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2014 (2) TMI 466 - ITAT DELHIDeletion made on account of commission to Managing Director – Held that:- The decision in DCIT, Circle 9 (1), New Delhi Versus M/s. Spirotech Heat Exchangers Pvt. Ltd. [2013 (11) TMI 140 - ITAT DELHI] and AMD Metplast (P) Ltd [2011 (12) TMI 320 - Delhi High Court]followed - Commission is part and parcel of salary and is subject to tax deduction at source – Contrarily, dividend is a return on investment and not salary or part thereof – Managing Director and whole time Director (Operations) were paid commission on the basis of duly passed Board Resolution and was in accordance with the provisions of the Companies act. The payment of Commission is necessarily a part of salary as defined in section 17 - the payment of commission was paid to Managing Director and Director (Operations) as per their terms of appointment as is apparent from Board Resolution - the payment of commission was a genuine business expenditure and there was no reason to interfere in the order of CIT(A) – Decided against Revenue. Deletion on account of foreign travelling expenses – Held that:- Spouses had also accompanied with the directors of the company there must be some element of personal nature in the expenses – the AO had rightly made disallowance of 20% out of foreign travel expenses – the order of the CIT(A) set aside – Decided in favour of Revenue. Deletion of bad debts written off – Held that:- The only requirement for allowability of the bad debts is that the assessee should write off the bad debts as irrecoverable in its accounts in the relevant year – Relying upon TRF. LTD. Versus COMMISSIONER OF INCOME-TAX [2010 (2) TMI 211 - SUPREME COURT] - the assessee was entitled to claim of bad debts debited to the profit & loss account - there cannot be more disallowance than what is actually debited to the profit & loss account - the assessee is entitled to the deduction of bad debts – decided against Revenue.
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