Blocked input tax credit for resort construction remains unavailable; interest follows actual utilisation, while delayed payment attracts statutory pe...
Duplicate PAN allocation requires record verification and deactivation reasons before assessment-related transactions can be attributed to an assessee...
Faceless assessment safeguards require requested personal hearings and adequate final show-cause response time, failing which reassessment is required...
Consultancy charges paid to a director were disallowed u/s 40A(2). The assessee justified the payment, citing the director's expertise, experience, and reasonableness compared to the business size. The ITAT held that the AO cannot judge the expenditure's reasonableness unless proven excessive compared to market rates. The Madras High Court ruled that expenditure reasonableness must be judged from a businessman's viewpoint, not Revenue's, unless excessive payment is proven. The assessee's project started generating revenue, justifying the increased payment. The payment complied with the Companies Act, TDS was deducted, and the director offered it for tax. The AO failed to demonstrate the payment's excessiveness or unreasonableness. Merely disallowing the differential without establishing unreasonableness was incorrect. The disallowance was deleted in favor of the assessee.
Consultancy charges paid to a director were disallowed u/s 40A(2). The assessee justified the payment, citing the director's expertise, experience, and reasonableness compared to the business size. The ITAT held that the AO cannot judge the expenditure's reasonableness unless proven excessive compared to market rates. The Madras High Court ruled that expenditure reasonableness must be judged from a businessman's viewpoint, not Revenue's, unless excessive payment is proven. The assessee's project started generating revenue, justifying the increased payment. The payment complied with the Companies Act, TDS was deducted, and the director offered it for tax. The AO failed to demonstrate the payment's excessiveness or unreasonableness. Merely disallowing the differential without establishing unreasonableness was incorrect. The disallowance was deleted in favor of the assessee.
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