PRASHANT PACKAGING PVT.LTD,PATNA vs. DCIT/ACIT, CIR-2, PATNA, PATNA

ITA 644/PAT/2024Status: DisposedITAT Patna21 April 2025AY 2018-1910 pages
AI SummaryN/A

What did the Tribunal hold?

The Tribunal allowed the assessee's appeal, directing the AO to delete the disallowance made under Section 40A(3) of the Act. It was held that the bonus payment was made within the time allowed under the Payment of Bonus Act, 1965, and is deductible under Section 43B, given that the genuineness of the payments and the identity of the recipients were not disputed. The Tribunal emphasized that Section 40A(3) is a preventive measure against tax evasion and unaccounted money, which was not the case here.

What were the facts?

The assessee, Prashant Packaging Pvt. Ltd., filed its Income Tax Return for AY 2018-19, which was selected for limited scrutiny. The Assessing Officer (AO) disallowed Rs. 5,15,169/- under Section 40A(3) of the Income Tax Act for cash payment of bonus to employees, a decision subsequently confirmed by the CIT(A). The assessee then preferred an appeal before the Income Tax Appellate Tribunal.

What were the issues?

Whether disallowance of cash bonus payments to employees under Section 40A(3) of the Income Tax Act is justified when the genuineness of the transactions and identity of the recipients are not disputed.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 40A(3),Section 43B

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Cases cited in this judgment(4)Show list

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Income Tax Appellate Tribunal, “DB” BENCH: PATNA

Before: Shri Rajesh Kumar& Shri Pradip Kumar Choubey]

Per Pradip Kumar Choubey, JM: This is the appeal preferred by the assessee against the order of Commissioner of Income Tax (Appeal)-NFAC, Delhi (hereinafter referred to as the Ld. CIT(A)] dated 24.10.2024 for AY 2018-19. 2. Brief facts of the case of the assessee are that the assessee being a company filed its return of income for AY 2018-19 declaring total income of Rs. 84,55,050/-. The case of the assessee was selected for limited scrutiny on the issue of payment of bonus or commission to the employee and assessmen

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