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2012 (10) TMI 525 - AT - Income TaxPayment of rent to group concerns - excessive amount u/s 40A(2) - assessee contended that no two properties can be compared with each other, unless they are identical in respect of the location, the facilities available and the period of tenancy, etc. - held that:- the rent paid by the appellant company in respect of all the five properties were reasonable, thereby warranting no disallowance. Disallowance of interest - interest-free rent deposits – held that:- Once it is established that there was nexus between the expenditure and purpose of business [which need not necessarily be the business of the assessee itself] the revenue cannot justifiably claim to put itself in the armchair of the businessman or in the position of the Board of Directors and assume the role to decide how much is reasonable expenditure having regard to the circumstances of the case. No businessman can be compelled to maximize his profits. - the deposits were made for taking the premises on rent which was necessitated by business expediency and' are based on marked rent. - in favour of the assessee
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