TaxTMI 
TaxTMI 
2018 (3) TMI 1347
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.... Rs. 1,53,95,399/- made by the A.O on account of disallowance of Commission paid to the Managing Director u/s 36(1)(ii) of the Income Tax Act, 1961." C.O No. 5224/DEL/2014 1. The Ld.CIT(A) erred in law and on facts in upholding ad-hoc disallowance of Rs. 92,125 out of foreign travel expenses of directors as personal in nature. 2. The Ld.CIT(A) erred in law and on facts in upholding the ad-hoc disallowance of Rs. 3,00,000/- out of the HRA of Rs. 12,00,000/- paid to Managing Director as excessive in nature." 3. The assessee is engaged in the business of manufacturing of Fin and Tube Type Cooling & condensing coil for all types of Air-Conditioners and Refrigeration's. Assessee filed return of income declaring an income of Rs. 16....
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....pus available for distribution as dividend. Since the commission worked out as a certain percentage of the net profit /turnover and so it cannot be said to be a part of a salary. The Assessing Officer held that it is participation in the profits of the company. Thus, the Assessing Officer held that the commission paid to the Directors was otherwise payable to them as profit or dividend and this commission of Rs. 1,53,95,399/- and the same is not allowable as per the provisions of section 36(l)(ii) of the Income Tax Act, 1961 and disallowed the sum of Rs. 1,53,95,399/- and added back to the total income of the assessee. The Assessing Officer also made addition of Rs. 92,125/- ie. of 20% of total foreign travel expenses and also made an addit....
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....11. The Ld. AR further submitted that during the present Assessment Year, there was no travel with the family. 7. We have heard both the parties and perused the material available on record. The Revenue has filed appeal in respect of addition of Rs. 1,53,95,399/- on account of commission paid to the Managing Director u/s 36(1) (ii) of the Income Tax Act. The CIT(A) allowed the said disallowance as similar disallowance were allowed in assessment year 2008-09, 2009-10 and 2010-11 by the Hon'ble Delhi High Court in assessee's own case. The Hon'ble High Court held that the disallowance made on account of commission to Managing Director and to a whole time Director under Section 36(1)(ii) of the Act was correctly deleted by the ITAT. Thus, the ....