Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (3) TMI 1379 - ITAT MUMBAIDisallowance of expenses claimed as professional fees - application of provisions of sec. 40A(2)(a) - HELD THAT:- In the instant case the submission of the assessee that Shri Adiya Mitra Anand is not a person specified in sec. 40A(2)(b) has not been controverted. Hence the question of application of provisions of sec. 40A(2)(a) does not arise. As pertinent to note that the agreement is between the assessee and Shri Aditya Mitra Anand and the assessee shall normally expect the quality professional services from him, i.e., any businessmen shall not be bothered as to how the professional assignment is executed so long as they were satisfied with the quality of service. AO has not doubted about the genuineness of the expenditure, but was suspicious about the reasonableness of the expenditure. However, since the expenditure has been incurred by the assessee out of commercial expediency and since the payments have been made by the assessee in accordance with the agreed terms, it is not correct on the part of the AO to question the correctness of the decision taken by the assessee out of commercial expediency. Accordingly, we are of the view that the Ld CIT(A) was justified in deleting the impugned disallowance. - Appeal filed by the revenue is dismissed.
|