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2018 (5) TMI 1580 - AT - Income TaxDisallowances of consultancy charges - disallowance of losses debited in the P&L account, by way of client code modifications - rebate u/s 88E - Held that:- transaction are done through recognised stock exchange - transactions have been carried out through proper banking channels/account payee cheques - all the purchases were done by the concerned stock broker and recorded in the books of account - hence the transactions cannot be treated as bogus - thus addition made by AO needs to be deleted - Decided in favor of assessee. Disallowance on account of salary paid to specified persons u/s 40A(2)(b) - Held that:-the payments have been made by the assessee for commercial expediency and to run the business smoothly, therefore, these expenses are allowed u/s 37(1) of the Act - AO failed to bring any cogent evidence on record to show that salary payments made by the assessee is excessive as compared to the fair market value of services - thus addition needs to be deleted - Decided in favor of assessee. Held that:- consultancy fee is associated with the turnover achieved by the assessee and is genuine expenditure incurred by the assessee for the purpose of business - AO has failed to bring any evidence to establish the fact that the consultancy fee paid by the assessee was not genuine - thus addition needs to be deleted - decided in favor of assessee. Held that:- assessee has submitted that he has filed the STT Certificate before the Assessing Officer in respect of the amount debited in P&L a/c and submitted the Form 10BB - disallowance made by the Assessing Officer u/s 88E of the Act, is not justified and direct the AO to provide the rebate u/s 88E of the Act, to the extent of ₹ 12, 75, 462/-, after due verification and in accordance with law - allowed for statistical purposes.
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