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 366,339 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

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

The appeal of the assessee is partly allowed for

ITA 7142/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…

Colour Publications P.Ltd, Mumbai vs. Pr CIT 2, Mumbai

In the result, appeal filed by the assessee is allowed

ITA 4023/MUM/2017[2012-13]Status: DisposedITAT Mumbai14 Aug 2018AY 2012-13
Section 143Section 143(3)Section 263Section 36Section 36(1)Section 36(1)(ii)Section 40Section 40A(2)

…judicial to the interest of the revenue. 4. The PCIT, after considering relevant submissions of the assessee and also relying upon certain judicial precedents including the decision of Hon’ble Bombay High Court in the case of Loyal Motor Service Co vs CIT 14 ITR 647 (Bom) observed that the assessee has paid performance bonus @51% of gross revenue to the highest shareholder Shri Dilip Raghavan, who holds 35.27% share. The PCIT, further observed that the remaining part of share capital is held by his family members. The bonus paid to the directors is around 75% of net profit of the company which is highly u…

Hero Motocorp Ltd., New Delhi vs. Addl.CIT, Range-11, New Delhi

In the result ground No

ITA 6990/DEL/2017[2013-14]Status: DisposedITAT Delhi20 Jun 2018AY 2013-14

Bench: Shri R. K. Panda & Ms Suchitra Kamblei.T.A. No. 6990/Del/2017 (A.Y 2013-14)

Section 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. 21. Having regard to the above legal position and the factual find…

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

ITA 4011/MUM/2013[2009-10]Status: DisposedITAT Mumbai13 Jun 2018AY 2009-10

Bench: Shri R.C.Sharma, Am & Shri Ravish Sood, Jm Ita Nos. 4011 & 5070/Mum/2013 (निर्धारण वषा / Assessment Years: 2009-10 & 2010-11) M/S Nat Steel Equipment Dcit-7(1), Room No. 622, Private Limited, G.D. Ambedkar Aaykar Bhawan, M.K Road, बिधम/ Marg, Naigaum Road, Churchgate, Mumbai 400 020. Vs. Bombay- 400014. स्थामी रेखा सं./ जीआइआय सं./ Pan No. Aaacn5119J (अऩीराथी /Appellant) (प्रत्मथी / Respondent) :

For Appellant: Shri Deepak Tralashwala, A.RFor Respondent: Shri Suman Kumar, D.R
Section 143(1)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…

Hero Motocorp Ltd., New Delhi vs. DCIT, New Delhi

In the result appeal No. 2424/Del/ 2015 filed by the revenue in assessment year 2010-11 is partly allowed

ITA 1616/DEL/2017[2012-13]Status: DisposedITAT Delhi13 Jun 2018AY 2012-13

Bench: Shri R. K. Panda & Ms Suchitra Kamble

Section 143(3)Section 144CSection 92C

…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. 107 21. Having regard to the above legal position and the factual…

M/S. the Alchemists Ark Private Ltd., Pune vs. Income-Tax Officer

In the result, appeal of the assessee is allowed for statistical

ITA 755/PUN/2016[2011-12]Status: DisposedITAT Pune09 May 2018AY 2011-12

Bench: Shri D.Karunakara Rao, Am & Shri Vikas Awasthy, Jm आयकर आयकर अपील आयकर आयकर अपील अपील संसंसंसं. / Ita No.755/Pun/2016 अपील िनधा"रण िनधा"रण वष" िनधा"रण िनधा"रण वष" वष" / Assessment Year : 2011-12 वष"

For Appellant: Shri Suhas BoraFor Respondent: Shri Ajay Modi, JCIT
Section 143(3)Section 36(1)(ii)Section 37(1)

…IT 131 ITD 36 (ITAT Mumbai-SB) for the proposition that the commission paid to the Director attracts the provisions of section 36(1)(ii) of the Act. AO also relied on the judgment of Hon’ble Bombay High Court in the case of M/s. Loyal Motor Services Co. Ltd. 14 ITR 647 (Bom.) and held that the facts are comparable. Heavily relying on the judgment of Special Bench of the Tribunal in the case of M/s.Dalal Broacha Stock Broking Pvt. Ltd. Vs. ACIT (supra), judgment of Bombay High Court in the case of Subodh Chandra Poppatlal Vs. CIT 24 ITR 566 (Bom.) and others, AO treated the bonus of Rs.30 lakhs paid to the Dir…

