Income Tax : Dive into critical tax regulations and provisions, from related party payments to cash disallowance, and learn how they impact you...
Income Tax : Understand nuances of claiming tax deductions on payments to relatives in business. Learn how Section 40A(2) of Income Tax Act, 19...
Income Tax : The issue under consideration in this write up is whether disallowance u/s 40(a)(ia), 40A & 43B of Income Tax Act, 1961 are at...
Income Tax : Introduction Section 40A(2) of Income Tax Act, 1961 deals with payments to relatives and associated persons. It provides that wher...
Income Tax : ITAT Indore held that rate of interest on secured loan from banks cannot be compared with the rate of interest on unsecured loan. ...
Income Tax : Egberts India Pvt Ltd wins against ITO as ITAT Chennai allows deduction of consultancy charges paid to resident director. Full tex...
Income Tax : ITAT Delhi dismisses DCIT's appeal against DLF Urban Pvt. Ltd. TPO failed to apply industry filter for ALP of interest, resulting ...
Income Tax : Explore the intricacies of Section 40A(2)(b) with insights from the M S Hostel Vs DCIT case. Learn why salary disallowance require...
Income Tax : ITAT Mumbai held that compensation received by the assessee in out of court settlement for unilaterally terminating certain obliga...
Income Tax : Notification No. 8/2020-Income-Tax- CBDT has notified Other electronic modes by inserting New Income TAx Rule 6ABBA. It also amend...
It was held that loan taken from the relatives cannot be compared with bank loan because loan from the relatives are without security, while loan from the bank is secured. Tribunal has held in the case of Omkarmal Gaurishanker –Vs- ITO reported in 92 TTJ (Ahd.) 223 that interest paid to relatives @24% is reasonable.
CIT(A) found force in the submission of the assessee that the interest at the rate of 12% was also taken as reasonable in the Income Tax Act under the provisions of section 40A(b)(iv) for the purpose of calculating interest to the partners. The CIT(A) also followed the decision of the Tribunal in the case of ACIT Vs. M/s.Raj Steel Industries and Vipul Y. Mehta Vs. ACIT (supra) where the rate of interest at 18% to 24% was considered to be reasonable.
We have heard both the parties and perused the material placed before us. We find that during the year under consideration, the assessee claimed travelling expenses amounting to Rs.4,29,01 1/-. The AO disallowed 50% of the claim because the expenses included the expenses of assessee’ s wife also.
