https://www.taxtmi.com/caselaws?id=446410 The ITAT Mumbai held that compensation paid by the assessee for closure of an agreement constituted allowable business expenditure. The AO disallowed the claim alleging the agreement was an afterthought and sham transaction between related parties. The tribunal found the payment was connected to the assessee's business, properly documented through annual accounts, agreements, payment certificates, and disclosed in recipient company's accounts. Since the land for which compensation was paid generated taxable business income, and payment was proven genuine, the deduction was allowed. The AO's appeal was dismissed. en-us Fri, 27 Oct 2023 00:00:00 +0530 Mon, 04 Dec 2023 08:43:59 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=446410 The ITAT Mumbai held that compensation paid by the assessee for closure of an agreement constituted allowable business expenditure. The AO disallowed the claim alleging the agreement was an afterthought and sham transaction between related parties. The tribunal found the payment was connected to the assessee's business, properly documented through annual accounts, agreements, payment certificates, and disclosed in recipient company's accounts. Since the land for which compensation was paid generated taxable business income, and payment was proven genuine, the deduction was allowed. The AO's appeal was dismissed. Case-Laws Income Tax Fri, 27 Oct 2023 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=446410