Kshitij Interriors P.Ltd, Mumbai vs. DCIT OSD- 8(2), Mumbai

In the result, appeal of the assessee is allowed

ITA 5151/MUM/2014[2011-12]Status: DisposedITAT Mumbai12 Jan 2018AY 2011-12

Bench: Shri R.C.Sharma, Am & Shri Ravish Sood, Jm M/S. Kshitij Interiors Pvt. Ltd., Vs. Dcit Osd- 8(2) 210, New Apollo Estate Premises Aayakar Bhavan Co-Op Society Ltd., Old Nagardas M.K.Road, Road-23 Mumbai- 400 020 Mogra Village, Andheri (E) Mumbai – 400 069 Pan/Gir No.Aabck8174D Appellant) Respondent) ..

Section 143(3)Section 36Section 36(1)(ii)

…MD Metplast Pvt. Ltd. vs. DCIT High Court of Delhi (2012) 341 1TR 563 (Delhi), C1T vs. Career Launcher India Ltd. High Court of Delhi (2012) 71 DTR (Del) 161, Shahzada Hand & Sons vs. CIT (1977) 108 ITR 358 (SC) and Loyal Motor Service Co. Ltd. vs. CIT (1946) 14 ITR 647 (BOM) . 9. Applying the proposition of law laid down in the above judicial pronouncements to the facts of the instant case alongwith fact that Mr.Bhawarlal Sharma being a technical person looking after entire work of the company had been paid reasonable commission of Rs.3,29,900/- looking to the efforts made by him during the course of business an…

DCIT, New Delhi vs. M/S. Caryaire Equipment India Pvt. Ltd., Noida

In the result, the appeal of the Revenue is dismissed

ITA 2951/DEL/2014[2006-07]Status: DisposedITAT Delhi20 Sept 2017AY 2006-07

Bench: : Shri I.C. Sudhir & Shri L.P. Sahu

Section 80Section 80I

…hat bonus would not have been payable to the directors as profits or dividend had it not been paid as bonus/commission as contemplated u/s. 36(1)(ii) of the Act. Reliance was placed on the decision of Bombay High Court in Loyal Motor Service Co. Ltd. vs. CIT, 14 ITR 647. The ld. CIT(A) has deleted the addition vide impugned ITA No. 2951/Del./2014 6 order, which has been challenged by the Revenue by way of ground No. 2 of appeal. 5. We have heard the submissions of both the parties and have gone through the material on record. 6. The ld. DR relying on the order of Assessing Officer, submitted that the ld. CIT(…

U.B. Cotton P. Ltd, Mumbai vs. DCIT 2(3), Mumbai

In the result appeal is partly allowed

ITA 3357/MUM/2012[2008-09]Status: DisposedITAT Mumbai31 May 2017AY 2008-09

Bench: Shri Mahavir Singh () & Shri N.K. Pradhan () Assessment Year: 2008-09

For Appellant: Shri Nitesh Joshi, ARFor Respondent: Shri B.S. Bist, DR
Section 133(6)Section 143(3)Section 14A

…t as director in the company. Being a person holding shares of the assessee- company, the director becomes entitled to dividend which again is the appropriation of the profits. The A.O. therefore relied on the decision in Loyal Motors Service Co. Ltd. vs. CIT 14 ITR 647 (Bom.) and disallowed u/s 36(1) (ii) the commission of Rs.94,59,161/- paid to the employee-directors. 4.2. Aggrieved by the order of the A.O., the assessee preferred an appeal before the Ld. CIT(A). We find that the Ld. CIT(A) dismissed the appeal of the assessee on the above issue for the reason that Mr. U.B. Thakkar holds 50% shares and Ms. R.…

Hero Motocorp Limited, New Delhi vs. JCIT, New Delhi

In the result appeal of the assessee in ITA No

ITA 1545/DEL/2015[2010-11]Status: DisposedITAT Delhi24 Oct 2016AY 2010-11

Bench: Sh. I. C. Sudhir & Shri Prashant Maharishihero Motocorp Limited, Jcit, 34, Basant Lok, Vasant Range-1, New Delhi Vs. Vihar, New Delhi Pan: Aaach0812J (Appellant) (Respondent) Dcit, M/S. Hero Moto Corp. Circle-11(1), Ltd., 34, Community Vs. New Delhi Centre, Basant Lok, Vasant Vihar, New Delhi-110057 (Appellant) (Respondent) Dcit, M/S. Hero Moto Corp. Circle-11(1), Ltd., 34, Community

