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2014 (1) TMI 760 - HC - Income TaxDisallowance u/s 40A(2)(b) - unreasonable and excessive expenditure - Held that:- The genuineness of the expenditure has not been doubted by the A.O. - The only reason for the impugned addition was that the payments was excessive in nature - No such comparable instance was quoted by the AO to prove that the payment was excessive as compared to market rate - There was no motive to divert the income because the assessee is entitled for the claim of 100% deduction on the income u/s 80IA(4) - The totality of the circumstances demonstrates that there was no justification on the part of the AO to make such an adhoc addition - The Assessing Officer was not justified in adopting disallowance to the extent of 10% payment under Section 40A(2)(b) of the Act solely on the ground that M/s. Pollucon Engineers to whom the payment was made, was run by the wife of the Director of the assessee company - Decided against Revenue.
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