Section 40A(2)(a) applies to payments to directors with substantial interest in company

DCIT Vs Quantum Advisors Pvt. Ltd. (ITAT Mumbai) ITAT Mumbai held that provisions of section 40A(2)(a) of the Income Tax Act are applicable in cases, wherein, the director of subsidiary company, to whom payment has been made, has substantial interest in the assessee. Facts- The assessee company is registered with SEBI as a discretionary portfolio manager. The return of the assessee was selected for scrutiny assessment. In the assessment completed u/s 143(3), AO made disallowance including: (i) disallowance for marketing and distribution fees of Rs.2,46,81,144/- paid to associated company (rela...