Issues in Corporate Taxation. - jb nagar cpe study circle of wirc of icai

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Arguments Assessee’s arguments Commission paid due to hard work by directors resulting in substantial profit No dispute with respect to rendering of services and reasonableness of payment Department’s arguments No evidence of extra services rendered by directors No such commission to other employees Reasonable of amount not a relevant factor for disallowance under Section 36(1)(ii) Expression “payable” means that shareholder should have right to receive dividend. Payment of dividend is discretionary and not mandatory August, 2011 CA Sanjeev Lalan, Singrodia Goyal & Co. Presentation at JB Nagar CPE Study Circle 20
Tribunal’s observations and decision • Whether Section 36(1)(ii) applies only to non-shareholder employees • “Any sum paid to an employee as bonus or commission for services rendered” – Enabling provision – applies to all employees even if such payment is made out of profit • “If the sum so paid is in lieu of profit or dividend” – Disabling provision – applies only to employee who is shareholder • Payment of commission to • employee (shareholder or not) is covered under Section 36(1)(ii); • Non-employees is covered under Section 37 • Expression ‘payable’ in Section 36(1)(ii) means that dividend would have been declared by the Company considering the profitability and other relevant factors; August, 2011 CA Sanjeev Lalan, Singrodia Goyal & Co. Presentation at JB Nagar CPE Study Circle 21
Page 1 and 2: Issues in Corporate Taxation. Recen
Page 3 and 4: Piercing the Corporate Veil • One
Page 5 and 6: Contents 1. CIT vs Parle Plastics L
Page 7 and 8: Facts & Background • Assessee was
Page 9 and 10: Facts & background in reference to
Page 11 and 12: Timken Co.,In re [2010] 193 Taxman
Page 13 and 14: Arguments Assessee’s arguments Th
Page 15 and 16: AAR ruling (f) (g) As the applicant
Page 17 and 18: Dalal Broacha Stock Broking Private
Page 19: Arguments Assessee’s arguments De
Page 23 and 24: JCIT vs. Patni Computer Systems (P)
Page 25 and 26: CIT (Appeal)’s observations and d
Page 27 and 28: Assessee’s arguments • All the
Page 29 and 30: D B Zwirn Mauritius Trading No. 2 L
Page 31 and 32: Issues before the Tribunal • Whet
Page 33 and 34: Contentions of the assessee • The
Page 35 and 36: Questions ?? August, 2011 CA Sanjee

Issues in Corporate Taxation. - jb nagar cpe study circle of wirc of icai

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