Assessee claimed deduction of guarantee commission paid to directors for personal guaranty for availing loan facility. It was held that, unless it was ascertained from original bank documentations that said bank documents/ agreements contained terms and conditions, as stipulated by RBI in its guidelines, it was not possible to decide whether commission paid by assessee company to its directors in lieu of their personal guarantee was lawful/justified or not. Accordingly, matter was to be remanded back for disposal afresh.(AY. 2008-09)
Eastman Industries Ltd. v. ACIT (2018) 63 ITR 181 (Delhi) (Trib.)
S. 37(1) – Business expenditure –Commission to directors against personal guarantee – Matter remitted to the AO to verify whether as per the bank documentation, director eligible for commission.