Bonus & commission paid to MD for services rendered as per appointment terms is allowable business expenditure

Bonus and commission paid to the Managing Director as services rendered as per terms of appointment as Executive/Managing Director of a company is allowable business expenditure. The Hon’ble Delhi High Court in the case of AMD Mertplast Ltd. reported in 341 ITR 563 has held that Managing Director in terms of Board’s resolution was entitled to receive commission for services rendered to the company. It was a term of an employment on the basis of which he had rendered services. The operative part of Hon’ble Delhi High Court judgment is reproduced below:- “Held, allowing t...