IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री रवीश सदू , माननीय न्याययक सदस्य एवं श्री एस बालाकृष्णन, माननीय लेखा सदस्य SHRI RAVISH SOOD, HON’BLE JUDICIAL MEMBER AND SHRI S BALAKRISHNAN HON’BLE ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No.543/Viz/2025 (निर्धारणवर्ा/ Assessment Year: 2018-19)

The Chodavaram Co-operative Vs. DCIT/ACIT Sugars Limited Circle-3(1)

Visakhapatnam Visakhapatnam PAN: AAAAT4375N (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent)

करदधतध कध प्रनतनिनर्त्व/ : Shri C.Subramanyam, CA Assessee Represented by रधजस्व कध प्रनतनिनर्त्व/ : Dr.Aparna Villuri, Sr.AR Department Represented by सुिवधईसमधप्तहोिेकीनतनि/ : 03/12/2025 Date of Conclusion of Hearing घोर्णध की तधरीख/ : 05/12/2025 Date of Pronouncement

ORDER

PER S BALAKRISHNAN, AM:

This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals) [“Ld.CIT(A)”], National Faceless Appeal Centre (“NFAC”), Delhi in DIN & Order No. ITBA/NFAC/S/250/2025-26/1080034604(1) dated 26.08.2025 arising out of the order passed u/s.143(3) of the Income Tax Act, 1961 (in short “the Act”), dated 27.02.2021 for the AY 2018-19.

2. Briefly stated, the facts of the case are that, the assessee filed its return of income on 31.10.2018. The case was selected for limited scrutiny on the following issues :

(i) Bonus or commission to employee (ii) Expenditure of personal nature The Ld.AO observed that as per the P&L account, the assessee has debited bonus amounting to Rs.1,30,31,150/-. The assessee submitted that the bonus was paid to the staff and workers for the F.Y.2017-18, thereafter, the Ld.AO issued notice u/s 142(1) on 14.01.2021. The assessee in response vide e-mail dated 20.01.2021 submitted four ledger accounts before the Ld.AO. The Ld.AO after perusing the details furnished by the assessee observed that the assessee has paid bonus amount of Rs.1,27,03,496/- during the F.Y.2017-18 on various dates from April 2017 to September 2017. The Ld.AO observed that generally, bonus is declared during Diwali season and paid accordingly and therefore, concluded that the bonus amount of Rs.1,27,03,490 does not pertain to the impugned assessment year and therefore disallowed the same.

3. On being aggrieved by the order of the Ld.AO, the assessee filed an appeal before the CIT(A). Before the Ld.CIT(A), the assessee submitted that the bonus was computed in accordance with the Payment of Bonus Act, 1965 as amended by the Payment of Bonus (Amendment) Act, 2015. It was submitted that the assessee has computed the arrears of bonus effective from 01.04.2014 and has paid in instalments to the employees. The Ld.CIT(A) observed that huge contradiction exists in the details furnished by the assessee and therefore, confirmed the disallowance made by the Ld.AO amounting to Rs.1,27,03,496/- by dismissing the appeal of the assessee.

4. On being aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before us by raising the following grounds :

1. That on the facts and in the circumstances of the case, the order passed u/s 143 of the Income-Tax Act, dt.27.02.2021, as upheld by the Ld.Commissioner of Income Tax (Appeals) u/s 250 vide order dt. 26.08.2025, is contrary to law and facts of the case and therefore unsustainable.

2. That the Ld.CIT(A) erred in law and on facts in sustaining disallowance of bonus payments aggregating to Rs.42,20,405/- (Rs.1,75,992/- paid on dt.25.05.2017 and Rs.40,44,403/- paid on 14.07.2017), on erroneous and unsubstantiated observations of manipulation, ignoring that the payments were genuine, duly recorded and allowable.

3. That the Ld.CIT(A) further erred in disallowing bonus of Rs.84,66,525/- without understanding the facts in the correct manner, inasmuch as when the actual payment date was dt.25.09.2017 and not dt.25.07.2017, as erroneously understood by Ld.CIT(A) especially, when the Board Resolution dt.30.08.2017 preceded the payment.

4. That the Ld.CIT(A) has erred in law and on facts in sustaining the disallowance