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

Tribunal’s observations and decision
• Commission income - No funds required for expansion of its business;
• Net worth would remain the same even if dividend was paid instead of
commission;
• Important criterion is rendering of extra service.
• Adequacy of services or commensurate payment not relevant
• No evidence to substantiate extra services rendered by directors in
addition to services rendered as employee for which salary has been paid;
• Board resolution not an evidence of extra service particularly when Board
constituted by directors to whom payment has been made
• Improvement in performance of assessee was due to improved stock
market conditions and not because of additional efforts by directors
• Commission earning – Income assured whether investor loses or gains
• Good performance in years when there was boom in stock market
August, 2011
CA Sanjeev Lalan, Singrodia Goyal & Co.
Presentation at JB Nagar CPE Study Circle
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