Loyal Motor Service Co. Ltd. v. CIT

14 ITR 647High Court1946#2384 most cited

What is Loyal Motor Service Co. Ltd. v. CIT authority for?

A payment of bonus or commission is allowable as a business deduction under Section 36(1)(ii) unless it constitutes a distribution of profits or dividends, thereby distinguishing payments genuinely for services from those merely intended to escape taxation.

48

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2012 to 2026.

Also referred to as

Loyal Motor Service Co. Ltd. v. CIT · 14 ITR 647 · Section 36(1)(ii) · Section 40A(2)(b) · bonus allowance · commission deduction · salary disallowance · dividend distribution tax · disguised profit distribution · business expenditure · allowability of remuneration · Income Tax Act 1922 Section 10(2)(x)

Sections most often in play

Section 143(3)Section 250Section 36(1)(ii)Section 40A(2)(b)Section 144BSection 194C(6)Section 194C(7)Section 198 (Companies Act)

Issues it is cited on

section 36(1)(ii)dividend distribution taxsection 36(1)section 36salaryscrutiny assessmentcompanysection 143businesssection 143(3)total incomeperson

Judgments citing Loyal Motor Service Co. Ltd. v. CIT

Deputy Commissioner of Income Tax Circle 2 1 1 Ahmedabad, Ahmedabad vs. Khyati Chemicals Private Limited, Ahmedabad

In the result, the appeal filed by the Revenue is hereby allowed

ITA 1856/AHD/2025[2018-19]Status: DisposedITAT Ahmedabad16 Jan 2026AY 2018-19

Bench: DR. BRR Kumar (Vice President), Shri T. R. Senthil Kumar (Judicial Member)

Section 143(3)Section 198Section 37(1)Section 40ASection 40A(2)(b)

…ntended to prevent an escape from taxation by describing a payment as remuneration when, in fact ordinarily it should have reached the shareholders as profit or dividend as held by the Hon'ble High Court of Bombay in Loyal Motor Services Company Ltd. vs. CIT (14 ITR 647). It is pointed out, that had the assessee paid dividend 2.40 crore, the income of the company would have gone up by Rs.2.40 crore on which tax at the rate of 33% would have been payable which came to Rs. 80. 00 lacs. In addition, the company would also have to pay dividend distribution tax at the rate of 20.36% on the entire amount of dividend wh…

Deputy Commissioner of Income Tax, Circle 3(1)(1), Bengaluru vs. Nutricraft India Private Limited, Bengaluru

In the result appeal filed by the learned assessing officer is partly allowed for statistical purposes

ITA 298/BANG/2024[2017-18]Status: DisposedITAT Bangalore16 Dec 2025AY 2017-18

Bench: Shri Prashant Maharishi & Shri Soundararajan K.Assessment Year : 2017-18

For Appellant: Shri Muthu Shankar, CIT(DR)(ITAT), BengaluruFor Respondent: Smt. Suman Lunkar, CA
Section 143(3)Section 148ASection 153CSection 194C(6)Section 194C(7)Section 36(1)(ii)Section 40

…urce. Therefore, the learned CIT – A has correctly deleted the above disallowance. She further relied upon the decision of the Hon’ble Delhi High Court in case of CIT versus Carrier Launcher India Ltd 20 taxmann.com 637, Loyal Motor Services Co Ltd versus CIT 14 ITR 647 (Bombay), AMD Plast Private Limited versus DCIT 20 taxmann.com 647. It was submitted that this issue is squarely covered in favour of the assessee. 17. She further submitted that the decision of the SRC Aviation Private Limited of Hon’ble Delhi High Court placed at paper book page No. 177 – 188 in 140 taxmann.com 193 (Delhi) is distinguishable be…

Deputy Commissioner of Income Tax Circle 1(1)(1), Vadodara vs. Ami Life Science Private Limited, Vadodara

In the result, the appeal of the Department is dismissed

ITA 18/AHD/2025[2017-18]Status: DisposedITAT Ahmedabad22 Apr 2025AY 2017-18

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Shri Abbas Gulamhusainwala, A.RFor Respondent: Shri Kavam Limbasiya, Sr. DR
Section 36(1)(ii)

