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TMI Blog2015 (12) TMI 375X X X X Extracts X X X X X X X X Extracts X X X X ..... cts are, the assessee company is engaged in the business of manufacturing and sale of submersible pumps and its accessories. For the assessment year under consideration, the assessee filed its return of income on 28th September 2010, declaring total income of Rs. 6,80,44,242. During the assessment proceedings, on the basis of information received from the Director General of Income Tax (Inv.), Mumbai, to the effect that purchases effected by the assessee are bogus, the Assessing Officer called upon the assessee to furnish the details. From the material on record, he noticed that the assessee had made bogus purchases from M/s. Samarth Enterprises, Bhayander, for Rs. 71,303, in the financial year 2009-10 and Rs. 5,129, for the financial year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the relevant previous year, has recorded purchases of Rs. 11,238, from Smarth Enterprises, in its books of account. He, therefore, directed the Assessing Officer to restrict the disallowance to that amount. Being aggrieved, the Department is in appeal before us. 5. Having considered the submissions of the parties and on a perusal of the material on record, we do not find any reason to interfere with the decision of the learned Commissioner (Appeals) on this issue. As can be seen, the learned Commissioner (Appeals), on verifying the books of account of the assessee for the relevant assessment year has given a factual finding that the actual purchases made by the assessee during the year under consideration from Samarth Enterprises, was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1956, as a part or whole time working directors' remuneration package and TDS has been deducted under section 192B of the Act by treating it as part of salary. It was also submitted that section 17 of the Act also treats as commission part of salary. The Board resolution authorising payment of commission to the directors was also submitted. The Assessing Officer, however, did not find merit in the submission of the assessee. He observed that as per section 36(1)(ii), one of the conditions for allowing this type of expenditure is the amount payable to employees as bonus or commission should not otherwise have been payable to them as profit or dividend so that tax avoidance by distributing profit by way of bonus or commission amongst the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pra), the learned Commissioner (Appeals) found the same to be factual distinguishable from assessee's case as in that case there was a nexus between the payment of dividend and commission to the directors. Whereas, in the case of assessee, the commission payment of the directors were towards services rendered. He observed that when the Assessing Officer accepts the services rendered to the directors to be genuine, there is no reason to disallow the commission. The learned Commissioner (Appeals) relying upon certain decisions of the Hon'ble Delhi High Court in the case as referred to by him and a decision of the Tribunal, finally deleted the addition made by the Assessing Officer. Being aggrieved, the Department is in appeal before u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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