Tribunal Overturns Disallowance of Royalty Payment Below Threshold u/s 40A(2)(b) for FY 2005-06.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Disallowance of payments to related party u/s 40A(2)(b) - The ITAT observed that, from the working of corporate service charges for the financial year 2005-06, we find that in the present case, the assessee paid a Royalty of Rs. 84 lakh, which is 0.05% of the turnover of Rs. 1449.40 crore and is even less than 0.3% of the turnover considered reasonable by the AO. - The Tribunal deleted the disallowance of Royalty payment made by the AO.....