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2009 (8) TMI 60 - DELHI HIGH COURTExcessive amount paid to sister concern – applicability of provisions of section 40A(2)(b) – AO allowed the trade discount at the rate of 3% only – CIT(A) increased it to 8% - ITAT reduced it to 5% - Assessee claimed 11% - Held that - ITAT has clearly erred and its findings cannot be said to be those of a reasonable person. The conclusions are clearly perverse and are liable to be set aside - it is quite clear that a trade discount of 11% was allowed in the AY 03-04 and that too when the sales to the sister concern was ₹ 2.09 crores as compared to ₹ 8.30 crores made to others. In the present AY the sale to the sister concern was 11.11 crores and to others it was ₹ 2.09 crores, - trade discount at 11% justified - Further there is no rationale or basis or any logic of the authorities below in unilaterally deciding a disallowance by reducing the entitlement – On the issue of application of section 40A(2)(b) - held that - trade discount is a trade discount, and not an expenditure, therefore there does not arise the question of applicability of Section 40-A(2)(b).
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