ITAT Chennai Deletes Bonus Disallowance Wrongly Reported in Tax Audit Report

Ponnusamy Raja Vs ITO (ITAT Chennai) In the case of Ponnusamy Raja vs. Income Tax Officer (ITO), the Chennai bench of the Income Tax Appellate Tribunal (ITAT) addressed the disallowance of a ₹2.26 lakh bonus by the Assessing Officer (AO). The AO had treated this amount as a dividend, not a business expense, based on an error in the assessee’s audit report under Section 44AB of the Income Tax Act, 1961. The issue arose because the tax audit report, specifically in Form 3CD, Column 20(a), had incorrectly stated that the bonus was a payment “otherwise payable as profit or dividend.&...