ACIT Vs Maersk Line India Pvt. Ltd. (ITAT Mumbai)
The Revenue appealed against the order dated 17.07.2025 passed by the Commissioner of Income Tax (Appeals) for Assessment Year 2020-21, challenging relief granted to the assessee on disallowances under Sections 40(a)(i) and 40(a)(ia) of the Income-tax Act, 1961, and the deduction claimed under Section 80G in respect of Corporate Social Responsibility (CSR) expenditure.
The assessee, engaged in providing shipping agency services in India to its parent company, Maersk A/S, Denmark, filed its return declaring total income of ₹14,38,01,310. During assessment proceedings, the Assessing Officer (AO) noticed that the assessee had claimed deductions of ₹2,26,24,534 and ₹2,81,527, which had been disallowed in Assessment Year 2019-20 under Sections 40(a)(i) and 40(a)(ia) on the basis that tax deducted at source (TDS) had been deducted and deposited during the relevant assessment year.
The assessee explained that it consistently created provisions for expenses on a monthly basis, reversed them on the first day of the succeeding month, and had made year-end provisions where payees were not identified. Since tax could not be deducted in such cases, it had suo motu disallowed 30% of the provision under Section 40(a)(ia) and 100% under Section 40(a)(i) in Assessment Year 2019-20. After reversing those provisions in the year under consideration, it claimed the corresponding deductions, contending that any further disallowance would amount to double disallowance.
