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2008 (11) TMI 236 - RAJASTHAN HIGH COURTPayment of lease rent – group company - excessive and unreasonable payment – fair market value – section 40A(2) – held that - The Assessing Officer observed that two companies were substantially owned by Vijay Mallya, whose United Breweries own the assessee-company. It was also observed by the Assessing Officer, that the lease rent, as paid, gave annual rate of return of 33.6 per cent. Since in his opinion these companies were related to the assessee, hence the provisions of section 40A(2)(a) were applicable It was also considered that the prime lending rates of bank was 15.6 per cent, therefore, he allowed the deduction at 15.6 per cent, and made additions of the remaining amount – held that - learned Commissioner (Appeals) and the learned Tribunal had not ignored the relevant considerations which were required to be taken into account in terms of section 40A(2)(a) of the Act – deduction allowed fully
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