…td. Asst. Year-2017-18 3- 5. 6. During the course of hearing before us, the counsel for the assessee, after explaining the facts already explained to AO and CIT(A), relied on the following judicial pronouncements: - • • • Loyal Motor Services Co. Ltd. [1946] (14 ITR 647) (Bombay). AMD Metaplat (P) Ltd. [2012] 20 taxmann.com 647 (Delhi). Controls & Switchgear Contractors Ltd. [2014] 47 taxmann.com 141 (Delhi). 7. We noted that the AO in his entire assessment order was failed to provide any evidence that the company has made the payment of commission only to avoid DDT. On the contrary, the assessee could provide su…

Ami Life Sciences Pvt. Ltd., Vadodara vs. The ACIT, Circle-1(1)(1), Vadodara

Accordingly, the disallowance made by the AO and confirmed by the Ld.CIT(A) is deleted, and the assessee's claim is allowed in full

ITA 544/AHD/2023[2016-17]Status: DisposedITAT Ahmedabad15 Jul 2024AY 2016-17

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokar, Accountnat Member आयकर अपील सं /Ita No.544/Ahd/2023 "नधा"रण वष" /Assessment Year : 2016-17 Ami Life Sciences Pvt.Ltd. The Acit बनाम/ 701 To 710 Lilleria 1038 Circle-1(1)(1) Next To Zydex Office Vadodara V/S. Gotri Sevasi Road Vadodara – 390 020 (Gujarat) "थायी लेखा सं./Pan: अपीलाथ"/ (Appellant) ….. "" यथ"/ (Respondent) Assessee By : Shri S.N. Soparkar, Sr.Advocate Revenue By : Shri Sudhakar Verma, Sr.Dr सुनवाई क" तार"ख/Date Of Hearing : 04/07/2024 घोषणा क" तार"ख /Date Of Pronouncement: 15/07/2024 आदेश/O R D E R Per Shri Makarand V. Mahadeokar, Am: This Appeal Is Filed By The Assessee As Against The Order Dated 12/06/2023 Passed By The Ld.Commissioner Of Income-Tax(Appeals) - National Faceless Appeal Centre (Nfac), Delhi [Hereinafter Referred To As “The Ld.Cit(A)” In Short], Arising Out Of The Assessment Order Dated 21/12/2018 Passed By The Assessing Officer (Ao) Under Section 143(3) Of The Income Tax Act, 1961 (Hereinafter Referred To As "The Act") Relevant To The Assessment Year (Ay) 2016-17. Ami Life Sciences Pvt.Ltd. Vs. Acit Asst. Year : 2016-17 2 Facts Of The Case:

For Appellant: Shri S.N. Soparkar, Sr.AdvocateFor Respondent: Shri Sudhakar Verma, Sr.DR
Section 143(2)Section 143(3)Section 36Section 36(1)(ii)

…stified.” On Ground Nos. 1 to 5 6. During the course of hearing before us, the counsel for the assessee, after explaining the facts already explained to AO and CIT(A), relied on the following judicial pronouncements: - Loyal Motor Services Co. Ltd. [1946] (14 ITR 647) (Bombay). - AMD Metaplat (P) Ltd. [2012] 20 taxmann.com 647 (Delhi). - Controls & Switchgear Contractors Ltd. [2014] 47 taxmann.com 141 (Delhi). 7. We noted that the AO in his entire assessment order was failed to provide any evidence that the company has made the payment of commission only to avoid DDT. On the contrary, the assessee could provi…

Micropoint Computers Private Limited, Mumbai vs. Deputy Commissioner of Income Tax 10(2)(2), Mumbai

In the result, the appeal by the assessee is allowed

ITA 3414/MUM/2023[2015-16]Status: DisposedITAT Mumbai22 Apr 2024AY 2015-16

Bench: Shri Prashant Maharishi & Shri Sandeep Singh Karhail

For Appellant: Shri Bhupendra ShahFor Respondent: Smt. Mahita Nair
Section 143(3)Section 234ASection 250Section 271(1)(c)Section 36Section 36(1)(ii)Section 40ASection 40A(2)(b)

