Law: Income Tax Act, 1922

Section: 10(2)(x),10(2)(XVI)

Income-tax Act, 1922 -- Sections 10(2)(x), 10(2)(xvi) -- Commission -- Company -- Commission paid to Executive Director in addition to his remuneration -- Executive Director also a share- holder of the company -- Commission paid whether admissible expenditure under Sec. 10(2)(xvi) and not under Sec. 10(2)(x) -- Held yes -- ORDER The Order was passed by AFZALUL HAQUE, President.---This appeal is preferred against the order of the AJCT, A-Range, Chittagong passed in Income-tax Appeal No.1.Coy. I of 1974-75 dated 2-3-1976 on the following grounds:- 1. "The learned Appellate Joint Commissioner of Taxes was wrong to disallow commission of Tk.8,639/- paid to the then Executive Director, Mr. X in accordance with his terms of appointment although the company made a substantial profit in the year concerned as a result of hard work put in by him and although he has been assessed Income-tax personally for this amount by the Income-tax Officer, Sylhet Circle II". 2. "The learned AJCT was not justified to uphold disallowing of Tk.1,689/- from the very reasonable amount of Tk. 2,839/- spent for general charges which included items like bakshish paid to railway staff, power of attorney registration favouring Bank which are directly related to the business of the company." 3. "Other ground, if, any will be submitted at the time of hearing." 2. The A.R. on behalf of the appellant presses only ground No.1 of the grounds of appeal. The assessee is a private limited company. In the assessment year in appeal the assessee derived income from carrying on business of the cold-storage, manufacture of ice and potato trading. Net profit disclosed as per profit and loss account for the assessment year ending on 30-12-1968 amounting to Tk.2,61,337/-. In this appeal we are concerned with the disallowance of commission amounting to Tk. 8.639/- paid to the then Executive Director of the Company Mr. X. The D.C.T. disallowed the commission paid to the Executive Director with the following observations:- "Executive Director's commission paid Tk.8,639/-. The payment was made effective during the year. But during the year the Executive Director did not render any special service for which such…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492