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TMI Blog2019 (5) TMI 847X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Department : Ms. Pramita M. Biswas, CIT(DR) ORDER PER H.S. SIHU, JM These 02 appeals are filed by the Revenue against the respective Orders passed by the Ld. CIT(A)-2, New Delhi relating to assessment years 2011-12 to 2012-13. Since common issue involved in these appeals are common and identical, except the difference in figures, hence, the appeals were heard together and are being disposed of by this common order for the sake of convenience, by dealing with the facts of ITA No. 2990/Del/2016 (AY 2011-12) and the decision thereof will apply mutatis mutandis to other appeal i.e. ITA No. 2991/De/2016 (AY 2012-13). However, grounds of both the two appeals are reproduced hereunder:- ITA NO. 2990/DEL/2016 (AY 2011-12) The DCIT, Circle-5(1), New Delhi is hereby directed to file appeal in the above mentioned case before the ITAT, New Delhi on the following grounds of appeal. 1) On the basis of the facts and in the circumstances of the case and in law, the CIT(A) has erred in deleting an addition of ₹ 1,77,79,000/- on account of bonus paid to one of its Direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O further noted that as per the provision of Section 36(1)(ii) bonus and or commission paid to an employee is allowable as deduction, if and only if, it is not payable as profit or dividend. AO further observed that the company had incurred a loss of ₹ 77,05,967/- during the relevant year as per P L account of the assessee company. AO further noted that as per provisions of section 36(1)(ii) of the Act, profit or dividend should not be paid in the form of bonus. Since in this case, the assessee has reduced its income in the ITR by this amount of bonus. He further observed that moreover, the assessee company has not justified as to what extra ordinary services have been given by the said Director for which bonus has been claimed and the same has resulted to the assessee company into less taxable income by this amount. Accordingly, query was put to the assessee as to why bonus of ₹ 1,77,79,000/- paid to Director not be disallowed since it could have been paid as dividend. In response to the same, assessee has submitted its reply, which was considered by the AO, but the same was not accepted by him. AO observed that the cases relied upon by the assessee are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined finality yet. Accordingly, the AO disallowed ₹ 1,77,79,000/- on account of bonus and added the same to the income of the assessee vide order dated 21.03.2014 passed us/ 143(3) of the Act. Against the assessment order, the assessee appealed before the Ld. CIT(A), who vide his impugned order dated 29.02.2016 has deleted the addition in dispute by partly allowing the Appeal of the assessee. Aggrieved with the impugned order, Revenue is in appeal before the Tribunal. 3. Ld. CIT(DR) relied upon the order of the Assessing Officer and reiterated the contentions raised in the ground of appeal and stated that assessee has paid ₹ 1.27 crores as salary and ₹ 1.78 croers as bonus. the assessee has not corroborated the claim that the bonus was paid at par with other employees base on the percentage of salary and further, the assessee has not furnished any evidence for the performance of the Director enabling him to other employees. She further stated that assessee company could have paid the amount as profit/ dividend instead of bonus / commission since the payment is being made to Directors of the Company. However, in the instant case the assessee compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the AO on this account were deleted by the First Appellate Authority vide order dated 30.4.2014 for assessment year 2010-11. Hence, he requested that the action of the Ld. CIT(A) in deleting the addition in dispute may be upheld. In support of his contention, he filed a Paper Book Vol. 2 containing pages 148 to 153 which is copy of order dated 1.10.2018 passed by the AO in assessee s own case for the assessment year 2009-10 pursuant to the order passed by the Delhi Bench of the ITAT; copy of the order dated 8.10.2018 passed by the AO in the assessee s own case for the assessment year 2010-11 pursuant to the order passed by the Delhi Bench of the Tribunal; copy of the order dated 2.2.2018 passed by the Tribunal in assessee s own case bearing ITA Nos. 6503/Del/2012 and 4141/Del/2014 for assessment years 2009-10 and 2010-11 and the chart depicting stand of the Department in assessee s case for various assessment years and relied upon the case law of ITAT, Delhi I (Third Member) decision in the case of Zuari Leasing Finance Corpn. Ltd. vs. ITO reported (2008) 112 ITD 205 (Delhi) TM. 5. We have heard both the parties and perused the records, Paper Book filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Ld. CIT(A). The relevant portion of the finding of the Ld. CIT(Appeals) in Appeal no. 106/13-14 vide order dated 30.04.2014 for A.Y. 2010-11 in the case of the assessee on similar issue is reproduced below:- 5.2.11 Even otherwise also, this issue is covered by the decision of my predecessor CsIT(A) i.e. CIT (A)-VI, New Delhi, in Appeal No. 185/11-12 for A.Y. 2009-10 dated 30.10.2012 CIT(A)-V1, New Delhi order in Appeal No. 237/09-10 for A.Y. 2007-08, dated 10.08.2010. 5.2.12 Further, as per the Board Resolution dated March 2, 2009, it was resolved that in terms of requirements of section 198, 269, 309 r.w.s 314 other applicable provisions under the Companies other applicable provisions under the Companies Act, 1956, Sh. Sanjay Mehta, Director of the company has been entitled to payment of inter alia, Directors Remuneration e.g. (i) Annual Compensation of ₹ 93,70,000/- to be paid by way of monthly fixed sum (including special allowance) (ii) bonus that might be determined by the Board to be paid as percentage of fixed compensation in one or more installments during the year, taking into account Company s performance from time to tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment years 2009-10 and 2010-11 and the chart depicting stand of the Department in assessee s case for various assessment years and relied upon the case law of ITAT, Delhi I (Third Member) decision in the case of Zuari Leasing Finance Corpn. Ltd. vs. ITO reported (2008) 112 ITD 205 (Delhi) TM. It is also noted from page no. 169 of the Paper Book Vol. 2 which is a Chart showing stand of the Department in various assessment years on this issue in dispute stipulates that in the assessment year 2007-08 bonus of ₹ 47,46,000/- paid to Mr. Sanjay Mehta allowed by the AO vide order dated 31.7.2017 pursuant to the order fo the ITAT, Delhi Bench order dated 7.8.2012 and in the assessment year 2008-09 no addition was made by the Department and also the case was not picked for scrutiny assessment. Similarly, in the assessment years in dispute i.e. AY 2011-12 2012-13, the AO made the addition of ₹ 1,77,79,000/- and ₹ 1,77,37,500/- paid to Mr. Sanjay Mehta have already been deleted by the Ld. CIT(A) vide his impugned orders for which the Assessee is in appeal before the Tribunal. The case laws relied by both the parties do not support the case being distinguished on facts. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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