ITA Nos. 1196, 1226 & 1229/Bang/2024

Parties Involved

Facts Summary

The assessee, Algonomy Software Pvt. Ltd., is a domestic company engaged in providing software support and development services and ITeS. For the assessment years 2016-17 to 2018-19, the Assessing Officer (AO) disallowed sales commission paid to the assessee's US subsidiary, Manthan Systems Inc., and other subsidiaries under section 40(a)(i) of the Income Tax Act, 1961, for not deducting tax at source. The AO also disallowed ESOP expenses and provision for doubtful debts. The Commissioner of Income Tax (Appeals) deleted these disallowances, leading to the Revenue's appeal before the Tribunal.…

Legal Issues

• 1. Disallowance under section 40(a)(i) of the Income Tax Act, 1961 for not deducting tax at source on sales commission paid to the US subsidiary.
• 2. Disallowance of ESOP expenses.

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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