Section 40A(2)(a) Disallowance Requires Fair Market Value Assessment: Arbitrary Ad Hoc Disallowances Not Upheld

ACIT Vs Noida Cyber Park Pvt. Ltd. (ITAT Delhi) The Income Tax Appellate Tribunal (ITAT) Delhi’s verdict in the case of ACIT vs Noida Cyber Park Pvt. Ltd. has shed light on the critical aspects of disallowances under Section 40A(2)(a) of the Income Tax Act, 1961. This detailed analysis explores the tribunal’s stance on the requirement for a fair market value assessment in disallowances and its implications. Background of the Case: Noida Cyber Park Pvt. Ltd., engaged in the development of technology parks, faced scrutiny from the Assessing Officer (AO) regarding various financial tr...