AI Drafter 
TaxTMI 
TaxTMI 
2025 (6) TMI 1713
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....vide order dated 07.02.2024 passed for A.Y. 2009-10. 2. At the outset, we observe that the appeal is time barred by 64 days. The assessee filed an Affidavit dated 06.06.2024 where the assessee submitted that the accountant of the assessee handled all the notices and the order passed by Ld. CIT(A), received on email had mistakenly been overlooked, causing delay of 64 days in filing of the present appeal. The Counsel for the assessee submitted that there was no mala fide intention in the delay in the filing of the present appeal and hence the same may be kindly condoned. Looking into the contents of Affidavit filed by the assessee, the delay is hereby condoned, in the interest of justice. 3. The Assessee has taken the following grounds ....
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....al." 4. The brief facts of the case are that the assessee is an individual and is engaged in the business of building and land development. During the course of assessment proceedings, the Assessing Officer observed that the assessee had paid consultancy charges to M/s. Mangala Properties Pvt. Ltd. (in short "MPPL") amounting to Rs. 1,57,00,000/-. The Assessing Officer observed that M/s. Mangala Properties Pvt. Ltd. (in short "MPPL") was a related party and the Assessing Officer asked the assessee to provide justification alongwith supporting evidences that such payment towards consultancy charges was not excessive. After taking the submission of the assessee on record, the Assessing Officer was of the view that the assessee could not pr....
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....cal explanation for this excessive payment. Accordingly, the Assessing Officer disallowed 20% of the payment made to M/s. Chetan Builders and added a sum of Rs. 5,92,000/- to the total income of the assessee. 5. In appeal, Ld. CIT(A) confirmed the additions made by the Assessing Officer with the following observations: "5.4.3 Thus, the argument of the appellant that the burden of proof is on the assessing officer is contrary to the propositions of law laid down by the decision above. 5.4.4 In light of the above discussion, I find that the appellant has made no attempt to justify the reasonableness of the payments before me and/or any authority at any stage, when deciding the matter on the applicability of section 40(A)(....
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....as made by the assessee to it's related parties. 7. In response, Ld. D.R. placed reliance on the observations made by the Assessing Officer and Ld. CIT(A) in their respective orders. 8. On going through the facts of the case we observe that in the instant case, the Assessing Officer has shifted onus of proving the excessiveness of payments completely on the assessee. Further, on perusal of the order passed by the Assessing Officer, we note that the Assessing Officer has not placed on record any comparable cases to demonstrate as to how the payments made by the assessee to these parties was excessive, keeping in view the fair market value of these services. 9. In the case of Commissioner of Income-tax-III vs. Ashok J. Patel [2014] 4....
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....3-06-2018], the ITAT held that where Assessing Officer made disallowance under section 40A(2)(a) without placing on record any material which could prove that payments made by assessee were excessive or unreasonable, having regard to fair market value of services for which same were made or keeping in view legitimate needs of business of assessee or benefit derived by or accruing to assessee therefrom, said disallowance could not be sustained. 12. In the case of Principal Commissioner of Income-tax vs. Future First Info Services (P.) Ltd. [2022] 145 taxmann.com 35 (Delhi)/[2023] 290 Taxman 490 (Delhi)/[2022] 447 ITR 299 (Delhi)[14-07-2022], the High Court held that where Assessing Officer made additions towards remuneration paid by asses....