Case Law Details
SRC Aviation Pvt. Ltd. Vs ACIT (Delhi High Court)
Facts- The appellant is a private limited company. Sh. Arvind Chadha and Sh. Anoop Chadha are two share-holders and directors holding 50% equity shares each since inception of the company. In the Assessment year 2011-2012, the company has paid bonus of Rs.1 crore each to both the directors. Similarly, in the assessment year 2014-2015 the company has paid bonus of Rs.1.5 crore each to both the Directors. Assessing Officer disallowed the same relying upon Section 36 (1)(ii) of the Act. The Assessing Officer was of the view that bonus was paid to avoid payment of dividend distribution tax.
Conclusion- The assessing officer and CIT (A) have given a concurrent finding that the assessee has paid the bonus in lieu of the dividend and therefore, the above sum is disallowed under Section 36 (1) (ii) of Act. The ITAT also after considering the findings of the assessing officer and the CIT (A) had held that the payment of bonus or commission is not allowable as deduction under Section 36 (1) (ii) of the Act in the hands of the assessing company. In the absence of any substantial question of law, the appeals are liable to be dismissed. Hence, the present appeals along with the pending applications are dismissed.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The SRC Aviation Private Limited has filed these two appeals i.e.ITA 492/2019 & ITA 41/2020 under Section 260A of the Income Tax Act (hereinafter referred to as ‘the Act’) assailing the Income Tax Appellate Tribunal’s (ITAT) order in ITA Nos. 492/2019 & ITA 41/2020 pertaining to assessment year 2011-2012 and 2014-2015 respectively.
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