Disallowance of Commission paid to Directors by AO

The Income Tax Appellate Tribunal (ITAT) heard an appeal concerning the disallowance of commission paid to directors by the Assessing Officer (AO). The AO had disallowed a sum of Rs. 65,79,166/-. However, both the Revenue and the assessee agreed that the issue was covered by a previous decision of the ITAT in the assessee's own case for the 2013-14 assessment year, where identical facts led to the deletion of such additions.

IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH: ‘F’: NEW DELHI)
(Through Video Conference)
BEFORE MS SUCHITRA KAMBLE, JUDICIAL MEMBER
AND
SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER
ITA No:- 3125/Del/2018
(Assessment Year: 2014-15)

Addl. CIT,
Special Range-9,
New Delhi.

vs

United Hotels Ltd.,
New Delhi.

Revenue By : Shri Jaspreet Singh Minhas, CIT (DR)
Assessee By : Shri Jagdish Ajmani, CA

The Assessee filed return of income declaring income of Rs.6,93,84,010/-. Vide Assessment Order dated 31.12.2016 under Section 143(3) of Income Tax Act, 1961 (“I.T. Act”, for short); income of the assessee was assessed at Rs. 8,85,63,176/- (rounded off to 8,85,63,180/-). The additions made by the Assessing Officer (“AO”, for short) in the aforesaid Assessment Order included Rs. 1,26,00,000/- on account of disallowance of enhanced rent paid; and Rs. 65,79,166/- on account of disallowance of Commission paid to Directors.

2. At the time of hearing before us, the Learned Senior Departmental Representative (“Ld. Sr. DR”, for short) for Revenue and the Ld. AR of the assessee were in agreement that both the issues in dispute in the present appeal are squarely covered in favour of the assessee by order of Coordinate Bench of Income Tax Appellate Tribunal (“ITAT”, for short) in assessee’s own case, vide order dated 28.07.2021 in the case of the assessee, for Assessment Year 2013-14, in ITA No.- 2155/Del/2017; wherein in identical facts and circumstances both the issues in dispute were decided in favour of the assessee.

3.We have heard both sides and carefully perused the materials available on records. We find that the Ld. CIT(A) has observed that facts in this year, in respect of both the disputed issues, are identical to facts of Assessment Year 2013-14. Moreover, the Ld. CIT(A) has followed his own order in the case of the same assessee for Assessment Year 2013-14 in which both the issues in dispute were decided in favour of the assessee and the corresponding additions were deleted.

4. Our order was orally pronounced in Open Court on 01-09-2021, after conclusion of the hearing, in the presence of representatives of both parties. Now this order in writing is signed today on 02/09/2021.

Please find attached the enclosed file for the full judgement