9911796707
TMI Blog2014 (2) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have heard the rival parties and have gone through the material placed on record. We have noted that Managing Director and whole time Director (Operations) who 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 of the Income-tax Act, 1961. The case law relied upon by ld.DR had its specific facts and circumstances wherein there were only three shareholders and all three were Directors and were related to each other. Moreover, in that case, no evidence of putting any extra services was placed and the turnover and profits of that company had increased due to general improvement in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e do not see any reason to interfere in the order of ld.CIT(A). In view of the above, the first ground of the revenue is dismissed." 4. Admittedly, the facts for the year under consideration are identical and in the preceding year, the ITAT considered similar facts and, applying the decision of Hon'ble Jurisdictional High Court in the case of AMD Metplast P.Ltd. Vs. DCIT - [2012] 341 ITR 563 (Delhi), upheld the order of CIT(A) in this regard. Since the facts are identical in this year, we do not find any justification for taking a different view than what was taken by the ITAT in the immediately preceding year. Therefore, respectfully following the same, we uphold the order of learned CIT(A) in this regard and reject ground No.1 of the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that of the Assessing Officer. Accordingly, ground No.2 of the Revenue's appeal is allowed. 8. Ground Nos.3 4 of the Revenue's appeal, which read as under, are dealt with together:- "3. The ld.CIT(A) erred in law and on facts in deleting the addition on account of bad debts written off amounting to Rs.9,35,706/-. 4. The ld.CIT(A) erred in law and on facts in deleting the addition on account of cessation of liabilities of Rs.6,76,655/-." 9. With regard to ground Nos.3 4, it is stated by the learned counsel that during the year under consideration, there was bad debt amounting to Rs.9,35,706/- and there was cessation of liability of Rs.6,76,655/-. That the assessee claimed the deduction for bad debts only for the net amount i.e. f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the material placed before us. So far as the addition for cessation of liability is concerned, we are of the opinion that the assessee itself has considered the cessation of liability as its income. Therefore, no further addition can be made. So far as allowability of bad debts is concerned, Hon'ble Apex Court in the case of T.R.F.Limited (supra) held as under:- "After the amendment of section 36(1)(vii) of the Income- tax Act, 1961, with effect from April 1, 1989, in order to obtain a deduction in relation to bad debts, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable : it is enough if the bad debt is written off as irrecoverable in the accounts of the assessee." 12. Therefore, the on ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
