ITAT allows appeal, directs deletion of disallowed bonus payment for business purposes. The ITAT allowed the appeal, directing the Assessing Officer to delete the disallowance of the bonus paid to Shri Ashutosh Sharma, amounting to Rs. ...
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ITAT allows appeal, directs deletion of disallowed bonus payment for business purposes.
The ITAT allowed the appeal, directing the Assessing Officer to delete the disallowance of the bonus paid to Shri Ashutosh Sharma, amounting to Rs. 9,26,66,708 for the assessment year 2015-16. The ITAT relied on previous years' decisions where similar disallowances were later deleted based on directions from the DRP and CIT(A), holding that the bonus was incurred wholly and exclusively for the purposes of business. As no distinguishing decision was presented, the ITAT followed precedent and ruled in favor of the assessee, deleting the impugned disallowance.
Issues: Disallowance of bonus paid to Shri Ashutosh Sharma under section 36(1)(ii) of the Income-tax Act, 1961.
Analysis: The appeal was filed against the order of the CIT(A)-2, New Delhi concerning the disallowance of a bonus paid to Shri Ashutosh Sharma amounting to Rs. 9,26,66,708 for the assessment year 2015-16. The Assessing Officer disallowed the bonus, and the CIT(A) upheld the decision. The assessee contended that similar disallowances were made in previous assessment years but were subsequently allowed based on directions from the Dispute Resolution Panel (DRP) and the CIT(A) in those years. The DR argued that the facts of the current case were different from previous years. However, upon reviewing the orders of the authorities and the directions given by the DRP in the previous assessment years, the ITAT found that for similar reasons, disallowances were made but later directed to be deleted. The ITAT cited the directions from the DRP and the CIT(A) in previous years where they held that the bonus paid to Shri Ashutosh Sharma should be allowed as it was incurred wholly and exclusively for the purposes of business. As no distinguishing decision was presented, the ITAT followed the decisions of previous years and directed the Assessing Officer to delete the disallowance. Consequently, the appeal of the assessee was allowed, and the impugned disallowance was deleted.
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