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TMI Blog2012 (6) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... s to allowability of the commission paid to Shri Sucha Singh, Managing Director of the company under section 36(1)(ii) of the Income-tax Act, 1961. In the appeals of assessee, this is the only issue involved, whereas in the appeal of revenue apart from this issue, two more grounds of appeal have been taken, which relates to allowance of depreciation on computer peripheral @ 60% and, deletion of Rs.20,06,234, which was added by the Assessing Officer by making a disallowance out of miscellaneous expenses. 2. First, we take the common issue involved in all the three appeals relating to allowability of commission paid to Sardar Sucha Singh, MD of the assessee company under sec. 36(1)(ii) of the Income-tax Act, 1961. 3. The brief facts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee was Rs.1,00,02,000. The total number of shares were 1000200. These shares were possessed by four individuals and one company, namely, Sucha Singh 40,000, Harjinder Kaur 16,000, Amardeep Singh 15,020, Paramjeet Singh 25,000, Coil Company INC 4000. Up to the end of March 31,2009, this status remained as it is. The one more important fact required to be noted here is that turnover of the company in assessment year 2000-01 was Rs.837,17,395 and it increased to Rs.3112,09,597 in assessment year 2007-08. According to the Assessing Officer, assessee has not distributed the dividend from the very inception and the amount of commission paid to Sardar Sucha Singh could be paid as a profit or dividend income as per section 36(1)(ii) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T v. Bony Polymers Pvt. Ltd. passed in ITA No. 69/2011 and other appeals. He placed on record copy of the Hon'ble High Court's decision. He further relied upon the order of the ITAT passed in the case of M/s. Creative Travels Pvt. Ltd. v. ACIT in ITA No. 394/Del/09 for assessment years 2005-06 and 2006-07 and pointed out that both these orders have been upheld by the Hon'ble High Court. He placed on record copy of the Hon'ble High Court's decision in the case of CIT v. Creative Travels passed in ITA No. 1283/2011. The learned counsel for the assessee further relied upon the decision of Hon'ble Delhi High Court in the case of AMD Met Plast Pvt. Ltd. v. DCIT rendered in ITA No. 650/Del/2011. He placed on record copy of this decision. 6. On t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .9% of the total shareholding and rest of the shares are being held by other individuals or by the company. Being a private limited company, controlled by the family members, a resolution approving the payment of commission to the working directors may not be very difficult task but whether this arrangement indicates that if this commission was not paid to the working director then it would be received in the shape of profit/dividend. If we look towards the shareholding pattern then only 39.9% of this commission paid would be paid to Shri Sucha Singh on the basis of the shares held by him. The other shareholders, namely, Harjinder Kaur, Paramjeet Singh who are holding 25% and 16% of the shares would get commission though the Board has not r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of BSES. 12. With the assistance of learned representative, we have gone through the record carefully. Learned CIT(Appeals) has allowed the depreciation on the computer peripheral @ 60% by putting reliance upon the order of the Hon'ble Delhi High Court rendered in the case of CIT v. BSES Rajdhani Powers Ltd. in ITA No. 1266/2010. Learned CIT(Appeals) also made reference to the order of the ITAT passed in the case of ITO v. Simron Majumdar reported in 98 ITD 119. Considering the order of Learned CIT(Appeals), we are of the view that the learned first appellate authority has rightly placed its reliance on the judgment of the Hon'ble Delhi High Court as well as of ITAT. We do not find any merit in this ground of appeal. It is rejected. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. Learned first appellate authority has reproduced the order sheet entries of the Assessing Officer in paragraph No. 17, before arriving at a conclusion that assessee was not provided sufficient opportunity of hearing. Learned CIT(Appeals) thereafter gone through the evidence and deleted the addition. 15. With the assistance of learned representatives, we have gone through the record carefully. As far as entertainment of additional evidence is concerned, we do not find any error in the order of the Learned CIT(Appeals). But sub-rule (3) of Rule 46A suggests that learned first appellate authority shall not take into consideration any evidence produced under sub-rule (1) of Rule 46, unless the Assessing Officer has been given an opportunit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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