2011 (12) TMI 320 - DELHI HIGH COURT

Whether the Tribunal is right in holding that commission of Rs.25,00,000 paid to Mr. Ashok Gupta, managing director of the assessee, cannot be allowed as a deduction in view of section 36(1)(ii) of the Income-tax Act, 1961, and the said amount can be only allowed under section 36(1)(ii) if dividend of Rs. 25,00,000 could not have been paid to Mr. Ashok Gupta - Ashok Gupta is the managing director and in terms of the board resolution is entitled to receive commission for services rendered to the company - . Ashok Gupta was liable to pay tax on both the salary component and the commission. Payment of dividend is made in terms of the Companies Act, 1956 - Decided in favor of the assessee