2019 (3) TMI 1894

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..... THAT:- As payments in question was made to directors of the assessee company. These payments were made pursuant to agreements for payment of bonus and commission copies of which were furnished to the Revenue. The payments were made within the limit prescribed by law. CIT(A) upheld the disallowance on the ground that the agreements are generally worked. In our view, this is not a valid ground to ma .....

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..... has erred in confirming the disallowance made by the Assessing Officer u/s 36(1)(ii) of the Income Tax Act, 1961 of ₹ 8,32,197/- as bonus commission paid to the directors as per agreements of appointment with them and were also within the limit permissible under Company law. 2. For that the ld. Commissioner of Income Tax (Appeals) has erred in confirming the disallowances of bonus .....

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..... e furnished to the Revenue. The payments were made within the limit prescribed by law. The CIT(A) upheld the disallowance on the ground that the agreements are generally worked. In our view, this is not a valid ground to make this disallowance. Agreements are to be understood in such a way in which both the parties to the agreement, desired and understood. Section 36(1)(ii) does not apply in this .....

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