https://www.taxtmi.com/caselaws?id=206993 HC dismissed the revenue's appeal, upholding the Tribunal's deletion of the disallowance under s.40A(2). It held that the assessee's subsidiary did not fall within any category of "related persons" under s.40A(2)(b)(ii) or (iv), as a subsidiary is not a "member" of the holding company. Consequently, the provision itself was not attracted. HC further observed that in export business, slightly higher prices in long-term contracts can be commercially justified to ensure consistent quality and supply and to hedge against market volatility. Since both assessee and subsidiary were in the same tax bracket, there was no tax evasion or diversion of profits. en-us Tue, 19 Oct 2010 00:00:00 +0530 Fri, 21 Nov 2025 10:27:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=206993 HC dismissed the revenue's appeal, upholding the Tribunal's deletion of the disallowance under s.40A(2). It held that the assessee's subsidiary did not fall within any category of "related persons" under s.40A(2)(b)(ii) or (iv), as a subsidiary is not a "member" of the holding company. Consequently, the provision itself was not attracted. HC further observed that in export business, slightly higher prices in long-term contracts can be commercially justified to ensure consistent quality and supply and to hedge against market volatility. Since both assessee and subsidiary were in the same tax bracket, there was no tax evasion or diversion of profits. Case-Laws Income Tax Tue, 19 Oct 2010 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=206993