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2015 (8) TMI 1201 - AT - Income TaxDisallowance u/s 14A - CIT(A) deleted the addition - Held that:- Nothing has been brought on record by the AO to hold why the suo moto disallowance made by the assessee u/s 14A on facts could not be accepted. On consideration thereof it is seen that in the peculiar facts and circumstances of the case where the AO has not recorded his finding as to why he was not satisfied by the correctness of assessee’s claim of expenditure. No distinguishing facts and circumstances has been pointed out by the Ld. Sr. DR. In assessee’s own case in 2008-09 wherein it was held that Rule 8D cannot be applied for want of recording of requisite satisfaction by the AO it was submitted that facts and circumstances being identical, the departmental appeal on identical fact had been dismissed - Decided against revenue. Addition on commission paid to the Managing Director of the assessee company, u/s 36(1)(ii)- Held that:- As decided in assessee's own case for 2007-08 & 2008-09 as per section 17(1) of the Act, the term “salary” includes any, fees, commission, perquisites or profit in lieu salary, All the sums are taxable under the head “salary” only. These two directors, while filing the return of income, declared not only the salary but commission also as part of income under the head “salary” The same are assessed as such. Therefore, it is incorrect to hold that bonus or commission shall not form part of salary or remuneration. In accordance with the provisions of section 36(1)(ii) any sum paid to an employee as bonus or commission for services rendered where such sum would, not have been payable to him as profit or dividend if it had not been paid as bonus or commission is allowable. The sum paid to the directors is as an employee of the company. The bonus or commission payable for the services rendered and are in accordance with the terms or employment. The directors are not only shareholders of the company. Therefore, it cannot be said that if the commission was not paid, such sum would have been paid to the employees as profit or dividend. Thus, the exception provided in section 36(1)(ii) do not apply. In such circumstances the amount payable as commission are allowable u/s 36(1)(ii) of the Act. - Decided in favour of assessee.
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