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2017 (10) TMI 1465 - AT - Income TaxDisallowance of expenditure u/s.36(1)(iii) r.w.s. 40A(2)(b)(iv) - commission paid to working directors and other employees - CIT-A deleted the addition - HELD THAT:- CIT(A) considered the fact that the commission was paid as per the Board Resolution and Authorisation of the Board of Directors. The CIT(A) also held that the services rendered are proportionate to the commission paid by the assessee. She also discussed the fact that recipients of the commission have paid the taxes on the said commission at the highest tax rate. So far as the contention of the AO on the commission issue paid to relatives, she mentioned about not bringing any comparable cases to demonstrate the unreasonableness or excessiveness of the same. Therefore, in our view, the view taken by the CIT(A) on this issue is one of the possible conclusions. The order of the CIT(A) is fair and reasonable on this issue and it does not call for any interference. Accordingly, the grounds raised by the Revenue are dismissed. Disallowance u/s 14A r.w.r 8D - sufficiency of own funds - HELD THAT:- We find it is obvious inference that assessee has adequate interest free funds and assessee also earned profits in the current year. All these funds are sufficient enough to take care of the investments considering the principle of presumption, laid down in the case of Reliance Utilities and Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] Therefore, in our view, the order of the CIT(A) on this issue requires reversal on this issue. Accordingly, the ground raised by the assessee to the extent of disallowance of ₹ 27,29,202/- stands deleted. Regarding disallowance made under section 36(1)(iii) read with Rule 8D(2) of the I.T. Rules, 1962, we are of the opinion that the same requires to be confirmed in the absence of any specific arguments on this issue. Accordingly, ground raised by the assessee to this extent is partly allowed.
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