No disallowance for payment to related parties without demonstrating that payment made was excessive and unreasonable

Motilal Laxmichand Sanghavi Vs ACIT (ITAT Mumbai)

A reading of the provision of section 40A(2) of the Act as a whole makes it clear that if in the opinion of the Assessing Officer, the expenditure claimed by the assessee in respect of payment made to any related party/associated concern is excessive or unreasonable having regard to the fair market value, disallowance has to be made under the said provision.

Therefore, before making any disallowance under the said provision, two conditions

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