Related-party commission disallowance requires comparable evidence of excessiveness, not merely a payment relationship or cross-industry benchmark.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Related-party commission expenditure under section 40A(2)(b) is not disallowable solely because payment is made to a related person. Excessiveness or unreasonableness must be assessed against the fair market value of services, legitimate business needs, and benefit derived. A benchmark from an unrelated line of business, unsupported by comparable material, cannot establish that commission is excessive. Verification remains necessary to confirm services rendered and their commercial justification. Applying these principles, the related-party commission disallowance was deleted.....