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TMI Blog2018 (5) TMI 1684X X X X Extracts X X X X X X X X Extracts X X X X ..... rd". 3. The issue in appeal lies in a narrow compass of material facts. The assessee before us is a closely held company engaged in running a clinic providing treatment to hemato oncology patients. During the course of scrutiny assessment proceedings, the Assessing Officer noticed that, out of the total professional receipts of Rs. 5,93,44,045/-, the assessee company has paid Rs. 3,50,46,881/- to four doctors - namely Dr. Bhavin Shah, Dr. Chirag Desai, Dr. Sandip Shah and Dr. Shailesh Talati, who are promoter directors of this company, whereas only Rs. 64,09,696/- payments cover the payments to seven other doctors. Even though it was explained to him that these four doctors are highly reputed specialists, the Assessing Officer was of the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the same time, there was also substantial increase of 56% and 64% in the professional fee with regard to the doctors other than directors namely; Dr. Abhishek Kakru and Dr. Deepaben respectively. Even, here the increase of professional fee in the case of doctors other than promoter directors as mentioned above was much higher than the average increase of the professional fees of the promoter directors. So, the comparison of scale as adopted by the AO in respect of doctors is not correct and justified. 3.11. Further, the appellant has given the comparative study of the professional fee sharing from the direct income in the case of appellant which was 55.64%, while in a similar nature of appellant namely; Aastha Oncology Pvt. Ltd., this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .21 times of the professional fee to other doctors, while in A. Y. 2010-11 it was 4.10 times, in A. Y. 2011-12 it was 3.35 times and in the year under consideration if was 5.22 times. Thus, it can be seen that even in A. Y. 2009-10, the ratio of professional fee to promoter directors vis-a-vis the other directors was higher as compared to the year under consideration, even though no adverse view has been taken by the AO in that year. Thus from the above, it is obvious that the professional fees payment to promoter doctors in the year under consideration was almost on similar lines and no excess payments to them were made. 3.14. In view of the aforesaid discussion, the disallowance made by the AO invoking the provisions of section 40A(2)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re being taxed at the same rate, there was no reason for the assessee to show higher rate for purchases made by it from them. * DCIT Vs. Meet Heat Engineers [ITA No. 3654/07 dt. 23/07/2010] * ITO Vs. Cello Paper Co. [ITA No. 1815/AHD/2010 dt.28/12/2012] * Bativala and Karani Vs. ACIT [2 SOT 379 (Mum)] 3.15. The related grounds of appeal are accordingly allowed." 4. Aggrieved by the relief so granted by the CIT(A), the Assessing Officer is in appeal before us. 5. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 6. We have noted that there is no finding by the Assessing Officer about as to what constitutes fair market price o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has observed and held in para 7 as under :- "7. It is plain on principle that, so far as disallowance under Section 40A(2) for payment being excessive or unreasonable can only be made when the payment is made to the "specified persons" under clause 40A(2)(b) and "the Assessing Officer is of the opinion that such expenditure is excessive or unreasonable having regard to the fair market price of the goods, services or facilities for which the payment is made". The opinion of the Assessing Officer for the expenditure being excessive or unreasonable is to be formed vis-a-vis fair market price of such goods services or facilities. It is thus sine qua non for making a disallowance under section 40(A)(2) that the Assessing Officer has to ascert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e onus of explaining such a variation is on the assessee. A tax auditor is an independent professional and any errors in his report cannot be put to assessee's disadvantage. In view of these discussions, as also bearing in mind entirety of the case, we approve the conclusions arrived at by the CIT(A) and decline to interfere in the matter." We are in complete agreement with the view taken by the ITAT and the observations made by the learned ITAT while deleting disallowances made by the AO under section 40A(2) (b) of the Act on motor bus rent. No error has been committed by the learned ITAT which calls for interference of this Court. No question of law much less any substantial question of law arises." 7. The adhoc disallowances under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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