Case Law Details
Case Name : Dalal Broacha Stock Broking Pvt Ltd Vs. ACIT (ITAT Mumbai)
Related Assessment Year :
Courts :
All ITAT ITAT Mumbai
Dalal Broacha Stock Broking Pvt Ltd Vs. ACIT (ITAT Mumbai – Special Bench)- Provisions of section 36(1)(ii) will apply in case of all employees including share holder employees irrespective of the fact whether any extra services have been rendered or not. The issue whether payment of bonus or commission to an employee will be covered by the provisions of section 36(1)(ii) or section 37(1) is also settled by the judgment of Hon’ble Jurisdictional High Court in case of Subodh Chandra Poppatlal vs. CIT (24 ITR 586) in which the Hon’ble High Court while dealing with similar provision...
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…unique but novel land mark; next only to the extreme stance as pressed for by the Revenue in the by- now- most talked about case – Vodafone – which according to the Revenue itself, was a daring adventure by way of ‘testing fresh waters’.
“…Therefore, in our view, the judgment cited above cannot be applied to a case where a device is adopted by closely held private companies to distribute dividend in the garb of commission in such a manner to take advantage of judgment in the case of Loyal Motor Service Company Ltd. (supra).”
This sums up the view of the ITAT handed down against the assessee. On the first blush, but even after a repeated reading of section 36(1)(ii), the rationale behind the said view can only be regarded as mindboggling or brain teasing. Be that as it may,the stance of the Revenue undoubtedly juts out; is most likely bound to go down in the annals of Indian jurisprudence a uniq