https://www.taxtmi.com/caselaws?id=787218 Section 40A(2) requires a recorded finding that an expenditure is excessive or unreasonable relative to fair market value or business need before disallowance; absent such a finding, disallowance cannot be sustained. The assessee bears the onus under section 37(1) to prove expenditures were wholly and exclusively for business, and cost sharing agreements, accounting entries for reimbursements, and use of domestic payees taxed at the same rate supported the claim. Because no excessiveness or tax arbitrage finding was recorded and the sharing arrangement was not disputed, the Rs. 62,50,720 disallowance was deleted. en-us Fri, 20 Feb 2026 00:00:00 +0530 Sat, 28 Feb 2026 08:41:52 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=787218 Section 40A(2) requires a recorded finding that an expenditure is excessive or unreasonable relative to fair market value or business need before disallowance; absent such a finding, disallowance cannot be sustained. The assessee bears the onus under section 37(1) to prove expenditures were wholly and exclusively for business, and cost sharing agreements, accounting entries for reimbursements, and use of domestic payees taxed at the same rate supported the claim. Because no excessiveness or tax arbitrage finding was recorded and the sharing arrangement was not disputed, the Rs. 62,50,720 disallowance was deleted. Case-Laws Income Tax Fri, 20 Feb 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=787218