Related-party payment rules restrict deductions for excessive payments and disallow non-banked high-value cash payments. The provision permits an assessing officer to disallow as expenditure that portion of payments to specified related persons found to be excessive or unreasonable relative to fair market value, business needs, or benefit derived, with related persons and 'substantial interest' defined by ownership and profit entitlement; it also disallows deductions for payments above a prescribed threshold made otherwise than by crossed bank cheque or crossed bank draft after a notified date, subject to transitional recomputation and prescribed exceptions based on banking facilities and business expediency.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Related-party payment rules restrict deductions for excessive payments and disallow non-banked high-value cash payments.
The provision permits an assessing officer to disallow as expenditure that portion of payments to specified related persons found to be excessive or unreasonable relative to fair market value, business needs, or benefit derived, with related persons and "substantial interest" defined by ownership and profit entitlement; it also disallows deductions for payments above a prescribed threshold made otherwise than by crossed bank cheque or crossed bank draft after a notified date, subject to transitional recomputation and prescribed exceptions based on banking facilities and business expediency.
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