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2012 (6) TMI 257 - HC - Income TaxDisallowance of expenses - Assessing Officer was of the opinion that the agreement did not contain any clause as per which the aircraft was to be utilized by the assessee for its guests and premier clients to avail of these facilities. Therefore, there was no commercial expediency in the said agreement. He was also of the opinion that the taxi operator was the subsidiary of the assessee and, therefore, this agreement was merely a device to make payment to the said taxi operator to reduce its tax liability – Held that:- disallowance under section 40A(2) could only be made if the revenue had discharged its burden of proving that the expenditure so incurred was excessive or unreasonable having regard to the fair market value of the goods, services or the facilities for which the payment was made. Officer to show that similar facilities were available to the assessee at a lower price or that the assessee had made excessive payments. Consequently, in the absence of the such findings the Tribunal concluded that the provision of section 40A(2) could not be invoked for disallowing the said expenditure. under the same agreement the payments made earlier have been held to be genuine accepting the genuineness of the agreement and treating the same as incurred in connection of the business. provisions of Section 40A(2)(b) of the Income tax Act are not attracted in the present case. appeal dismissed
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