Section 40A(2)(b)

Related Party Transactions – Section 40A(2) of Income Tax Act,1961

Income Tax - Introduction Section 40A(2) of Income Tax Act, 1961 deals with payments to relatives and associated persons. It provides that where the assessee incurs any expenditure in respect of which payment is to be made to a specified person and the Assessing Officer is of the opinion that such expenditure is excessive or unreasonable having regard...

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Section 40A(2)(b) disallowance without proving that payments are over & above market rates are not valid

DCIT Vs M/s Interarch Building Products (P) Ltd. (ITAT Delhi) - DCIT Vs M/s Interarch Building Products (P) Ltd. (ITAT Delhi) The relevant part of the order of the ld. CIT (A) on this issue pertaining to payments made to Mr . Arvind Nanda, with regard to the vehicle purchase, payment made to M/s Intertec on account of job work and the rental payments has been [&...

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No section 40A(2) disallowance for Payment Made to Sister-In-Law

Rajesh Bajaj Vs DCIT (ITAT Allahabad) - Rajesh Bajaj Vs DCIT (ITAT Allahabad) The ld. counsel for the assessee has contended that Alka Bajaj and Preeti Bajaj are sister-in-law of the assessee and therefore do not fall in the definition of relative as provided u/s 2(41). This fact is not disputed by the Revenue and therefore, the payment t...

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Section 40A(2)(b) Addition allowed against Expense only & Not against Income

KEC Delco Dutsan (JV) Vs ITO (ITAT Delhi) - The issue under consideration is whether the addition made u/s 40A(2)(b) in case of estimation of income without doubting expenses incurred by assessee is justified in law?...

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Expense can be disallowed u/s 40A(2)(b) & Not the Receipts

KEC-PLR-KPIPL-JV Vs ITO ( ITAT Delhi) - ITAT states that, in the present case, it is an admitted position that the AO made the addition by invoking the provisions of Section 40A(2)(b) of the Act which are applicable to the expenses considered to be excessive or unreasonable having regard to the fair market value of the goods/services or f...

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Foreign Travel expense of director having nexus with business allowable

Laxmi Ventures (India) Ltd. Vs DCIT (ITAT Mumbai) - Laxmi Ventures (India) Ltd. Vs DCIT (ITAT Mumbai) The issue under consideration is whether disallowance made against the foreign expense incurred for the foreign travelling of the officer is justified in law? ITAT states that, the assessee had debited a sum on account of foreign travelling expenses ...

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CBDT notifies more modes of e-payments; 6DD limit reduced to ₹ 10000

Notification No. 08/2020-Income-Tax [G.S.R. 56(E)] - (29/01/2020) - Notification No. 8/2020-Income-Tax- CBDT has notified Other electronic modes by inserting New Income TAx Rule 6ABBA. It also amended marginal heading of rule 6DD and in rule 6DD for the words ‘account payee bank draft, exceeds twenty thousand rupees’, the words, figures and letters ̵...

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Recent Posts in "Section 40A(2)(b)"

Section 40A(2)(b) disallowance without proving that payments are over & above market rates are not valid

DCIT Vs M/s Interarch Building Products (P) Ltd. (ITAT Delhi)

DCIT Vs M/s Interarch Building Products (P) Ltd. (ITAT Delhi) The relevant part of the order of the ld. CIT (A) on this issue pertaining to payments made to Mr . Arvind Nanda, with regard to the vehicle purchase, payment made to M/s Intertec on account of job work and the rental payments has been […]...

Read More

No section 40A(2) disallowance for Payment Made to Sister-In-Law

Rajesh Bajaj Vs DCIT (ITAT Allahabad)

Rajesh Bajaj Vs DCIT (ITAT Allahabad) The ld. counsel for the assessee has contended that Alka Bajaj and Preeti Bajaj are sister-in-law of the assessee and therefore do not fall in the definition of relative as provided u/s 2(41). This fact is not disputed by the Revenue and therefore, the payment to these two persons […]...

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Related Party Transactions – Section 40A(2) of Income Tax Act,1961

Introduction Section 40A(2) of Income Tax Act, 1961 deals with payments to relatives and associated persons. It provides that where the assessee incurs any expenditure in respect of which payment is to be made to a specified person and the Assessing Officer is of the opinion that such expenditure is excessive or unreasonable having regard...

Read More
Posted Under: Income Tax |

Section 40A(2)(b) Addition allowed against Expense only & Not against Income

KEC Delco Dutsan (JV) Vs ITO (ITAT Delhi)

The issue under consideration is whether the addition made u/s 40A(2)(b) in case of estimation of income without doubting expenses incurred by assessee is justified in law?...

Read More

Expense can be disallowed u/s 40A(2)(b) & Not the Receipts

KEC-PLR-KPIPL-JV Vs ITO ( ITAT Delhi)

ITAT states that, in the present case, it is an admitted position that the AO made the addition by invoking the provisions of Section 40A(2)(b) of the Act which are applicable to the expenses considered to be excessive or unreasonable having regard to the fair market value of the goods/services or facilities for which the payment is made....

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Foreign Travel expense of director having nexus with business allowable

Laxmi Ventures (India) Ltd. Vs DCIT (ITAT Mumbai)

Laxmi Ventures (India) Ltd. Vs DCIT (ITAT Mumbai) The issue under consideration is whether disallowance made against the foreign expense incurred for the foreign travelling of the officer is justified in law? ITAT states that, the assessee had debited a sum on account of foreign travelling expenses for Europe visit and a sum on account [&...

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Commission to Director cannot be disallowed without examining appointment terms

Kirloskar Oil Engines Limited Vs JCIT (ITAT Pune)

Kirloskar Oil Engines Limited Vs JCIT (ITAT Pune) The issue under consideration is whether the disallowance made for commission paid to director u/s. 40A(2) is justified? ITAT states that, the assessee is against disallowance of commission paid to Shri Atul Kirloskar u/s. 40A(2) of the Act. It is an undisputed fact that in earlier assessm...

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No addition for Cash payments in excess of prescribed limit as Assesse given undertaking for not claiming that expenditure

Kalyan Lok Nirman (P) Ltd. Vs DCIT (ITAT Indore)

whether the disallowance u/s 40A(3) of the Act for the alleged payment in cash in excess of the limit prescribed u/s 40A(3) of the Act for making payment for purchase of land is justified in law?...

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Section 40A(2)(b) cannot be invoked merely for Unregistered agreement

DE Diamond Electric India Pvt Limited Vs ACIT (ITAT Delhi)

DE Diamond Electric India Pvt Limited Vs ACIT (ITAT Delhi) One of the ground taken by the AO for invoking section 40A(2)(b) is the agreement between the parties has not been registered. In our opinion, an unregistered agreement cannot be a ground for invoking provisions of section 40A(2)(b) of the Act in absence of requirement […]...

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

Motilal Laxmichand Sanghavi Vs ACIT (ITAT Mumbai)

Even though assessee had made payments to related parties, yet in view of fact that there was no material on record to demonstrate that payment made was excessive and unreasonable having regard to market rate, disallowance made under section 40A(2) by AO was to be deleted....

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