2026 (2) TMI 1123

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....its return of income on 30.09.2023 declaring total income of Rs. 8,08,16,101/- after claiming Chapter VIA deduction of Rs. 1,13,93,754/- u/s 80IA of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). The case was selected for scrutiny under CASS to verify the following reason: "First Year of Deduction claimed u/s 80IA/80IAB/80IAC/80IBA" 3. Accordingly statutory notice u/s 143(2) of the Act was issued and served on the assessee. Thereafter, the Assessing Officer issued notice u/s 142(1) of the Act along with a questionnaire in response to which the assessee filed the requisite details. 4. The Assessing Officer during the course of assessment proceedings noted that the assessee during the impugned assessment year ....

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....are trading and investment business is of Rs. 1,67,78,718/- and that of power generation business is Rs. 2,45,10,036/- and therefore, the salary is to be allocated in the ratio of the turnover. 6. However, the Ld. CIT(A) / NFAC was not satisfied with the arguments advanced by the assessee and held that 1/4th of salary payment of Rs. 38,64,803/- i.e. Rs. 9,66,201/- is to be allocated to power generation unit and Rs. 28,98,602/- to be allocated to share trading unit. 7. Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal by raising the following grounds: 1] The learned CIT(A) erred in making a disallowance of Rs. 2,62,396/- out of the total salary expenditure of Rs. 41,27,199/- on t....

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....nd share trading unit and the disallowance of Rs. 2,62,396/- out of total salary expenditure of Rs. 41,27,199/-. 9. Referring to the copy of tax audit report filed in the paper book from pages 104 to 122, the Ld. Counsel for the assessee drew the attention of the Bench to clause 26 of the report and submitted that the assessee has suo motu disallowed bonus / commission to employees of Rs. 2,42,998/- as per provisions of section 43B(c) of the Act. 10. Referring to page 83 of the paper book he drew the attention of the Bench to the statement of trading account for the year ending 31.03.2023 according to which the assessee has claimed salary payment of Rs. 41,27,199/-. 11. Referring to page 178 of the paper book, he submitted that the....

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....r generation unit and share trading business in the ratio of 50:50. We find in appeal the Ld. CIT(A) / NFAC on verification of the details found that the assessee has established salary payment to the tune of Rs. 38,64,803/-. He, therefore, held that out of the salary of Rs. 41,27,199/- an amount of Rs. 38,64,803/- is allowable and Rs. 2,62,396/- is not allowable. 15. So far as the allocation of salary to share trading business and power generation business are concerned, he directed the Assessing Officer to allocate 1/4th of salary payment of Rs. 38,64,803/- i.e. Rs. 9,66,201/- to be allocated to power generation unit and the remaining amount of Rs. 28,98,602/- to be allocated to share trading unit. It is the submission of the Ld. Couns....