TMI Blog2018 (3) TMI 1347X X X X Extracts X X X X X X X X Extracts X X X X ..... e material/finding/evidence pointed out by the Assessing Officer. In fact, the HRA paid to the directors have to considered as perquisites in the hands of the Directors. Therefore, following the earlier decision of the ITAT we set aside this issue to Assessing Officer to verify whether such income has been treated as perquisites in the hands of the Managing Director and decide the issue accordingly. - ITA No. 5952/DEL/2014, C.O No. 5224/DEL/2014 - - - Dated:- 22-3-2018 - Shri N. K. Saini, Accountant Member And Ms Suchitra Kamble, Judicial Member Applicant by : Sh. S. S. Rana, CIT DR Respondent by : Ms. Lalita Agrawal, CA ORDER Per Suchitra Kamble The appeal and cross objection have been filed by the Revenue as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The Assessing Officer observed that this claim is not allowable as per the provision of Section 36(l)(ii) of Income Tax Act, 1961. Vide over sheet entry dated 31/12/2013, assessee was asked to give the explanation on addition made in earlier years on commission to Director and also to justify as to how the said claim is allowable under section 36(l)(ii). The assessee submitted a reply on 09/01/20l4. The Assessing Officer observed that commission was paid to the directors who were also shareholders. The Assessing Officer further observed that Section 36(1) (ii) of the Income Tax Act,1961 is specially inserted to ensure that the companies do not avoid tax by distributing their profits to their specific members/ shareholders as bonus or com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DR submitted that the CIT(A) erred in deleting the addition of ₹ 1,53,95,399/- made by the Assessing Officer on account of disallowance of commission paid to the managing director u/s 36(1)(ii) of the Act. The Assessing Officer rightly held that the commission paid to the Directors was otherwise payable to them as profit or dividend and this commission of ₹ 1,53,95,399/- is not allowable as per the provisions of section 36(l)(ii) of the Income Tax Act, 1961. As relates to assessee s cross objection the Ld. DR relied upon the orders of the Assessing Officer and CIT(A). 6. The Ld. AR submitted that the issue of commission paid to Managing Director u/s 36(1)(ii) is already decided in favour of the assessee by the Hon ble Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cross objection filed by the assessee is allowed. Ground No. 2 of the cross objection in respect of disallowance of excess HRA paid to Managing Director, the same is also decided by the ITAT for A.Y. 2010-11. In present Assessment Year also the Assessing Officer made assumption that the assessee is providing undue benefit to the directors in the shape of high rentals and there was no adverse material/finding/evidence pointed out by the Assessing Officer. In fact, the HRA paid to the directors have to considered as perquisites in the hands of the Directors. Therefore, following the earlier decision of the ITAT we set aside this issue to Assessing Officer to verify whether such income has been treated as perquisites in the hands of the Managi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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