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2009 (11) TMI 277 - HC - Income TaxBusiness Expenditure- The assessee was engaged in the business of bidi. For the assessment year 1992-93, it had made payment of Rs. 12,73,523 by way of commission to the directors calculated at 10 percent. of the net profit and the Assessing Officer directors calculated at 10 percent of the net profit and the assessing officer held only Rs. 3,73,522 could be allowed and, accordingly, disallowed Rs. 9 lakhs. The Assessing officer treated Rs. 2,95,390 paid by the assessee towards use of trade mark as royalty amount and accordingly treated the same as capital expenditure. The Tribunal deleted the disallowances. Held that- dismissing the appeal. As the commission was paid to the directors for their financial involvement and for giving guarantee for loan taken by the company. The Tribunal had found that it was not in excess. The Commission was deductible.
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