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2016 (2) TMI 383 - AT - Income TaxDisallowance of sub-brokerage - CIT(A) restricted the allowance to 50% as excessive and unreasonable within the meaning of Sec. 40A(2)(b) of the Act - AO disallowed the claim as assessee has not deducted TDS u/s. 194J - Held that:- Observation of the Ld. CIT(A) that “it is for the appellant to prove beyond all doubt that the payment made constituted the fair market value of the services received” is not justified since assessee has given instances where the sub-brokerage was paid at 70% of the commission received. Further a list of parties were submitted to show that the sub-brokerage paid was in the ratio of 60:40 and 80:20 depending on the market conditions. The lower authorities have not made any enquiries to disprove the submissions of the assessee. We are not in agreement with the Ld. CIT(A) in holding that the brokerage paid should be restricted by invoking the provisions of Section 40A(2) of the Act. Thus we set aside the order of the Ld. CIT(A) on this issue. As we have upheld the order of the Ld. CIT(A) in holding that the sub-brokerage paid would fall under the provisions of Sec. 194H and not under the provisions of Section 194J, the provisions of Sec. 40A(2) have no application in the facts and circumstances of the case, we dismiss the Revenue’s appeal.
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