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2016 (5) TMI 1080 - AT - Income TaxDeduction u/s 10A - interest receipts from FDRs - Held that:- There was no business exigency or condition to make short Term FDRs therefore, the investment in FDRs cannot be regarded as inextricably connected with business of the assessee. Accordingly, the interest receipts from such FDRs constitute income from other sources and are not eligible for deduction u/s 10A of Income Tax Act, 1961. Addition of excess payment u/s 40A(2)(b) r.w.s 92CA - Held that:- If the payment to Mr. Popp is unreasonably high then in the same proportion income earned is also high as the same is cost plus mark up. Therefore any disallowance will require corresponding correction in receipt also. Therefore, AO was directed to drop the proposed disallowance by the DRP. This finding of the DRP is proper as there is no correlation established by the Assessing Officer to the corresponding income as to the payment to Mr. Popp in the Assessment Order. Therefore, the ground of the Revenue that the addition of ₹ 1,90,00,000/- excess payment u/s 40A(2)(b) r.w.s 92CA of the Act should have been sustain by the DRP does not survive.
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