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2011 (5) TMI 408 - AT - Income TaxDisallowance 40A(2)(b) - Excessive or unreasonable expenditure - It is also noticed that the ld. CIT(Appeals) has taken into consideration the fact that the A.O. has not doubted the fees paid to third parties for providing identical range of services especially when such fee was between 0.5% to 1% - Held that: 0.5% of guarantee fee paid to M/s Weizmann Ltd. by the assessee is not excessive or unreasonable but is well within the range as paid by the assessee to third parties and much lower than the percentage fixed by National Housing Board, which itself is an undertaking promoted by Reserve Bank of India Regarding brokerage expense - The fact that the National Housing Board has permitted 2% brokerage on the deposit mobilisation clearly shows that paying brokerage on the mobilisation of public deposits by a banking company is an accepted norm - Once the payment has been accepted as brokerage for mobilisation of deposits, the same cannot be disallowed in part Regarding deduction under Section 36(1)(viii) - In the process of securitization, the future receivables for a period of ten years are discounted with banks and the banks pay the Net Present Value of future receivables to the assessee as part of securitization arrangement - This amount would obviously be the income of the assessee from the long term housing loan disbursed by the assessee. In the circumstances, we are of the view that the securitization income is an income from business of long term housing finance - Appeal is dismissed
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