AO cannot make adhoc disallowance under Section 40A(2)

Manipal Hospitals (Dwarka) Pvt Ltd Vs ACIT (ITAT Bangalore) The case of Manipal Hospitals (Dwarka) Pvt Ltd vs. ACIT revolves around the disallowance of charges amounting to Rs.17,05,381 under Section 40A(2) of the Income Tax Act, 1961. Despite the Assessing Officer (AO) making an adhoc disallowance, the Income Tax Appellate Tribunal (ITAT) Bangalore overturned the decision, stressing the necessity to demonstrate the excessiveness of charges. The crux of the dispute lies in the AO’s decision to disallow 50% of the total back office charges paid to group consultant MEMGIIPL, amounting to R...