Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: list of goods taxed at 4% :: articles on VAT and GST in India :: TDS :: ACCOUNTING STANDARDS :: Central Excise rule to resale the machines to a new company :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: due date for vat payment :: VAT Audit :: VAT RATES :: empanelment :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARD :: cpt :: ARTICLES ON INPUT TAX CREDIT IN VAT
 
 
« From the Courts »
  Nishant Construction Pvt. Ltd vs. ACIT (ITAT Ahmedabad)
 Samson Maritime Ltd vs. CIT (Bombay High Court)
 Mother Hospital Pvt. Ltd vs. CIT (Supreme Court)
 Larsen & Toubro Ltd vs. State of Jharkhand (Supreme Court)
 Nishant Construction Pvt. Ltd vs. ACIT (ITAT Ahmedabad)
 Flipkart India Private Limited vs. ACIT (Karnataka High Court)
 JSW Steel Ltd vs. ACIT (ITAT Mumbai)
  CIT vs. Uday M. Ghare (Bombay High Court)
 Ajay Enterprises Pvt. Ltd. Vs. Assistant Commissioner Of Income Tax (Tds) And Ors.
 Rakesh Raj And Associates Vs. Commissioner Of Income Tax, Central-Ii & Anr.
 Venu Charitable Society And Anr. Vs. Director General Of Income Tax

CIT vs. United Breweries Ltd (Karnataka High Court)
April, 12th 2012

Commission to CMD for personal guarantee may be treated as ploy to divert funds
 
The assessee claimed a deduction for the guarantee commission of Rs. 1.15 crores that it paid to its Chairman Shri. Vijay Mallya. The AO & CIT (A) disallowed the claim on the ground that the so-called guarantee was a mere signature on a document, not backed by specific assets and that as the commission payment exceeded Mr. Mallyas net wealth of Rs. 70 lakhs, it was an innovative method of diverting income from the company and an unwarranted benefit to Vijay Mallya. However, the Tribunal allowed the claim. On appeal by the department, HELD reversing the Tribunal:
 
None of the bankers had obtained details of the assets & liabilities of Vijay Mallya in India or abroad. He stood guarantor in respect of total borrowings of Rs. 115 crores and received commission of Rs. 1.15 crores even though his net worth was hardly Rs. 70.47 lakhs. Also, as he was a NRI, the permission of the RBI ought to have been taken which was not done. The assessee paid the MD commission on the pretext of paying guarantee commission and it is a clear case of a ploy to divert the income of the companies under his management. The payment was characterized as commission to overcome the RBIs directions, the provisions of s. 309 of the Companies Act and was not a lawful payment and could not be allowed as a deduction u/s 37(1).

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Custom Software Development Outsourcing Custom Software Development Offshore Cus

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions