Bonus or commission meaning u/s 36(1)(ii)

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 September 2011 In the tax audit report,an auditor has to comment on any sum paid to an employee as bonus or commission for services rendered, where such sum was otherwise payable to him as profits or dividend,

please explain, and tell why bonus or commission word has been used and in what context.

VISHRUT

VISHRUT (Expert)
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09 September 2011 In certain companies policies are such design in order to reduce profit or for the purpose of showing lower dividend they charge such expenses to profit & Loss account rather showing as an item of apportion to Profits and reduce their tax liability.

In order to determine correct liability such working is to show and it will be added back to the after tax profit at the time of computation of tax liability of a company.