…ion. 10. We find that while interpreting the provisions of section 10(2)(x) of the Income Tax Act, 1922, which corresponds to the provisions of section 36(1)(ii) of the Act, the Hon’ble jurisdictional High Court in Loyal Motors Service Co Ltd v/s CIT, [1946] 14 ITR 647 (Bom.) held that the term “such sum” only refers to the last and only antecedent, which is “any sum” paid as a commission or bonus, and therefore unless the commission or bonus would be paid as profits or dividends the exception to the allowance does not operate. Thus, it was held that the sum included under the expression “such sum” must be the s…

Tata Chemicals Ltd, Mumbai vs. ACIT 2(3), Mumbai

Appeal is hereby dismissed as infructuous

ITA 6900/MUM/2012[2007-08]Status: DisposedITAT Mumbai31 Mar 2023AY 2007-08
Section 143(3)Section 144C(5)

…IN THE INCOME TAX APPELLATE TRIBUNAL, ‘J‘ BENCH MUMBAI BEFORE: SHRI M.BALAGANESH, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA No.6900/Mum/2012 (Assessment Year :2007-08) & M/s. Tata Chemicals Limited Vs. Deputy Commissioner of 24, Homi Mody Street Income Tax-2(3) Bombay House, Aaykar Bhavan Fort, Mumbai – 400 001 M.K.Road, Mumbai- 400 020 PAN/GIR No.AAACT4059M (Appellant) .. (Respondent) Assessee by Shri Nitesh Joshi Revenue by Shri Manoj Kumar Date of Hearing 15/03/2023 Date of Pronouncement 31/03/2023 आदेश / O R D E R PER M. BALAGANESH (A.M): This appeal in ITA No.9057/Mum/2010, IT…

Tata Chemicals Ltd, Mumbai vs. ACIT 2(3), Mumbai

Appeal is hereby dismissed as infructuous

ITA 8710/MUM/2011[2007-08]Status: DisposedITAT Mumbai31 Mar 2023AY 2007-08
Section 143(3)Section 144C(5)

…IN THE INCOME TAX APPELLATE TRIBUNAL, ‘J‘ BENCH MUMBAI BEFORE: SHRI M.BALAGANESH, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA No.6900/Mum/2012 (Assessment Year :2007-08) & M/s. Tata Chemicals Limited Vs. Deputy Commissioner of 24, Homi Mody Street Income Tax-2(3) Bombay House, Aaykar Bhavan Fort, Mumbai – 400 001 M.K.Road, Mumbai- 400 020 PAN/GIR No.AAACT4059M (Appellant) .. (Respondent) Assessee by Shri Nitesh Joshi Revenue by Shri Manoj Kumar Date of Hearing 15/03/2023 Date of Pronouncement 31/03/2023 आदेश / O R D E R PER M. BALAGANESH (A.M): This appeal in ITA No.9057/Mum/2010, IT…

Tata Chemicals Ltd, Mumbai vs. DCIT 2(3), Mumbai

Appeal is hereby dismissed as infructuous

ITA 9057/MUM/2010[2006-07]Status: DisposedITAT Mumbai31 Mar 2023AY 2006-07
Section 143(3)Section 144C(5)

…IN THE INCOME TAX APPELLATE TRIBUNAL, ‘J‘ BENCH MUMBAI BEFORE: SHRI M.BALAGANESH, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA No.6900/Mum/2012 (Assessment Year :2007-08) & M/s. Tata Chemicals Limited Vs. Deputy Commissioner of 24, Homi Mody Street Income Tax-2(3) Bombay House, Aaykar Bhavan Fort, Mumbai – 400 001 M.K.Road, Mumbai- 400 020 PAN/GIR No.AAACT4059M (Appellant) .. (Respondent) Assessee by Shri Nitesh Joshi Revenue by Shri Manoj Kumar Date of Hearing 15/03/2023 Date of Pronouncement 31/03/2023 आदेश / O R D E R PER M. BALAGANESH (A.M): This appeal in ITA No.9057/Mum/2010, IT…

