Case Law Details
Brief of the Case
Bombay High court held In the case of M/s Nagpur Engineering Co. Pvt. Ltd. vs. CIT. that in order to attract ceiling u/s 40(c), the payment must be a periodical payment. A Lumsum payment or one time payment is not covered under section 40(c) of Income Tax Act, 1961.
Facts of the Case
In this case, company makes commission payments to his directors over and above the remuneration paid to them. While assessment, AO calculated the reasonable figure of commission and disallowance made u/s 40(c)(iii). Disallowance was upheld by the CIT(A) and ITAT. The following two questions have refereed by the ITAT on the application of assessee –
“1.Whether the commission on sales paid by the assessee constituted “the provisions of any remuneration or benefit or amenity” within the meaning of Section 40(c)(iii) of the Income Tax Act, 1961?
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