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Whether commission paid to directors were allowable expenditure u/s. 36(1)(ii)?
Case Law Details
- Case Name
- Commissioner of Income Tax-I Vs Convertech Equpments Pvt. Ltd. (Delhi High Court)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Courts
- All High Courts, Delhi High Court
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It was noticed that while commission was paid as a form of remuneration for actual services rendered, dividend is a return of investment and is paid to all its shareholders equally. It was thus held that if the commission is paid for actual services rendered, section 36(1)(ii) will not apply. This decision was followed by this Court in CIT v. Career Launcher India Ltd. (2012) 250 CTR 240 (Del). These decisions apply to the present case. The substantial question of law in ITA No.669/2012 is answered in favour of the assessee.
IN THE HIGH COURT OF DELHI
Date of decision: 3rd Dec...