Src Aviation Pvt.Ltd vs. Assisstant Commissioner of Income Tax & Anr

ITA/492/2019HC Delhi13 Apr 2022

Bench: HON'BLE MR. JUSTICE MANMOHAN,HON'BLE MR. JUSTICE DINESH KUMAR SHARMA

Section 15Section 260ASection 36

…igned Judgement. NEUTRAL CITATION NO: 2022/DHC/001342 ITA 492/2019 & ITA 41/2020 Page 6 of 12 19. In Loyal Motor Service Company Limited v. Commissioner of Income Tax (1946) 14 ITR 647 (Bom.) it was inter alia held as under: “Now the facts as shown by the reference are that this company was formed by fourteen persons, thirteen of whom were originally owner- drivers of motorvehicles, the fourteenth member contributing in money. The thirteenth not only contributed their motor vehicles but also their services and accordingl…

Pr. Commissioner of Income Tax-1 vs. Bmo Advisors Pvt. Ltd

ITA/82/2022HC Delhi11 Apr 2022

Bench: HON'BLE MR. JUSTICE MANMOHAN,HON'BLE MR. JUSTICE DINESH KUMAR SHARMA

Section 36(1)(ii)Section 40ASection 40A(2)(b)

…t year if the same “fundamental aspect” permeates in different assessment years. 7. In any event, the interpretation of Section 36(1)(ii) is fairly well settled. The Bombay High Court in Loyal Motor Service Company Limited v. Commissioner of Income Tax (1946) 14 ITR 647 (Bom.) has held as under:- “Now the facts as shown by the reference are that this company was formed by fourteen persons, thirteen of whom were originally owner- drivers of motor vehicles, the fourteenth member contributing in money. The thirteenth not only contributed their motor vehicles but also their services and accordingly become employees o…

Mehta Equities Limited, Mumbai vs. DCIT -4 (2) (2), Mumbai

In the result, this appeal by the assessee is partly allowed for statistical purposes

ITA 5850/MUM/2019[2012-13]Status: DisposedITAT Mumbai14 Oct 2020AY 2012-13
Section 115JSection 143(3)Section 14ASection 36

…below have relied upon the ITAT Special Bench decision in the case of M/s Dalai & Broacha Stock Broking Pvt. Ltd. (131 ITD 36). The Assessing Officer has quoted also from Hon'ble Bombay High Court decision in the case of Loyal Motor Service Co. Ltd. Vs. CIT (14 ITR 647). The paragraph quoted by the Assessing Officer from Special bench decision is as under :- 'The object behind the provisions of section 36(1)(ii) is to allow deduction on account of any expenditure on account of payment of bonus or commission lo an employee even if the said payment is made out of profits of the assessee subject to the conditions…

Trent Ltd, Mumbai vs. Addl. C.I.T.-2(3), Mumbai

ITA 5775/MUM/2011[2007-08]Status: DisposedITAT Mumbai15 Jul 2020AY 2007-08

Bench: Shri C.N. Prasad, Hon'Ble & Shri S. Rifaur Rahman, Hon'Blem/S. Trent Ltd., V. Add. Cit – 2(3) Bombay House, 2Nd Floor, 24 Aayakar Bhavan, M.K. Road Homi Mody Street, Fort Mumbai Mumbai – 400 001 Pan: Aaacl1838J (Appellant) (Respondent) Addl. Cit – 2(3) V. M/S. Trent Ltd., Room No. 556, 5Th Floor Bombay House, 2Nd Floor, 24 Aayakar Bhavan, M.K. Road Homi Mody Street, Fort Mumbai - 400 020 Mumbai – 400 001 Pan: Aaacl1838J (Appellant) (Respondent) M/S. Trent Ltd., V. Dy. Cit – 2(3) Bombay House, 2Nd Floor, 24 Aayakar Bhavan, M.K. Road Homi Mody Street, Fort Mumbai Mumbai – 400 001 Pan: Aaacl1838J (Appellant) (Respondent)

Section 14ASection 35DSection 37(1)

…hares and also paid commission, the commission paid to them according to the Assessing Officer is not allowable u/s. 36(1)(ii) of the Act. He placed reliance on the decision of the Hon'ble Bombay High Court in the case of Loyal Motor Service Co. Ltd., v. CIT [14 ITR 647]. On appeal Ld.CIT(A) sustained the disallowance made by the Assessing Officer. 67. Ld. Counsel for the assessee submits that the Assessee paid commission of ₹.5,00,000 to Mr. K.N. Suntook (non-executive director) and commission of ₹.53,25,000 to Mr. Neol Tata during the year under consideration for services rendered by them to the assessee compa…

