Hindalco Industries Ltd. v. Dy. CIT (2024)114 ITR 502 (Mum)(Trib)

S. 40A(2): Expenses or payments not deductible-Excessive or unreasonable-Service charges paid to group company-Common management services-Disallowance is deleted.

Held that BL had not charged any mark-up and was assessed at nil on the principle of mutuality. If the services had been availed of in the relevant assessment year, the charges paid to BL would be allowable. The assessee not only received sundry managerial services from BL but also furnished, by way of additional evidence, sample evidence of receipt of such services. Similar evidence was filed in the earlier assessment year, which was accepted by the first appellate authority, who allowed the deduction. Thus, payment made to BL for rendering service could not be disallowed in terms of section 40A(2). (AY.2003-04)

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