https://www.taxtmi.com/caselaws?id=759140 The Karnataka HC reversed the ITAT's decision allowing compensation payment as business expenditure under Section 37(1). The court held that the assessee firm had no ownership, right, title or interest in the properties subject to agreements dated 2.4.2002 and 10.3.2004. The assessee was not a signatory to these agreements and could not demonstrate the properties were part of the firm's stock under Section 14 of the 1932 Act. The court found the transaction to be a sham and rejected the assessee's claim that liability had crystallized during AY 2005-06, noting no factual basis existed. The ITAT's reasoning was deemed erroneous and contrary to law, with the appeal decided against the assessee. en-us Fri, 20 Sep 2024 00:00:00 +0530 Tue, 24 Sep 2024 10:37:19 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=759140 The Karnataka HC reversed the ITAT's decision allowing compensation payment as business expenditure under Section 37(1). The court held that the assessee firm had no ownership, right, title or interest in the properties subject to agreements dated 2.4.2002 and 10.3.2004. The assessee was not a signatory to these agreements and could not demonstrate the properties were part of the firm's stock under Section 14 of the 1932 Act. The court found the transaction to be a sham and rejected the assessee's claim that liability had crystallized during AY 2005-06, noting no factual basis existed. The ITAT's reasoning was deemed erroneous and contrary to law, with the appeal decided against the assessee. Case-Laws Income Tax Fri, 20 Sep 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=759140