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2017 (10) TMI 1248 - AT - Income TaxDisallowance u/s 37(1)(iii) - commission paid to Managing Director and Working Director - Held that:- Similar disallowances were made consistently from AY 2006-07 onwards till AY 20010-11 but only year 2006-07 where Tribunal has deleted the disallowance which was followed in AY 2009-10. For other years, appeals are pending either at CIT(A) stage or before Tribunal. We find that during the year under consideration, the assessee company has already declared the dividend of ₹ 5.40 crores and hence, it cannot be doubted that the payment of dividend was made in the guise of commission to the directors. Disallowance of legal and consultancy charges - Held that:- We find that this issue is settled in the case of Chemosyn Ltd (2015 (2) TMI 863 - BOMBAY HIGH COURT) wherein held that the amounts which were paid by the respondent assessee for the purpose of purchase of its shares, to its shareholder for subsequent cancellation was an expenditure incurred only to enable smooth running of the business. Thus, the expenditure was incurred for carrying on its business smoothly and therefore, was a deductible expenditure. Thus, the impugned order of the Tribunal is essentially a finding of fact. The respondents have not been able to show that these findings are in any manner perverse or arbitrary. Disallowance on payment of assessee’s contribution to PF/ESIC made beyond due date of the respective statutes - Held that:- The payments are within due date of filing of return on income under section 139(1) of the Act and once, the payments are within the due date of filing under section 139 of the Act, the payments are to be allowed as deduction. Revenue appeal dismissed.
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