Section 40A(2) disallowances on mere conjectures & surmises not sustainable

Sh. Chander Mohan Lall Vs ACIT (ITAT Delhi)

A plain reading of section 40A(2) of the Act would make it clear that where the payment made to a related party, in the opinion of the Assessing Officer, is excessive or unreasonable having regard to the fair market value of the goods, services or facilities for which the payment is made, it has to be disallowed. However, the expression “the Assessing Officer is of the opinion that such expenditure is excessive or unreasonable having regard to the fair market value of the goods,

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