Functional comparability governs software-service benchmarking: dissimilar companies are excluded, while related-party filters, margins and working-ca...
ITAT overturned the CIT(A)'s finding that the Provision for Claim Pay Out was created on an adhoc basis. The Tribunal determined that the assessee had established an ascertained liability based on an independent actuarial report, considering the Trust Deed, Scheme, and applicable agreement provisions. The provision created for AY 2019-2020 was less than the actual pay out, with only a 2.21% aggregate difference between provisions and actual payouts from AY 2016-2017 to AY 2022-2023. The assessee has since been granted tax exemption under s.10(46B) by the Finance Act, 2023. The ITAT directed the AO to grant deduction for the Provision for Claim Pay Out created during the relevant previous year. Appeal allowed.
ITAT overturned the CIT(A)'s finding that the Provision for Claim Pay Out was created on an adhoc basis. The Tribunal determined that the assessee had established an ascertained liability based on an independent actuarial report, considering the Trust Deed, Scheme, and applicable agreement provisions. The provision created for AY 2019-2020 was less than the actual pay out, with only a 2.21% aggregate difference between provisions and actual payouts from AY 2016-2017 to AY 2022-2023. The assessee has since been granted tax exemption under s.10(46B) by the Finance Act, 2023. The ITAT directed the AO to grant deduction for the Provision for Claim Pay Out created during the relevant previous year. Appeal allowed.
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