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2018 (5) TMI 1743 - AT - Income TaxDisallowance of nomination fees - allowable business expenditure - Held that:- When the clients of the assessee have insisted the garment suppliers to purchase the hanger from the assessee, it is quite natural that they would expect some benefit out of the transaction. Further the clients of the assessee are in a position to control certain business policies of the garment suppliers because they buy bulk garments from them. Therefore when they charge a nomination fee from the assessee on turnover basis, it is genuine business expenditure incurred by the assessee and cannot be brushed aside by stating that such expenditure is unnecessary. In the case of the assessee, all the entities are aliens to each other but for their business connections. Further it is not for the Ld.Revenue Authorities to decide as to what expenditure is to be incurred by the assessee and what not. In these situations, we fully agree with the submission of the Ld.AR that the decision rendered by the Hon’ble Supreme Court in the case of SA Builders supra is relevant to the case of the assessee. For the above stated reasons we are of the view that the disallowance made by the Ld.AO towards nomination fee which was further confirmed by the Ld.CIT(A) is not justifiable - Decided in favour of assessee.
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