Dinesh Kumar Sharma JUDGMENT
Dinesh Kumar Sharma, J.
1. The SRC Aviation Private Limited has filed these two appeals i.e. ITA 492/2019 & ITA 41/2020 under Section 260A of the Income Tax Act (hereinafter referred to as 'the Act') assailing the Income Tax Appellate Tribunal's (ITAT) order in ITA Nos. 492/2019 & ITA 41/2020 pertaining to assessment year 2011-2012 and 2014-2015 respectively.
2. The facts in brief are that the appellant is a private limited company. Sh. Arvind Chadha and Sh. Anoop Chadha are two share-holders and directors holding 50% equity shares each since inception of the company. In the Assessment year 2011-2012, the company has paid bonus of Rs. 1 crore each to both the directors namely Sh. Arvind Chadha and Sh. Anoop Chadha. Similarly in the assessment year 2014-2015 the company has paid bonus of Rs. 1.5 crore each to both the Directors. Assessing Officer disallowed the same relying upon Section 36(1)(ii) of the Act. The Assessing Officer was inter alia of the view that bonus was paid to avoid payment of dividend distribution tax.
3. The Commissioner of Income Tax (appeal) in the appeal filed by the Assessee vide orders dated 24.03.2014 and 29.11.2016 confirmed the disallowance and took a view that had the impugned bonus not been paid to these two directors, the amount would have been paid to them as dividend.
4. The order of the CIT (A) was challenged before the ITAT. The Tribunal also agreed with the Assessing Officer and CIT (A) and upheld the order of assessing officer and CIT(A). Aggrieved by the order of the ITAT, the appellants have challenged the order before this Court.
5. The notice was issued and Mr. Sanjay Kumar, Senior Standing counsel accepted the notice on behalf of the Department.
6. Mr. Rakesh Gupta, learned counsel for the appellant submitted that the appellant company had been paying bonus to the above working directors apart from the directors' remuneration and the same was being allowed as deductible business expenditure and no disallowance was ever made in the previous assessment years. The remuneration including bonus was paid on the basis of Board resolution for the services rendered by the aforesaid two directors.
7. Learned counsel submitted that both the abovesaid directors declared the bonus as part of the 'salary' under Section 15 of the Act in their returns of income and the same were accepted and assessed as such in their assessments. The directors paid the taxes on their respective income at the highest tax rate. Learned counsel submitted that the assessing officer, CIT (A) and ITAT have committed a grave error by disallowing and wrongly relied upon Section 36 (1) (ii) of the Act. It was submitted that there has to be consistency in the view taken by the revenue authority and since the payment of bonus has all along been accepted by the department, there was no reason to reject the same for these two years.
8. Learned counsel relied upon CIT v. Career Launcher India Ltd., MANU/DE/2380/2012 : (2013) 358 ITR 0179 (Delhi) and AMD Metplast Pvt. Ltd. v. DCIT