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2015 (4) TMI 945 - BOMBAY HIGH COURTDisallowance under section 40(c) - Whether the commission on sales paid by the assessee constituted “the provisions of any remuneration or benefit or amenity” within the meaning of Section 40(c)(iii)? - Held that:- In order to attract ceiling under Section 40[c] of the Act, the payment in dispute must be shown to be a periodical payment. A lumpsum payment or one time payment does not fall in it. Here the fact that commission was payable only if annual turn over exceeded ₹ 2 Crores, is not in dispute. Facts show that payment was thus contingent upon turn over and also not periodical. Hence, following this law, we find that the commission on sales paid by the assessee could not have been subject to provisions of Section 40[c][iii] of the Income Tax Act, 1961. Here, we have to also take note of the finding reached by the CIT (Appeals), in paragraph no.4 that the commission paid was not excessive or unreasonable. Infact CIT (Appeals) has held that first limb of the counsel is arguments before it had succeeded. We therefore, find its disallowance under Section 40[c] not permissible. - Decided in favour of the assessee
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