Addl. CIT, New Delhi vs. M/S. A B Pal Electricals Pvt. Ltd., Delhi

In the result, the appeal of the revenue in ITA

ITA 6645/DEL/2016[2011-12]Status: DisposedITAT Delhi11 Mar 2020AY 2011-12

Bench: Sh. H. S. Sidhu & Shri N. K. Billaiyaacit, Vs M/S. A B Pal Electrical Pvt. Spl. Range-1, Ltd., 1826, Bhagirath Place, New Delhi Chandni Chowk, Delhi-06

For Appellant: Sh. Rajkumar, C.AFor Respondent: Sh. Sanjeev Goel, CIT-D.R
Section 133(6)Section 145(3)Section 36(1)(va)

…void Dividend Distribution Tax, the assessee has conveniently passed on the profit of the company through commissions to the directors. Strong reliance was placed on the decision of the Hon'ble Mumbai High Court in the case of Motor Service Company Limited 14 ITR 647 and also on the decision of the Tribunal in the case of Dalai Broacha Stock Broking Pvt Ltd 10 ITR 0357 [Trib]. 28. Per contra, the ld. counsel for the assessee reiterated what has been stated before the lower authorities and once again stated that similar disallowance was made in Assessment Year 2010-11 which was deleted and also furnished copy…

Jay Precision Products (India) Private Limited, Mumbai vs. Assistant Commissioner of Income Tax 10(2)(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 972/MUM/2018[2013-14]Status: DisposedITAT Mumbai14 Oct 2019AY 2013-14

Bench: Sri Mahavir Singh, Jm & Sri M Balaganesh, Am आयकर अपील सुं./ Ita No. 972/Mum/2018 (यिर्ाारण वर्ा / Assessment Year 2013-14) आयकर अपील सुं./ Ita No. 2557/Mum/2018 (यिर्ाारण वर्ा / Assessment Year 2014-15) Jay Precision Products (India) The Asst. Commissioner Of Private Limited Income Tax, Circle 10(2)(1), 12A, Colopen Compound, Old बनाम/ Room No. 209, 2Nd Floor, Nagardas Road, Andheri (East), Aayakar Bhavan, Vs. Mumbai-400 059 Mumbai-400 020 (अपीलार्थी / Appellant) (प्रत्यर्थी/ Respondent) स्र्थायी लेखा सुं./Pan No. Aabcj3642D अपीलार्थी की ओर े / Appellant By : Shri Dharmesh Shah, Ar प्रत्यर्थी की ओर े / Respondent By : Shri Rajeev Gubgotra, Dr ुिवाई की तारीख / Date Of Hearing: 17.07.2019 घोर्णा की तारीख / Date Of Pronouncement : 14.10.2019

For Appellant: Shri Dharmesh Shah, ARFor Respondent: Shri Rajeev Gubgotra, DR
Section 143(3)Section 250Section 36Section 36(1)(ii)Section 40A

…t the AO has examined the facts of the case in the back ground of decision of the Hon'ble Special Bench in the case of M/s Dalal and Broacha stock Broking Pvt. Ltd. 11 taxmann.com 426 (Mumbai) (SB), Loyal Motor Service Co. Ltd. vs. Commissioner of Income Tax, 14 ITR 647, and categorically 14 | P a g e ITA Nos.972 & 2557 /Mum/2018 concluded that this was a part of design not to pay dividend and payment of commission to the major shareholders in lieu of dividend were made, in order to avoid dividend distribution tax and higher tax of the company. The same was affirmed by the CIT(A). 8. We have gone through the doc…

Jay Precision Products (India) Private Limited, Mumbai vs. Assistant Commissioner of Income Tax 10(2)(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 2557/MUM/2018[2014-15]Status: DisposedITAT Mumbai14 Oct 2019AY 2014-15

Bench: Sri Mahavir Singh, Jm & Sri M Balaganesh, Am आयकर अपील सुं./ Ita No. 972/Mum/2018 (यिर्ाारण वर्ा / Assessment Year 2013-14) आयकर अपील सुं./ Ita No. 2557/Mum/2018 (यिर्ाारण वर्ा / Assessment Year 2014-15) Jay Precision Products (India) The Asst. Commissioner Of Private Limited Income Tax, Circle 10(2)(1), 12A, Colopen Compound, Old बनाम/ Room No. 209, 2Nd Floor, Nagardas Road, Andheri (East), Aayakar Bhavan, Vs. Mumbai-400 059 Mumbai-400 020 (अपीलार्थी / Appellant) (प्रत्यर्थी/ Respondent) स्र्थायी लेखा सुं./Pan No. Aabcj3642D अपीलार्थी की ओर े / Appellant By : Shri Dharmesh Shah, Ar प्रत्यर्थी की ओर े / Respondent By : Shri Rajeev Gubgotra, Dr ुिवाई की तारीख / Date Of Hearing: 17.07.2019 घोर्णा की तारीख / Date Of Pronouncement : 14.10.2019

For Appellant: Shri Dharmesh Shah, ARFor Respondent: Shri Rajeev Gubgotra, DR
Section 143(3)Section 250Section 36Section 36(1)(ii)Section 40A

…t the AO has examined the facts of the case in the back ground of decision of the Hon'ble Special Bench in the case of M/s Dalal and Broacha stock Broking Pvt. Ltd. 11 taxmann.com 426 (Mumbai) (SB), Loyal Motor Service Co. Ltd. vs. Commissioner of Income Tax, 14 ITR 647, and categorically 14 | P a g e ITA Nos.972 & 2557 /Mum/2018 concluded that this was a part of design not to pay dividend and payment of commission to the major shareholders in lieu of dividend were made, in order to avoid dividend distribution tax and higher tax of the company. The same was affirmed by the CIT(A). 8. We have gone through the doc…

DCIT, New Delhi vs. Mr. Bmr Business Solutions Pvt. Ltd., Gurgaon

In the result, both the 02 appeals filed by the Revenue stand

ITA 2991/DEL/2016[2012-13]Status: DisposedITAT Delhi10 May 2019AY 2012-13

Bench: Sh. H.S. Sidhu & Shri O.P. Kant

Section 142(1)Section 143(1)Section 143(2)Section 36(1)(ii)

…y. However, in the instant case the assessee company has declared No Dividend. Hence, the contention of the assessee company was not acceptable. AO has referred view expressed by the Hon’ble Bombay High Court in Loyal Motor Service Co. Ltd. vs. CIT (1946), 14 ITR 647 as under:- “The restriction that such bonus or commission should not have been payable to employee as profits or dividend has been obviously designed to check, inter alia, private companies from avoiding tax by distributing their profits to their members as bonus or commission instead of dividend.” 2.1 AO further observed that in the instant c…

DCIT, New Delhi vs. Mr. Bmr Business Solutions Pvt. Ltd., Gurgaon

In the result, both the 02 appeals filed by the Revenue stand

ITA 2990/DEL/2016[2011-12]Status: DisposedITAT Delhi10 May 2019AY 2011-12

Bench: Sh. H.S. Sidhu & Shri O.P. Kant

Section 142(1)Section 143(1)Section 143(2)Section 36(1)(ii)

…y. However, in the instant case the assessee company has declared No Dividend. Hence, the contention of the assessee company was not acceptable. AO has referred view expressed by the Hon’ble Bombay High Court in Loyal Motor Service Co. Ltd. vs. CIT (1946), 14 ITR 647 as under:- “The restriction that such bonus or commission should not have been payable to employee as profits or dividend has been obviously designed to check, inter alia, private companies from avoiding tax by distributing their profits to their members as bonus or commission instead of dividend.” 2.1 AO further observed that in the instant c…

Hero Motocorp Ltd., New Delhi vs. DCIT, Circle- 11(1), New Delhi

Appeal of the assessee is partly allowed for statistical purpose

ITA 1351/DEL/2018[2009-10]Status: DisposedITAT Delhi23 Apr 2019AY 2009-10

Bench: Shri N. K. Billaiya & Ms Suchitra Kamble

For Appellant: Amount of Proposed international
Section 115JSection 143(3)Section 144C

