2025 (5) TMI 1549
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....he Department has taken the following grounds of appeal:- "i) On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of Rs. 1,90,85,522/- without appreciating the facts that the assessee failed to prove that activities of the director Shri Girish L Chovatia such as meeting prospective customers, participation in exhibitions, market products of the company were not as the director of the company. ii) On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of Rs. 1,90,85,522/- without appreciating the facts that the assessee has made payment to the Director in guise of commission only to evade dividend distribution tax. iii) The appellan....
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....mission to Shri Girish Chovatia was not done with a view to avoid payment of DDT. Accordingly, Ld. CIT(A) gave relief to the assessee with following observations: "5.3 Having duly considered the facts on record and the appellant's submissions, it is seen that the Hon'ble ITAT, D Bench, Ahmedabad in ITA No. 544/Ahd/2023 has adjudicated on an indentical issue in the appellant's own case for Assessment Year 2016-17 vide order dated 15/07/2024 as under: 6. During the course of hearing before us, the counsel for the assessee, after explaining the facts already explained to AO and CIT(A), relied on the following judicial pronouncements: - * Loyal Motor Services Co. Ltd. [1946] (14 ITR 647) (Bombay). * AMD Metaplat (P) Ltd. [2012] 20 ta....
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....Marks Shipping Pvt. Ltd., support the view that commission paid for actual services rendered cannot be disallowed merely on the presumption of tax avoidance. The AO did not provide concrete evidence to show that the payment was made to avoid DDT. The assessee has clearly distinguished the judgement relied upon by the AO and the Ld.CIT(A). 7.3. Based on the facts and judicial precedents, we hold that the commission paid to Shri Girish Chovatia is an allowable business expenditure under section 36(1)(ii). Therefore, the disallowance made by the AO and confirmed by the Ld.CIT(A) is deleted. As the issue under dispute is squarely covered by the above judgement of the higher appellate authority, respectfully following the above, the additi....