TaxTMI 
TaxTMI 
TaxTMI 
2019 (7) TMI 1916
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....ete disregard of the legal position, judicial pronouncements and principle of consistency and the fact that the assessee has itself disallowed the amount considered, attributable to earning exempt income. 3. That the Ld. CIT(A) has further erred in confirming the disallowance made by the AO u/s 36(1)(ii) of bonus paid to Directors of Rs. 3,00,00,000/- on assumptions and surmises in complete disregard of the facts, evidence placed on record, explanations offered and has ignored the order of the CIT(A)-14, New Delhi for the A.Y. 2012-13. 4. Any other ground before or at the time of hearing." 2. The assessee company is engaged in the business of Air Chartered Services, Travel Agents, Tour Operators, Air & Transport for crew and the Tou....
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....a). Therefore, keeping in view the facts and circumstances of the case, we consider it just and proper to restore this issue to the file of Assessing Officer to consider the issue raised in the present appeal de novo as per the provisions of law after giving the assessee a reasonable opportunity of hearing. Therefore, we restore this issue to the file of Assessing Officer to reconsider and re-adjudicate the same after giving the assessee a reasonable opportunity of hearing." 3. During the year, the AO has acted in accordance with the provisions applicable to the assessment year 2008-09 onwards and determine the disallowance in accordance with the provisions of Rule 8D(2). Both the parties fairly accepted for the facts on record. Hence, we....
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....ch higher amount as dividend then the amounts paid to them as bonus.. Further in para number 19 the Honourable High Court also noted that the tribunal has found that having regard to the shareholding of each of the directors they would have got much higher amount has dividend than as bonus and there was no tax avoidance motive. Therefore the Honourable High Court held that the provisions of section 36 (1) (ii) does not prevent the allowance of the above sum. In the present case, it is admitted that both the directors who are paid identical amount of commission were also holding the identical quantum of the shareholding in the above company. As explained, company paid commission of INR 20,000,000, Rs. 1 Crore each to two shareholders, who ar....
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....he assessee company during the relevant year had paid commission to the tune of Rs. 40 lakhs to the three working directors. They are the only shareholders of the company and owned the entire share capital. During the assessment proceedings, the Assessing Officer asked the assessee to explain as to why the claim of expenditure on account of the commission should not be disallowed as the assessee earned substantial profits and the same amount could have been distributed as dividend. The assessee submitted that the commission was not in lieu of profit or dividend as the payments had been made to the directors for the hard work they had put in improving the profits of the company. Since it wanted to improve its net worth to attract FIIs the co....
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.... those cases, payment could be in lieu of profit or dividend. The special bench, therefore, rejected the arguments of the assessee that the provisions of Section 36(1)(ii) apply only to non shareholder employees. The legal position is that any expenditure on account of payment of commission to an employee will be allowable as deduction under the provisions of Section 36(1)(ii) irrespective of the fact whether the employee is a shareholder or not or whether the commission has been paid for some extra services or for the some services. Only condition is that the payment is not in lieu of dividend. In case extra services have been rendered for payment of commission, it will be one of the relevant factors to consider while deciding whether the ....