TMI BlogDisallowance u/s. 40(A)(2)(b) - excessive salary payment - payment to close associates / related parties...Disallowance u/s. 40(A)(2)(b) - excessive salary payment - payment to close associates / related parties - AO can disallow only that portion of the total expenditure, which in his opinion, is excessive or unreasonable. The onus is on the AO to form an opinion that the expenditure claimed as excessive/unreasonable having regard to the fair market value for which the payment is made. This opinion of the AO cannot be arbitrary but must be on the basis of determining the fair market value for which payment is made. - AT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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