TaxTMI 
TaxTMI 
2025 (8) TMI 1275
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....eferred to as the Addl. CIT(A) erred in upholding the action of the Income-tax Officer - 29(2)(5), Mumbai (hereinafter referred to as the Assessing Officer) in making a disallowance of Rs. 22,91,477/- being aggregate of payments made to various related parties, covered by section 40(A)(2)(b) on the ground that the appellants failed to discharge primary onus as they could not furnish all the necessary documents to support the payment. The appellants contended that on the facts and in the circumstances of the case and in law, the Addl. CIT(A) ought not to have upheld the action of the Assessing Officer in making the impugned disallowance inasmuch as he has not correctly appreciated the facts of the case in its entirety and hence, the....
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....ted. The assessee disclosed all the payments made to related parties in the annexure to the audit report. The assessee made TDS on payment made to such related parties. Copies of return of income of such related parties were also furnished. The assessee also furnished the details of payment and the services rendered in a tabulated form. Such detail is scanned on page no. 7 of order of ld. CIT(A). The ld. CIT(A) on considering the submission of assessee held that the assessee furnished copy of ITR of these parties but no documents were filed to justify the payments made to such parties. The assessee failed to justify that payment is not excessive as per market rate. Copy of accounts of related parties to whom interest paid is not furnished. ....
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....40A(2)(b). To support his submission, the ld. AR of the assessee relied upon the Circular of Central Board of Direct Tax (CBDT) No. 6 dated 06.07.1968. At the time of submission, the ld. AR of the assessee furnished the fair typed copy of details of all payments along with nature of payment, amount, relation and remark about the nature of payment (which was filed before ld CIT(A). The ld. AR submits that he has explained the details which is scanned by ld. CIT(A) in his order. The ld. AR while explaining all the payments would submit that majority of payments is made on account of interest or on purchases and some of the amounts were allowed in subsequent years. The ld. AR also relied upon the decision of: * UCO Bank 237 ITR 889 (S....
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.... to Suresh Mehta, the ld. CIT(A) held that services rendered by him is not explained. I find that ld. CIT(A) also scanned relevant part of ITR of assessee in para 4.2.1of his order, wherein relevant details is not furnished. However, I find that before ld CIT(A), the ld. AR of the assessee after explaining the nature of various payments and relation with the partners of assessee explained that payments were made either on account of interest or labour charges or purchases. On perusal of such details, I find that during the relevant financial year, the assessee has paid interest to Bhavana K Dhami, Chetan Vejani, Paresh Vejani, Shraddha Enterprises (Shantaben Ramniklal Mehta) & Shailesh Doshi. Interest has been paid @ 15% per annum. Similar ....