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2014 (8) TMI 989 - AT - Income TaxDisallowance of commission paid to Directors of the company - whether not an allowable expenditure within the meaning of section 36(1)(ii) as well as section 37(1)? - CIT(A) deleted the addition - Held that:- As per the proposition laid down by the Jurisdictional High Court, in the case of Metaplast P. Ltd. Vs. DCIT (Delhi)[2011 (12) TMI 320 - Delhi High Court] Section 36(1)(ii) is not attracted if the payment of commission is part of salary paid by the company in terms of the appointment order, which is approved at the Annual General Meeting. In the case of one hand, the commission in question is paid as per the terms of appointment and has been approved at the Annual General Meeting of the company held on 15.09.2004. The Annual General Meeting approved the remuneration package of (1) Mr. H.L. Khushalani (2) Mr. Vivek Khushalani and (3) Mrs. Raksha Walia w.e.f. 01.04.2004.The approval was granted in accordance with the provisions of Sections 198, 269, 309, 310 and Schedule XIII of the Companies Act 1956. Perusal of the resolution demonstrate that the commission in question is nothing but another form of salary which is paid for service rendered. Thus, the order of the ld. CIT(A) has to be upheld. Also see CIT-1 Vs. Convertech Equipments Pvt. Ltd [2012 (12) TMI 451 - DELHI HIGH COURT] - Decided against revenue.
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