The AO held that the assessee had paid commission expenses in excess of the market rates and disallowed the amount under S. 36(1)(ii).  He considered that an amount as excessive and made addition under the provisions of S. 40A(2)(b).  For the assessment year 2010-11 he held that the assessee had tried to evade dividend distribution tax under S.  115-O by giving commission which was far more excessive.  On appeal the Tribunal held that  the assessee was not bound by section 198 and section 309 of the Companies Act, 1956 as the assessee was neither a public company nor a private company which was the subsidiary of a public company nor received any payment beyond the provisions of sub-section (1)(a) of section 309.  In terms of the Board resolution a maximum commission of 27 per cent.  over the turnover can be paid to the directors whereas the total payments was only 1. 25 per cent.  of the value of the export orders achieved by them.  The AO had not brought anything on record nor gathered any evidence about the contribution of the directors which went contra to the payments they received.  There was no doubt about the qualifications and contribution of the directors for obtaining the orders and increasing the turnover.  The payment of commission had been the practice of the company for the past seven years. The directors who had been receiving commission paid tax at the maximum marginal rate and no revenue leakage could also be found based on the tax payments. Increase in personal expenses and comparing it with the increase in directors remuneration could not be accepted as a methodology to calculate the reasonable remuneration.  The company could determine the rates of salary, remuneration, commission as long as it did not infract any law in force.  Hence the addition made by the AO was deleted.   (AY.  2006-07 2009-10, 2010-11, 2011-12).