For Appellant: Sh. Ajay Vohra, Sr. AdvFor Respondent: Sh. NC Sawain, CIT DR
Section 143Section 143(3)Section 144CSection 92C

…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 v . 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. 21. Having regard to the above legal position and the factual fin…

Prabhudas Lilladher P. Ltd., Mumbai vs. A.C.I.T.Cir.4(2), Mumbai

In the result, appeal filed by assessee is partly allowed and the appeal of the Revenue is dismissed as not maintainable by virtue Circular no

ITA 6309/MUM/2012[2007-08]Status: DisposedITAT Mumbai21 Sept 2016AY 2007-08

Bench: Shri R. C. Sharma & Shri Pawan Singh

For Appellant: Shri Vipul Joshi (AR)For Respondent: Shri R.A. Dhyani (DR)
Section 36Section 36(1)(ii)Section 37(1)Section 68Section 88E

…ment was in accordance with practice prevailing at the relevant time. The Hon’ble Delhi High Court in case of Convertech Equipments (P.) Ltd. (supra) while relying upon the decision of Hon’ble Bombay High Court in Loyal Motors Services Co. Ltd. vs. CIT [1946] 14 ITR 647 hold that if the commission found to be paid for services rendered by the Director as per the term of the appointment, cannot be said to be distribution of dividend or profit 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 on investment and is pa…

ACIT Cir 4(2), Mumbai vs. Kalpesh Synthetics P. Ltd, Mumbai

The appeal of the Revenue is dismissed

ITA 76/MUM/2014[2010-11]Status: DisposedITAT Mumbai20 Jul 2016AY 2010-11

Bench: Shri Joginder Singh & Shri Rajesh Kumarassessment Year: 2010-11 M/S. Kalpesh Synthetics P. Ltd. Acit, Circle 4(2) Gala No. 8, 1St Floor, Kuntal 6Th Floor, Aayakar Bhavan बनाम/ Modi Estate, L.B.S. Marg M.K. Road, Mumbai 400020 Vs. Ghatkopar (W), Mumbai 400086 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aaack6496P Assessment Year: 2010-11 Acit, Circle 4(2) M/S. Kalpesh Synthetics P. Ltd. 6Th Floor, Aayakar Bhavan Gala No. 8, 1St Floor, Kuntal बनाम/ M.K. Road, Mumbai 400020 Modi Estate, L.B.S. Marg Vs. Ghatkopar (W), Mumbai 400086 (राज"व /Revenue) ("नधा"रती /Assessee) Pan. No. Aaack6496P M/S. Kalpesh Synthetics P. Ltd. "नधा"रती क" ओर से / Assessee By Shri K. Shivaram Shri H.M. Wanare राज"व क" ओर से / Revenue By सुनवाई क" तार"ख / Date Of Hearing : 19/07/2016 20/07/2016 आदेश क" तार"ख /Date Of Order:

Section 36(1)(ii)

…ind that, under the facts discussed herein above and also available on record, the learned CIT(A) while granting relief to the assessee considered various decision including from Hon'ble jurisdictional High Court in Loyal Motor Service Company P. Ltd. vs. CIT 14 ITR 647, M/s. Dalal and Brocha Stock Broking P. Ltd. The percentage of shareholdings was considered alongwith decisions like CIT vs. Carrier Launcher India Ltd. (2012) 71 DTR (Del); 131 ITD 414. It is also noted that for Assessment year 2009-10 identical disallowance was made by the Assessing Officer under section 36(1)(ii) which was deleted by the CIT(A)…

