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The Assessing Officer was of the opinion that the commission paid to the directors would have been otherwise payable in the form of dividend and to avoid Dividend Distribution Tax, commission has been paid to the directors. The Assessing Officer, therefore, made addition of Rs. 73,18,516/- The undisputed fact is that there is no allegation that these persons are not working for the company. In our considered opinion, it is the prerogative of the assessee to decide the remuneration etc to be paid to the persons who work for his company. As per the agreement, six directors, who were also share holders, were paid additional salary termed as ‘commission’ and there are four employees who are also share holders who also have been paid salary with additional salary termed as ‘commission’. The total commission comes to 0.5% of the total turnover. Accordingly, appeal of revenuestand dismissed.

Shanti Prime Publication Pvt. Ltd.

Section  36, 144, 145 of Income Tax Act, 1961— Rejection of books—  the assessee is into the business of reselling of electrical goods. Return of income for the year under consideration was E-filed on 29.09.2011. Return was selected for scrutiny assessment and accordingly, statutory notices were issued and served upon the assessee.
The Assessing Officer also issued notices u/s 133(6) of the Income-tax Act,  in the cases of 64 parties on test check basis. According to the Assessing Officer, none of the parties were found existing/traceable at the address specified in the confirmations filed by the assessee. the Assessing Officer rejected the books of account u/s 145(3) of the Act and proceeded to estimate profit and made addition. The CIT(A) was of the opinion that though the Assessing Officer has rejected the books of account, but has not given any cogent reason for estimating the higher profit. He, accordingly, deleted the entire addition. 
Court, therefore, do not find any reason to interfere with the findings of the CIT(A). the appeal of the revenue as well as the cross objections of the assessee stand dismissed. ---  Asstt. CIt vs. AB PAL ELECTRICAL PVT. LTD.[2020] 23 ITCD Online 52 (DELHI)