ICICI Securities Limited Vs DCIT (ITAT Mumbai)
Reversal of Bonus Provision Allowed to Prevent Double Taxation; Year-End Brokerage Provision Is Accrued Liability, Not Contingent;Section 80G Deduction Allowed Despite CSR Nature of Donation: ITAT Mumbai
Material Facts: The assessee filed its return of income for Assessment Year 2016–17 on 29.11.2016 declaring total income of Rs.418,65,47,830. The return was processed under Section 143(1) and assessment under Section 143(3) was completed on 22.12.2018 accepting the returned income. Subsequently, reassessment proceedings were initiated under Section 147. An order under Section 148A(d) and notice under Section 148 were issued on 30.07.2022, and reassessment was completed under Section 147 read with Section 144B on 29.05.2023.
The reassessment originated from Revenue Audit objections relating to:
- deduction of Rs.7,59,50,808 claimed on reversal of bonus provision;
- deduction under Section 80G in respect of donations while CSR expenditure of Rs.4.70 crore had been incurred; and
- brokerage and commission expenditure, including year-end provision of Rs.7,82,01,556, with reference to tax deduction at source.
Procedural History
The Assessing Officer disallowed the deduction claimed on reversal of bonus provision, disallowed the year-end brokerage and commission provision of Rs.7,82,01,556, and did not allow the full deduction claimed under Section 80G.
The Commissioner of Income Tax (Appeals) substantially upheld the disallowance of the bonus provision and brokerage provision. Regarding Section 80G, the Commissioner (Appeals) directed the Assessing Officer to verify the documents and grant deduction accordingly.
