2025 (2) TMI 1732

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....er [AO] u/s. 143(3) r.w.s 143(3A) & 143(3B) of the Income-tax Act, 1961 (hereinafter "the Act") on 16.03.2021. 2. The ground of appeal raised by the assessee are as under: "1. Order of the NFAC / Commissioner of Income tax (Appeals) is contrary to law, facts and in the circumstances of the case. 2. The NFAC/CIT(A) erred in confirming the disallowance of 20% of the performance linked incentive expenditure amounting to Rs. 2,02,49,170/-. 2.1 The NFAC/CIT(A) ought to have appreciated that the appellant has incurred the expenditure on performance linked incentives given to around 1500 field managers, executives and representatives as sales promotion expenses during the course of business hence no adhoc disallowance....

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....to eat products, printing and publishing, hospital care products, artificial heart valves and trading in consumer products. The assessee has filed its return of income on 30.03.2019 admitting total income of Rs. 29,66,42,700/-. The A.O in the order passed u/s. 143(3) of the Act has made the disallowance of 20% of the performance linked incentive of Rs. 10,12,45,858/- u/s. 37(1) of the Act on the ground that documentary evidences of the claim were not produced. The A.O has also made disallowance of expenditure on design and development of e-commerce portal on the ground that the expenditure incurred is capital expenditure. However, the A.O has allowed depreciation @ 60% under the category of computers and computer software. Aggrieved, the as....

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.... company and the employees. The Ld. AR has argued that all the payments are genuine and recorded in books of account and TDS u/s 192 of the Act has also been deducted on all such payments. 5.4 We find that the only reason for disallowances of incentive paid to employees by both the authorities was that assessee has not submitted necessary documents, we therefore deem it fit to restore the matter back to the file of A.O. The assessee is directed to submit all the necessary documents in support of the expenditure before A.O. who will provide proper opportunity of being heard to assessee. The ground is accordingly allowed. 6. Ground No.3 is against confirming the addition made by A.O of Rs. 41,83,793/- regarding the expenditure incurred ....