TMI Blog2014 (8) TMI 989X X X X Extracts X X X X X X X X Extracts X X X X ..... stion is paid as per the terms of appointment and has been approved at the Annual General Meeting of the company held on 15.09.2004. The Annual General Meeting approved the remuneration package of (1) Mr. H.L. Khushalani (2) Mr. Vivek Khushalani and (3) Mrs. Raksha Walia w.e.f. 01.04.2004.The approval was granted in accordance with the provisions of Sections 198, 269, 309, 310 and Schedule XIII of the Companies Act 1956. Perusal of the resolution demonstrate that the commission in question is nothing but another form of salary which is paid for service rendered. Thus, the order of the ld. CIT(A) has to be upheld. Also see CIT-1 Vs. Convertech Equipments Pvt. Ltd [2012 (12) TMI 451 - DELHI HIGH COURT] - Decided against revenue. - ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the company should not be disallowed as per Section 36( I )(ii) of 1.T. Act, 1961. The assessee vide submission dated 06.12.06 stated as under: The Commission was paid as per the See 309 r w.s J 98 and Schedule XIII of the Companies Act 1956 and the provisions of Section 36(1)(ii) are not attracted to the said commission. We therefore submit that the commission paid to directors which is part of the terms of appointment are fully allowable u/s 37(1) of I.T. Act 1961. The submissions filed by the assessee company were considered and found not tenable. The commission paid by the assessee company cannot be considered as a part of the salary or remuneration. After considering the facts and circumstances of the case, it is considered th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een payable to him as profits or dividend if it had not been paid as bonus or commission. 6) It will be seen that, section 36(1 )(ii) of the Act provides that any sum paid to an employee as bonus or commission for services rendered, where such sum would not have been payable to him as profits or dividend if it has not been paid as bonus or commission, the same is an allowable deduction. In other words, section 36(1)(ii) of the Act seeks to provide that commission paid to an employee is an allowable deduction paid to an employee is an allowable deduction unless and until such sum would not have been payable as profits or dividend. In the instant case, the appellant company paid remuneration to the Directors of the company and as such, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional High Court, in the case of Metaplast P. Ltd. Vs. DCIT 341 ITR 563 (Delhi), Section 36(1)(ii) is not attracted if the payment of commission is part of salary paid by the company in terms of the appointment order, which is approved at the Annual General Meeting. 9. In the case of one hand, the commission in question is paid as per the terms of appointment and has been approved at the Annual General Meeting of the company held on 15.09.2004. The Annual General Meeting approved the remuneration package of (1) Mr. H.L. Khushalani (2) Mr. Vivek Khushalani and (3) Mrs. Raksha Walia w.e.f. 01.04.2004. 10. The approval was granted in accordance with the provisions of Sections 198, 269, 309, 310 and Schedule XIII of the Companies Act 195 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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