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TMI Blog2015 (4) TMI 1318X X X X Extracts X X X X X X X X Extracts X X X X ..... , the managing director of the assessee-company, is part of the salary. The only thing is that the commission has been paid on the basis of the turnover; but still the payment was in the nature of salary for services rendered by Shri Ravichandran. CIT(Appeals) also held that there is no force in the argument of the AO that no marketing efforts are necessary to sell the flats constructed by the assessee, as the assessee-company enjoys a very famous brand-name. CIT(Appeals) concluded that this finding is without any basis. As observed that even famous companies having valuable brand-names have to incur huge expenditure for marketing and there is no reason to hold that the assessee would get business without any marketing efforts. Disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided in sub-section(1) of section 36. One of such expenditure entitled to be deducted in computing the business income of an assessee is any sum paid to an employee as bonus or commission for services rendered. But the deduction is not available in a case where such payment of bonus or commission would not have been payable to him as profits or dividend if such amount of bonus or commission was not paid. It means that if the employee is entitled for profits or dividend of the assessee, then the sums paid to such employee shall not be allowed as a deduction in the hands of the assessee. 6. In the light of the above law, the Commissioner of Income-tax(Appeals) observed that there are three limbs to section 36(1)(ii). Those limbs are: ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of the turnover; but still the payment was in the nature of salary for services rendered by Shri Ravichandran. The Commissioner of Income-tax(Appeals) also held that there is no force in the argument of the Assessing Officer that no marketing efforts are necessary to sell the flats constructed by the assessee, as the assessee-company enjoys a very famous brand-name. The Commissioner of Income-tax(Appeals) concluded that this finding is without any basis. He observed that even famous companies having valuable brand-names have to incur huge expenditure for marketing and there is no reason to hold that the assessee would get business without any marketing efforts. 9. In the light of the above findings, he held that the disallowance ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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