2. The issue raised in grounds no. 1 relates to deletion by the Ld. CIT(A) of
the addition of Rs. 10,85,214/- made by the AO on account of commission
expenses relating to assessment year 2010-11.

ITA No. 2042/Kol/2014

M/s Associated Pigments Ltd. 1

3. The Assessee in the present case is company which is engaged in the
business of manufacturer of lead, lead oxides and allied products & trading
of lead/lead alloy. The return of income for the year under consideration was
filed by it on 26.09.2011 declaring total income of Rs. 14,99,20,648/-. In
the profit and loss account filed along with said return a sum of Rs.
26,61,183/- was debited by the assessee on account of commission and
salary to the Directors. On verification, it was found by the AO during the
course of assessment proceedings, that the said amount was claimed a sum
of Rs. 10,85,214/- paid by the assessee company to its Managing Director
on account of commission for the financial year 2009-10 relevant to
assessment year 2010-11. It was seen that the assessee has followed a
mercantile system of accounting, AO held that the said expenditure
pertaining to earlier year could not be allowed in the year under
consideration. He accordingly disallowed the claim of the assessee on
account of commission to the Directors to the extent of Rs. 10,85,214/-.

Source: IK