Kalpesh Synthetics P.Ltd, Mumbai vs. Asst CIT Cir 4(2), Mumbai

The appeal of the Revenue is dismissed

ITA 6774/MUM/2013[2010-11]Status: DisposedITAT Mumbai20 Jul 2016AY 2010-11

Bench: Shri Joginder Singh & Shri Rajesh Kumarassessment Year: 2010-11 M/S. Kalpesh Synthetics P. Ltd. Acit, Circle 4(2) Gala No. 8, 1St Floor, Kuntal 6Th Floor, Aayakar Bhavan बनाम/ Modi Estate, L.B.S. Marg M.K. Road, Mumbai 400020 Vs. Ghatkopar (W), Mumbai 400086 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aaack6496P Assessment Year: 2010-11 Acit, Circle 4(2) M/S. Kalpesh Synthetics P. Ltd. 6Th Floor, Aayakar Bhavan Gala No. 8, 1St Floor, Kuntal बनाम/ M.K. Road, Mumbai 400020 Modi Estate, L.B.S. Marg Vs. Ghatkopar (W), Mumbai 400086 (राज"व /Revenue) ("नधा"रती /Assessee) Pan. No. Aaack6496P M/S. Kalpesh Synthetics P. Ltd. "नधा"रती क" ओर से / Assessee By Shri K. Shivaram Shri H.M. Wanare राज"व क" ओर से / Revenue By सुनवाई क" तार"ख / Date Of Hearing : 19/07/2016 20/07/2016 आदेश क" तार"ख /Date Of Order:

Section 36(1)(ii)

…ind that, under the facts discussed herein above and also available on record, the learned CIT(A) while granting relief to the assessee considered various decision including from Hon'ble jurisdictional High Court in Loyal Motor Service Company P. Ltd. vs. CIT 14 ITR 647, M/s. Dalal and Brocha Stock Broking P. Ltd. The percentage of shareholdings was considered alongwith decisions like CIT vs. Carrier Launcher India Ltd. (2012) 71 DTR (Del); 131 ITD 414. It is also noted that for Assessment year 2009-10 identical disallowance was made by the Assessing Officer under section 36(1)(ii) which was deleted by the CIT(A)…

M/S. Botil Oil Tools India Pvt. Ltd., New Delhi vs. ACIT, New Delhi

In the result, all the appeals of the assessee are allowed

ITA 5375/DEL/2013[2007-08]Status: DisposedITAT Delhi10 May 2016AY 2007-08

Bench: Shri G.D. Agrawalbefore Shri G.D. Agrawal & And Before Shri Before Shri G.D. Agrawalg.D. Agrawal & And Shri Sudhanshu Srivastava Shri Sudhanshu Srivastavashri Sudhanshu Srivastava Shri Sudhanshu Srivastava

For Appellant: Shri Anil Bhalla, CAFor Respondent: Shri Sarabjeet Singh, DR
Section 309Section 36(1)(ii)Section 37(1)

…2012-TIOL-1002-HC-DEL-IT where it is held as follows :- “Moreover, a Division Bench of this Court in Metaplast Pvt.Ltd. v. DCIT, (2012) 341 ITR 563, after referred 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 3 ITA-973/D/2010 & 3 others 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 while commission was paid as a form of remuneration for actual services rendered, dividend is a…

M/S. Botil Oil Tools (India) Pvt. Ltd., New Delhi vs. DCIT, New Delhi

In the result, all the appeals of the assessee are allowed

ITA 2382/DEL/2013[2006-07]Status: DisposedITAT Delhi10 May 2016AY 2006-07

Bench: Shri G.D. Agrawalbefore Shri G.D. Agrawal & And Before Shri Before Shri G.D. Agrawalg.D. Agrawal & And Shri Sudhanshu Srivastava Shri Sudhanshu Srivastavashri Sudhanshu Srivastava Shri Sudhanshu Srivastava

For Appellant: Shri Anil Bhalla, CAFor Respondent: Shri Sarabjeet Singh, DR
Section 309Section 36(1)(ii)Section 37(1)

…2012-TIOL-1002-HC-DEL-IT where it is held as follows :- “Moreover, a Division Bench of this Court in Metaplast Pvt.Ltd. v. DCIT, (2012) 341 ITR 563, after referred 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 3 ITA-973/D/2010 & 3 others 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 while commission was paid as a form of remuneration for actual services rendered, dividend is a…

M/S. Botil Oil Tools (India) Pvt. Ltd., New Delhi vs. DCIT, New Delhi

In the result, all the appeals of the assessee are allowed

ITA 973/DEL/2010[2006-07]Status: DisposedITAT Delhi10 May 2016AY 2006-07

Bench: Shri G.D. Agrawalbefore Shri G.D. Agrawal & And Before Shri Before Shri G.D. Agrawalg.D. Agrawal & And Shri Sudhanshu Srivastava Shri Sudhanshu Srivastavashri Sudhanshu Srivastava Shri Sudhanshu Srivastava

