Adani Tracks Management Vs. AO-CPC (Bangalore) Service Limited
Parties Involved
Facts Summary
The assessee, Adani Tracks Management, filed its return of income for the assessment year 2020-21 declaring nil income. After adjusting brought forward business losses and unabsorbed depreciation, the return was assessed by the Central Processing Centre, Bangalore (CPC) and disallowed a payment of gratuity under section 43B of the Income Tax Act for Rs. 9,27,889/-. The assessee had created provisions for gratuity and claimed Rs. 6,51,894/- towards gratuity expense for an employee, Mr. Ajay Bhatnagar, who was transferred to another concern. The Assessing Officer disallowed this claim, stating that it did not fall under section 40A(7) of the Act as there was no actual payment made. The assessee appealed this decision before the Learned Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, who partially allowed the claim by permitting the actual payment made to another employee, Mr. Neelesh Singh, but rejected the claim for Mr. Bhatnagar. The assessee then appealed to the Income Tax Appellate Tribunal.…
Decision in favour of
Assessee
Legal Issues
- 1. Whether the claim of Rs. 6,51,894/- towards gratuity expense is allowable under section 40A(7) and 43B of the Income Tax Act, 1961.
Judgment Outcome
Decided in favour of Assessee.
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