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2014 (7) TMI 1314 - ITAT DELHICommission paid to Directors - HELD THAT:- The first two directors namely Shri Umesh Srivastava and Ms. Suman Srivastava are holding shares to the extent of 19.8% and 122.4% respectively. These directors are engineers and Management graduates and are having experience of 50 years and 15 years respectively. In respect of these two directors, the Tribunal in assessment years 2005-06 and 2006-07, had held in favour of the assessee. Besides the above Tribunal order in the earlier years, a number of judgements has been relied upon by the A.R. before Ld. CIT(A) which hold that payment to directors in the form of commission is covered by the definition of remuneration. The Hon'ble Supreme Court in the case of Gestetner Duplicators Ltd. Vs CIT [1978 (12) TMI 1 - SUPREME COURT] has held that commission paid at a fixed percentage on the turnover is nothing but payment as salary - the commission paid by the assessee would clearly fall within the expression ‘salary’. Similarly, Hon'ble Gujarat High Court in the case of CIT Vs Rohit Mills Ltd. [1995 (10) TMI 23 - GUJARAT HIGH COURT] held that the commission paid to directors is distinctly remuneration paid for the services rendered by him. Even if it is not covered by the definition of remuneration, it would be covered by any benefit resulting directly or indirectly to such director at the cost of the company. In view of the above judicial precedents, we hold that the disallowance of commission was not warranted Depreciation of Computer Peripherals, printer and UPS - HELD THAT:- Since the expenditure is with regard to the computer peripherals, printers, UPS which can not be used stand alone, therefore, in view of the decision relied upon by the appellant, agree that in the facts and circumstances of the appellant's case, he is entitled for depreciation @ 60% . Disallowance on account of advances & reimbursables written off - HELD THAT:- Appellant has credited both the fees as well as out of pocket expenses to the Profit and loss account, hence Assessing Officer’s observation is not correct that debt has not been taken into account while computing the income. Further in view of the accounting treatment regularly followed by the appellant and by relying on the judgement of Apex Court in the case of TRF Limited Vs CIT [2010 (2) TMI 211 - SUPREME COURT] the claims of bad debt is allowed Disallowance u/s 14A - HELD THAT:- We are of the opinion that fixed maturity plans offered by mutual funds definitely require much less professional expertise as compared for making investments in equity related schemes and therefore, less expenditure is involved in managing such schemes. Moreover before upholding partial disallowance u/s 14A, Ld. CIT(A) should have considered the submissions of assessee that a part of investments were not for earning dividends but were strategic investments. In view of the above, we are of the opinion that the issue of disallowance be readjudicated by the Assessing Officer and the AO should decide the disallowance on the basis of his objective findings after giving a reasonable opportunity to the assessee of being heard. In view of the above, the appeal of the assessee is allowed for statistical purposes
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