THE CHODAVARAM CO OPERATIVE SUGARS LIMITED,VISAKHAPATNAM vs. DCIT/ACIT, CIRCLE-3(1), VISAKHAPATNAM

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ITA 543/VIZ/2025Status: DisposedITAT Visakhapatnam05 December 2025AY 2018-19Bench: the Ld.AO. The Ld.AO after perusing the details furnished by the assessee observed that the assessee has paid bonus amount of Rs.1,27,03,496/- during the F.Y.2017-18 on various dates from April 2017 to September 2017. The Ld.AO observed that generally, bonus is declared during Diwali season and paid accordingly and therefore, concluded that the bonus amount of Rs.1,27,03,490 does not pertain to the impugned assessment year and therefore disallowed the same.7 pages

AI SummaryAllowed

Facts

The assessee, The Chodavaram Co-operative Sugars Limited, had bonus payments of Rs.1,27,03,490/- disallowed by the Assessing Officer, reasoning that the bonus pertained to previous years (F.Y.2017-18) and not the impugned assessment year (AY 2018-19). The Commissioner of Income Tax (Appeals) confirmed the disallowance.

Held

The Income Tax Appellate Tribunal held that Section 43B(c) of the Income Tax Act, 1961, allows for the deduction of bonus payments in the assessment year when the payment is actually made to the employees, irrespective of the previous year in which the liability was incurred. Since the bonus payments were made during the impugned assessment year, they are allowable.

Key Issues

Whether bonus payments made in the current assessment year, pertaining to liabilities from earlier years, are deductible under Section 43B(c) of the Income Tax Act, 1961.

Sections Cited

143(3), 142(1), 250, 69C, 43B(c), 36(1)(ii), 139, 28

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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM

आदेश की प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:-

1. 1. निर्धाररती/The : The Chodavaram Co-operative Sugars Limited, Govada, Chodavaram, Govada Assessee S.O., Visakhapatnam 2. रधजस्व/ : The DCIT/ACIT, Circle-3(1), The Visakhapatnam Revenue 3. The Principal Commissioner of Income Tax, Visakhapatnam 4. नवभधगीय प्रनतनिनर्, आयकर अपीलीय अनर्करण / DR,ITAT, Visakhapatnam.