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2017 (1) TMI 262 - AT - Income TaxAddition u/s 40(A)(2)(a) - related person - disallowing administrative services charges paid by the assessee to TACO - excessive and unreasonable expenditure - Held that:- As decided Tata Johnson Controls Automotive Limited Versus The Dy. Commissioner of Income Tax [2016 (4) TMI 963 - ITAT PUNE ] in on similar issue there is no basis for measuring such services and in the absence of any evidence brought on record to establish that the expenditure incurred by the assessee was excessive i.e. more than market value of the said services, we find no merit in the orders of authorities below in invoking provisions of section 40A(2)(a) of the Act. Accordingly, we direct the Assessing Officer to allow the expenditure in totality in the hands of the assessee as the said expenditure has been laid down in terms of the agreement agreed upon between the parties and is for carrying on of the business of the assessee more efficiently and is allowable as business expenditure. - Decided in favour of assessee Disallowance of transportation and staff welfare expenses - Held that:- The Assessing Officer shall re-examine the documents furnished by the assessee and shall make disallowance only to the extent of vouchers not produced by the assessee in respect of expenditure claimed. If the assessee is able to produce the relevant documentary evidence, no disallowance is to be made under this head. Accordingly, ground Nos. 3 and 4 raised in the appeal for assessment year 2007-08 is allowed for statistical purpose.
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