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Case Law Details

Case Name : Hero Honda Finlease Ltd. Vs Addl. CIT (ITAT Delhi)
Related Assessment Year : 2005-06
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The Tribunal observed that the commission paid was disallowed by invoking provisions under Section 36(1)(ii) and not by invoking Section 40A(2)(b)(ii) of the Act. This implies that the AO had not disputed the services rendered by Renu Munjal but he was of the opinion that dividend had been paid in the garb of commission because it actually reduced the corpus available for distribution as dividend.  Section 36(1 )(ii) of the Act had been incorporated to check, inter-alia, private companies from avoiding tax by distributing their profits to their members

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