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2013 (11) TMI 1333 - AT - Income TaxAllowance of deduction on commission paid to Managing Director u/s 36(ii) of the Income Tax Act – Held that:- Reliance has been placed upon the judgment in the case of AMD Metplast P.Ltd.[ 2011 (12) TMI 320 - Delhi High Court], wherein it has been held that in terms of the board resolution the Managing Director was entitled to receive commission for services rendered to the company. It was a term of employment on the basis of which he had rendered service. Accordingly, he was entitled to the amount. Commission was treated as a part and parcel of salary and tax had been deducted at source. MD was liable to pay tax on both the salary component and the commission. The payment of dividend was made in terms of the Companies Act, 1956. The dividend had to be paid to all shareholders equally. This position could not be disputed by the Revenue. Dividend was a return on investment and not salary or part thereof. In the present case, Shri Raj Kumar Bardeja was the Managing Director of the assessee company who had been paid salary and commission in terms of Board’s Resolution - The assessee has deducted the tax at source under Section 192 of the Act treating the commission as part of salary. Shri Raj Kumar Bardeja has disclosed the income under the head ‘salary – Deduction of commission was allowed u/s 36(1)(ii) of the Income Tax Act. Addition on account of remission/cessation of liability under Section 41(1) of the Income-tax Act - Assessee could not produce the confirmation from these three creditors – Held that:- Relying upon the judgment in the case of Uttam Air Products (P) Ltd [2004 (10) TMI 284 - ITAT DELHI-C], it was held that Revenue has no material or evidence to substantiate that the said supplier had given up its claim against the assessee. The onus to bring on record such material or evidence is on the Revenue - On the basis of the facts and material as found on record, it cannot be held that the liability had ceased to exist in the hands of the assessee in the absence of any material to the contrary – Decided in favor of Assessee.
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