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TMI Blog2022 (5) TMI 1525X X X X Extracts X X X X X X X X Extracts X X X X ..... is allowed in favour of the assessee. Disallowance u/s. 43B - provision made towards bonus and long-term service awards along with the amounts actually paid and claimed as a deduction in the return of income - HELD THAT:- No argument that the assessee is entitled for claiming deduction u/s. 43B with respect to provision made for bonus and long-term service awards based on the actual amount paid on or before the due date for filing the return of income. The auditors, Price Waterhouse Co., have verified the actual amount paid by the assessee, have certified the same in the tax audit report in Form 3CD stating that the assessee has paid the said amounts before the due date for furnishing the return of income u/s.139(1). Hence we ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Industries Corporation Japan holding 98.85% of stake and the balance 1.15% is held by Kirloskar Systems Ltd India. As part of its business, the assessee had the following international transactions with its AE :- Purchase of raw materials and components. Purchase of fixed assets. Sale of finished goods. Payment of Professional and consultancy charges. Reimbursement of expenses received communication expenses 4. In this appeal we are concerned with the determination of Arm s Length Price (ALP) in the auto components manufacturing segment. Pursuant to the order of the DRP, the only relief which the assessee seeks is with regard to the computation of profit level indicator (PLI) as done by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fected the profitability of assessee under their provisions. Accordingly we set aside the impugned orders of the revenue authorities on this issue and restore the matter to the file of AO/TPO to carry out the exercise as stated above. Assessee should be given new opportunity. However we make it clear that if any adjustment is required to be made the same is to be restricted as directed by DRP in Paras 3.1.3 (Ground No.2) intended to be reopened. AO/TPO is directed accordingly. Ground No.3 is allowed for statistical purposes 6. We also notice that the Hon ble Karnataka High Court has dismissed the appeal of the revenue against the above order of the Tribunal in ITA No.229/2017 [2019] 106 taxmann.com 309. 7. Respectfully following th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and if so no disallowance u/s. 43B should be made. However in the final assessment order, the AO sustained the disallowance stating that the auditors report itself has certified that the assessee had only made payment of Rs 65,35,061 and not the amount as claimed by the assessee. Aggrieved the assessee is in appeal before the Tribunal. 10. The ld. AR submitted that the assessee has created a provision for bonus amounting to Rs.55,023,516 as reflected in clause 26(i)(B)(a) and clause 26(i)(B) (b) of the tax audit report in Form 3CD (page 426 of paper book). The assessee also created provision for longterm service awards for Rs.3,37,270 as reflected in clause 26(i)(B)(b). Out of the said amount the assessee had paid Rs.4,15,30,847 out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reference to Form 3CD Remarks Clause 26(i)(A)(a) and Clause 26(i)(A)(b) Opening balance of provision for bonus disallowed in earlier years under section 43B Add: Provision created during the 55,023,516, [41,530,847 plus Clause 26(i)(B)(a) and Clause Provision for bonus disallowed in the ROI of AY AY 2017-18 13,492,669] 26(i)(B)(b) 2017-18 Less: Payment towards opening balance within FY 2,116,165 Clause 26(i)(A)(a) Claimed as an admissible expense under section 43B in the ROI of AY 2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o employee as bonus or commission debited to profit and loss account of the previous year but disallowable under section 43B. - Provision for bonus 55,023,516 Clause 26(i)(B)(a) and Clause 26(i)(B)(b) - Provision for long term service award 337,270 Total amount reported in Part A - OI - # 11(c) 55,360,786 13. The learned AR during the course of hearing drew our attention to the relevant clauses in form 3CD and also the computation of income where the assessee has made the disallowances of the entire provision and made claim u/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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