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2009 (6) TMI 50 - MADRAS HIGH COURTDisallowance u/s 40A(2) - Assessing Officer found that the payment made as per the agreement was excessive in nature and by applying Section 40A(2)(a) of the Income Tax Act, disallowed those payments made to the company for the assessment year 1987-88 to the tune of Rs.9,92,496/-. Similar disallowance of Rs.10,50,000/-, Rs.1161,844/-, Rs.6,54,484/- and Rs.2,89,460/- were made for the assessment years 1988-89, 1990-91, 1991-92 and 1992-93 respectively – CIT(A) disallowed the deduction for the AY 1997-88 and 1988-89 – Successor CIT(A) allowed the deduction for the AY 1990-91, 1991-92 and 1992-93 – Therefore two contradictory sets of orders - ITAT held that the disallowance made under Section 40A(2) in respect of services charges could not be disallowed u/s 40A(2) of the Income Tax Act for the assessment years 1987-88, 1988-89, 1990-91, 1991-92 and 1992-93 – Held that the issue is in respect of finding of fact the finding is reasonable one – ITAT order maintained.
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