Bonus Paid as CTC cannot be Disallowed Under Section 43B for Non-Payment at year end

Renault Nissan Automotive India Private Limited Vs DCIT (ITAT Chennai) Background: The Assessing Officer (AO) noted that Renault Nissan Automotive India Pvt. Ltd. had unpaid bonuses of ₹277.83 lakhs as of March 31, 2010. The AO disallowed this amount under Section 43B of the Income Tax Act, which mandates that certain deductions (including bonus) must be paid before the due date for claiming them. Assessee’s Argument: The assessee argued that the unpaid amount was part of the variable pay, which is a component of the employees’ Cost to Company (CTC), and dependent on individual p...