Case Law Details
JCIT Vs S.V. Balasubramani HUF (ITAT Chennai)
Introduction: This article discusses an income tax appeal filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-18, Chennai, dated 08.02.2023, related to the assessment year 2013-14. The appeal revolves around the disallowance of bonus payments and the disallowance of cash expenditure under section 40A(3) of the Income-tax Act, 1961.
Grounds of Appeal: The assessee raised several grounds of appeal, challenging the Commissioner of Income Tax (Appeals)’s order. The primary issues include the Commissioner’s decision to restrict the unproved bonus payments claim, the deletion of disallowance made under section 40A(3) for bonus payments, and the overall assessment of the bonus paid to employees.
Background: The assessee, engaged in the business of textiles and ready-made garments, filed its return of income for the assessment year 2013-14. The assessment was completed under section 143(3) of the Income-tax Act in 2021, with additions made for adhoc disallowance of bonus paid to staff and disallowance of cash expenditure exceeding prescribed limits under section 40A(3).
Assessment of Bonus Payments: The Assessing Officer disallowed a portion of the bonus paid to staff, asserting that the assessee failed to produce supporting evidence for a sum of Rs. 30,67,785 out of the total bonus paid. The Commissioner of Income Tax (Appeals) partially allowed the appeal, restricting the disallowance to 20% of the unproved amount. The article notes that the Revenue challenged this decision but failed to provide evidence countering the Commissioner’s findings. Consequently, the Tribunal upheld the Commissioner’s decision on this issue.
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