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2019 (5) TMI 200 - HC - Income TaxAddition u/s 40A(2) - administrative service expenditure from sister concern as per agreement - documentary evidences not provided or given for the expenses claimed - AO disallowed the claim on the ground that there was no specific service which could be attributed to the Assessee and also on the ground of excessive payment in terms of Section 40A(2) - Tribunal was of the opinion that the business expediencies for incurring such expenditure cannot be questioned by the Revenue and in relation to Section 40A(2)(b) and there was no material on record to suggest that such expenditure was excessive or unreasonable having regard to the market value of the services for which the payment was made - HELD THAT:- No error in the view of the Tribunal. As pointed out by the learned Counsel for the Assessee, the Assessee and such other sister concerns would proportionately internally allocate administrative expenditure which allocation would be based on scientific distribution. Instead of different companies incurring such expenditure, the same would be commonly undertaken by one company and different sister concerns would undertake a portion of such expenditure. Apart from the expenditure being motivated by business decision, we do not discern any element of transfer of profit, particularly when it is pointed out that the payee had also paid cash at the tax rate as that of the Assessee. - Decided against revenue.
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