Unimech Aerospace and Manufacturing Limited Vs ITO (ITAT Bangalore)
The Income Tax Appellate Tribunal (ITAT), Bangalore, allowed the assessee’s appeal on the issue of deduction of bonus paid under Section 43B of the Income Tax Act, holding that a mismatch between the Income Tax Return (ITR) and Form 3CD alone could not justify denial of a deduction where the payment was genuine and supported by evidence.
The assessee, engaged in the manufacture of tooling for the aerospace, defence and power generation industries, filed its return of income for Assessment Year (AY) 2023-24 declaring a total income of ₹3,53,26,790. The return was processed under Section 143(1), and the Centralised Processing Centre (CPC) made an addition of ₹15,15,767, increasing the total income to ₹3,68,42,560.
The dispute arose from a provision of ₹17,91,225 created towards bonus payable for Financial Year 2021-22, relevant to AY 2022-23. The provision was shown as a long-term provision in the books of account, and since the amount remained unpaid during that year, the assessee itself disallowed the entire provision under Section 43B while computing income for AY 2022-23. Subsequently, the assessee paid ₹15,15,767 to employees on various dates between 3 October 2022 and 12 October 2022 and claimed deduction of the amount in the return for AY 2023-24.
