TaxTMI 
TaxTMI 
TaxTMI 
2015 (8) TMI 260
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....profit and loss account a sum of Rs. 4,51,160/as commission paid to its associated concern, Govind Glass Industries Ltd.(GGL). The assessee had paid this commission to Govind Glass Industries Ltd. in respect of sale made to three parties introduced to assessee by Govind Glass Industries Ltd. The three parties were introduced for the first time by Govind Glass Industries Ltd. in the year under consideration. The commission was paid at the rate of 5% of the sale. The Assessing Officer was of the view that Govind Glass Industries Ltd. is an associated company of the assessee and closely related to it. Therefore, there are heavy loss in the above said company whereas the assessee company is the only company of the group which is making profit. ....
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....on of this Court in the case of Commissioner of Income Tax III Vs. Ashok J. Patel, reported in [2014] 43 Taxmann.com 227(Gujarat), more particularly paragraph Nos. 8, which reads as under : " 8. That the assessee who is in the business of transportation claimed disallowance with respect to motor bus rent paid to various persons for transportation contracts. The AO was of the view that the assessee has failed to produce any comparative market price and that the nature of work carried out by the aforesaid persons is general in nature. The AO disallowed Rs. 15,49,163/for AY 200506 and Rs. 14,97,668/for AY 200607 out of the total payment of bus rent under section 40A(2)(b). With respect to AY 200607 AO also made disallowance of Rs. 93,25,426 m....
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....n for the AO to make disallowance under section 40A(2)(b) of the Act. While deleting disallowance made by the AO under section 40A(2)(b) of the Act, the learned ITAT has observed and held in para 7 as under : 7. It is plain on principle that, so far as disallowance under Section 40A(2) for payment being excessive or unreasonable can only be made when the payment is made to the specified persons under clause 40A(2)(b) and the Assessing Officer is of the opinion that such expenditure is excessive or unreasonable having regard to the fair market price of the goods, services or facilities for which the payment is made. The opinion of the Assessing Officer for the expenditure being excessive or unreasonable is to be formed visavis fair market ....
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....dit report and the assessee, neither such a situation can be a reason enough to make a disallowance under section 40A(2) nor the onus of explaining such a variation is on the assessee. A tax auditor is an independent professional and any errors in his report cannot be put to assessees disadvantage. In view of these discussions, as also bearing in mind entirety of the case, we approve the conclusions arrived at by the CIT(A) and decline to interfere in the matter. We are in complete agreement with the view taken by the ITAT and the observations made by the learned ITAT while deleting disallowances made by the AO under section 40A(2)(b) of the Act on motor bus rent. No error has been committed by the learned ITAT which calls for interferenc....
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....arged from other party was excessive and/ or unreasonable. Under the circumstances, both the learned CIT(A) as well as learned ITAT have rightly deleted the disallowance of Rs. Rs. 1,22,13,280/made by the AO u/s 40A(2)(b) of the Act. We are in complete agreement with the view taken by the learned Tribunal. Under the circumstances, question no. 2(a) is answered against the revenue. 5. As against this, Mr. Patel, learned advocate for the respondent has strongly urged that all the three authorities have concurrently held against the appellant. Therefore, he urged that the order of the Tribunal is just and proper and does not warrant any interference by this Court. 6. We have heard learned advocate for the parties and perused the material on ....