https://www.taxtmi.com/caselaws?id=462847 ITAT Hyderabad remanded the case to AO for fresh verification regarding applicability of section 40(a)(iib) provisions. The assessee, a wholesale distributor of alcoholic products in Andhra Pradesh, claimed deduction of privilege fees and special privilege fees. Revenue contended these payments were not allowable under section 40(a)(iib). From AY 2003-04, the assessee's business nature changed when the State Government took over operations, with the assessee merely acting as liaison between Government and retailers. Retailers began paying privilege fees directly to the Government. The assessee filed evidence including letters from Senior Government Officers before CIT(A), who refused to consider them. ITAT held that evidence from Government representatives cannot be disregarded and directed AO to verify the documents. If verified that the Government is carrying on the liquor business, the assessee cannot be considered to have earned income from liquor sales. en-us Tue, 29 Jan 2019 00:00:00 +0530 Sun, 20 Jul 2025 23:10:59 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=462847 ITAT Hyderabad remanded the case to AO for fresh verification regarding applicability of section 40(a)(iib) provisions. The assessee, a wholesale distributor of alcoholic products in Andhra Pradesh, claimed deduction of privilege fees and special privilege fees. Revenue contended these payments were not allowable under section 40(a)(iib). From AY 2003-04, the assessee's business nature changed when the State Government took over operations, with the assessee merely acting as liaison between Government and retailers. Retailers began paying privilege fees directly to the Government. The assessee filed evidence including letters from Senior Government Officers before CIT(A), who refused to consider them. ITAT held that evidence from Government representatives cannot be disregarded and directed AO to verify the documents. If verified that the Government is carrying on the liquor business, the assessee cannot be considered to have earned income from liquor sales. Case-Laws Income Tax Tue, 29 Jan 2019 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=462847