Disallowances Under Section 40A(2)(b) Unjustified as AO Failed to Prove Excessive Payments to Related Parties

Virbala Kiritkumar Patel Vs DCIT (ITAT Ahmedabad) Brief facts: In this case, the assessee, an individual engaged in the business of building and land development, had made significant payments to two related parties. Firstly, a sum of ₹1,57,00,000/- was paid to M/s. Mangala Properties Pvt. Ltd. (MPPL) for consultancy services in relation to the sale of two parcels of land. The consultancy agreement covered services such as land measurement, appointment of architects and structural engineers, layout and plan preparation, and similar developmental inputs. The Assessing Officer (AO), however, ...