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| The Tax Publishers2021 TaxPub(DT) 0035 (Bang-Trib) INCOME TAX ACT, 1961
Section 43B
As per the proviso to section 43B, the amount paid before the due date for filing return of income out of the provision created is allowable as deduction. Admittedly, assessee had paid a sum out of the provision so created, before the due date for filing return of income. Accordingly, CIT(A) was justified in directing AO to restrict the disallowance being the amount not paid before the due date for filing return of income out of provision for retention bonus claimed by the assessee.
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Business deduction under section 43B - Applicability of provision - Provision for retention bonus - Disallowance of amount not paid before due date for filing return of income
The question arose for consideration as to whether CIT(A) was justified in restricting the disallowance of provision for retention bonus being the amount not paid before the due date for filing return of income. Held: Provisions of section 43B would also apply to the Provision for retention bonus. As per the provisions of section 43B, the provision for retention bonus is not allowable as deduction. But, as per the proviso to section 43B, the amount paid before the due date for filing return of income out of the provision so created is allowable as deduction. Admittedly, the assessee had paid a sum out of the provision so created, before the due date for filing return of income. Accordingly, CIT(A) was justified in directing AO to restrict the disallowance being the amount not paid before the due date for filing return of income out of provision for retention bonus claimed by the assessee.
REFERRED :
FAVOUR : Partly in favour of assessee.
A.Y. : 2013-14
IN THE ITAT, BANGALORE BENCH
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