenging section 40(a)(ia) disallowance, learned counsel’s solitary substantive argument is that its corresponding computation had already disallowed the same @30%; involving payments to the resident recipients going by the statutory substitution in the Act vide Finance Act, 2014 w.e.f. 01.04.2015. And that, the same has been again disallowed @ 100%. The Revenue is equally fair in not disputing the assessee’s foregoing fair submissions that the impugned disallowance involving resident payees, has to be computed @ 30% only. We thus direct the learned 4 | P a g e