…n paid as bonus/commission. 20. The issue has been considered by this Court in AMD Metplast (P.) Ltd v. Dy. CIT [2012] 341 ITR 563 / 20 taxmann.com 647 (Delhi) in the light of the judgment of the Bombay High Court in Loyal Motor Service Co. Ltd vs. CIT [1946] 14 ITR 647. It was observed that the judgment of the Bombay High Court (supra) does not assist the revenue and that so long as the bonus or commission is paid to the directors for services rendered and as part of their terms of employment it has to be allowed and sec.36(1)(ii) does not apply. 120 21. Having regard to the above legal position and the factual…

Jurimatrix Services India Pvt Ltd, Bengaluru vs. Assistant Commissioner of Income Tax, Circle-4(1)(1), Bangaluru

In the result, the appeal filed by the assessee is partly allowed

ITA 1652/BANG/2018[2014-15]Status: DisposedITAT Bangalore05 Apr 2019AY 2014-15

Bench: Shri Arun Kumar Garodia & Shri Pavan Kumar Gadaleassessment Years : 2014 – 15 M/S. Jurimatrix Services India Pvt. Ltd., Manyata Tech Park, G4 Block, The Acit, Aspen Building, Level – 2, Vs. Circle – 4(1) (1), Rachenahalli, Nagawara, Bangalore. Outer Ring Road, Bangalore – 560 045. Pan: Aabcj6157D Appellant Respondent Appellant By : Shri K. R. Girish, C. A. Respondent By : Shri T. N. Prakash, Addl.Cit (Dr) Date Of Hearing : 03.04.2019 Date Of Pronouncement : 05.04.2019

For Appellant: Shri K. R. Girish, C. AFor Respondent: Shri T. N. Prakash, Addl.CIT (DR)
Section 271Section 36Section 36(1)(ii)

…s involved concurrent findings on pure questions of fact. Moreover, a Division Bench of this Court in Metplast Pvt. Ltd. v. DCIT, (2012) 341 1TR 563, after referring to the judgment of the Bombay High Court in Loyal Motors Services Company Ltd. v. CIT. (1946) 14 ITR 647 opined that the commission, if found to be paid for services rendered by the director as per the terms of the appointment, cannot be said to be distribution of dividend or profits in the guise of commission. It was noticed that while commission was paid as a form of remuneration for actual services rendered, dividend is a return of investment and…

DCIT Cir 7(1), Mumbai vs. Nat Steel Equipment P.Ltd, Mumbai

The appeal of the assessee is partly allowed for

ITA 7175/MUM/2014[2011-12]Status: DisposedITAT Mumbai27 Aug 2018AY 2011-12

Bench: Shri Joginder Singh & Shri Rajesh Kumarassessment Years: 2011-12 M/S Nat Steel Equipment Dcit-7(1), Private Limited, Mumbai बनाम/ G.D. Ambekar Marg, Vs. Naigaum Road, Mumbai-400014 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aaacn5119J Assessment Years: 2011-12 Dcit-7(1), M/S Nat Steel Equipment Mumbai बनाम/ Private Limited, G.D. Ambekar Marg, Vs. Naigaum Road, Mumbai-400014 (राज"व /Revenue) ("नधा"रती /Assessee) Pan. No. Aaacn5119J M/S Nat Steel Equipment Pvt. Ltd.

Section 143(3)Section 234B

…d on 30.03.2009 in itself raised serious doubts as regards the genuineness and veracity of the transaction under consideration. The ld. D.R took us through the judgment of the Hon’ble High Court of Bombay in the case of Loyal Works Company Ltd. Vs. CIT (1946) 14 ITR 647 (Bom), wherein the High Court in the backdrop of the facts involved in the case before them, had observed that for allowability of a sum paid to an employee as bonus or commission under the then provisions of Sec. 10(2)(x) of the Indian Income Tax, 1922 [which is pari materia to Sec. 36(1)(ii) of the Act], it was obligatory on the part of the asse…

Loyal Motor Service Co. Ltd. v. CIT (14 ITR 647) — Cited in 48 Judgments | BharatTax