For Appellant: Shri Anil Bhalla, CAFor Respondent: Shri Sarabjeet Singh, DR
Section 309Section 36(1)(ii)Section 37(1)

…2012-TIOL-1002-HC-DEL-IT where it is held as follows :- “Moreover, a Division Bench of this Court in Metaplast Pvt.Ltd. v. DCIT, (2012) 341 ITR 563, after referred 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 3 ITA-973/D/2010 & 3 others 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 while commission was paid as a form of remuneration for actual services rendered, dividend is a…

Kshitij Interiors P.Ltd, Mumbai vs. DCIT 8(2), Mumbai

ITA 7367/MUM/2013[2010-11]Status: DisposedITAT Mumbai01 Jan 2016AY 2010-11
For Appellant: Shri Haridas BhatFor Respondent: Shri Asghar Zain
Section 143(3)Section 254(1)Section 36(1)(ii)Section 40

…me could have been distributed among the share holders in the form of dividend,that instead of paying dividend the assessee opted to distribute the profit to one of its directors in form of commission.The AO referred to the case of Loyal Motor Service Co.Ltd.(14 ITR 647) and held that by paying commission it had avoided full payment of tax,that intention of the provisions of section 36(1)(ii) was to prevent escapement of taxation in form of commission/bonus payment.He held that the commission paid to BKS in lieu of dividend was not eligible for deduction u/s.36(1)(ii)of the Act. 3.Aggrieved by the order of the AO…

V.S. International P.Ltd, Mumbai vs. Asst CIT 4(3), Mumbai

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

ITA 1581/MUM/2013[2009-10]Status: DisposedITAT Mumbai11 Dec 2015AY 2009-10

Bench: Shri N.K. Billaiya & Shri Pawan Singhआयकर अपील सं/ I.Ta No. 1581/Mum/2013 ("नधा"रण वष" / Assessment Year:2009-10 बनाम/ M/S. V.S. International The Acit-4(3), Pvt. Ltd., Mumbai Vs. 237, Sardar Griha Bldg., 198, Lokmanya Tilak Road, Mumbai-400 002 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaacv 7292C (अपीलाथ" /Appellant) (""यथ" / Respondent) .. अपीलाथ" ओर से/ Appellant By: Shri Aarti Vissanji ""यथ" क" ओर से/Respondent By: Shri Vivek Batra सुनवाई क" तार"ख / Date Of Hearing :07.12.2015 घोषणा क" तार"ख /Date Of Pronouncement :11.12.2015 आदेश / O R D E R

For Appellant: Shri Aarti VissanjiFor Respondent: Shri Vivek Batra
Section 36(1)(ii)

…ividend had it not been paid as bonus/commission. The issue has been considered by this court in AMD Metplast P. Ltd. v. Deputy CIT [2012] 341 ITR 563 (Delhi) in the light of the judgment of the Bombay High Court in Loyal Motor Service Co. Ltd. v. CIT [1946] 14 ITR 647 (Bom). 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 section 36(1)(ii) does not apply. Having regard to the above legal position and the factua…

Commissioner of Income Tax-I vs. Convertech Equpments Pvt. Ltd

ITA/669/2012HC Delhi03 Dec 2012
Section 143(1)Section 143(3)Section 147Section 148Section 36(1)(ii)

…volved concurrent findings on pure questions of fact. Moreover, a Division Bench of this Court in Metplast Pvt. Ltd. v. DCIT, (2012) 341 ITR 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…

CIT vs. Career Launcher India Ltd

In the result, the first three substantiaf questions of larry in ITA

ITA/911/2011HC Delhi19 Apr 2012

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE R.V.EASWAR

Section 260ASection 36Section 36(1)(iii)

…ividend had it not been paid as bonus/cornmission. 20. The issr-re has been considered by this Court in 'AMD Metplast Pvt. I-td vs DCtrT (2012) 341 ITR 563 in;the light of the judgrnent of the Bombay High Court in tr oysl Motqr Service Co. tr-td 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 renclered and as par1 of their terms of employment I it has to be allowed and sec.36(1)(ii) does not apply. g 2I. Having regard to the above legal position and the factual…