2010 (12) TMI 606

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....ompany ignoring that the assessee failed to furnish any evidence with respect to the services rendered for which the said payments are made, and that these amounts were part of profits or dividend payable and hence not allowable as deduction to the assessee.   2. The ld.CIT(A) has erred in law and on facts in deleting addition of Rs.13725/- on account of disallowance of extra depreciation claimed by the assessee on computer peripherals ignoring that as per IT Rules 60% depreciation is allowable only on computer and computer software and not on computer peripherals/accessories."   3. Apropos ground No.1, the facts are as under. The assessee in pursuance of a board resolution dated 3.8.2006 has resolved that "Incentive will be....

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....us and could have been paid as profit or dividend which is not done, therefore the said amount was disallowed. Learned CIT(A) has allowed such amount to the assessee following the decision of ITAT in the case of ACIT vs. Bony Polymers - 36 SOT 456 wherein it has been held that Section 36(1)(ii) provides that commission will not be allowed as deduction if it had not been paid so, it would be paid as profits or dividend. There being no basis or material or evidence brought on record by the AO to support such contention that commission would have been paid to the shareholders and in absence of such material AO cannot presume that had this commission not been paid, this would have necessarily been paid as dividend to the shareholders. Companies....

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....e AO pleaded that addition was rightly made by the AO and CIT(A) has wrongly deleted the same.   6. On the other hand, relying upon the order of CIT(A), it was pleaded by learned AR that the facts of the assessee's case are similar to the facts in the case of Bony Polymers (supra), hence CIT(A) was right in deleting the disallowance and his order should be upheld.   7. We have carefully considered the rival submissions in the light of material placed before us. The payments to the directors of the assessee company are supported by a board resolution. The remuneration given to them is based on sales. The relevant evidence regarding sales in the respective allocated territory allotted to the directors were also filed. It is no....