On appeal the Court held that the Assessing Officer is duty-bound to provide an opportunity to the assessee to place on record the requisite evidence to justify its claim. The matter was remanded since AO did not seek the relevant evidence and simply rejected the claim made by the assessee.(AY. 2011-12, 2012-13)
Mehra Jewel Palace (P.) Ltd. v. PCIT (2024) 460 ITR 209/ 296 Taxman 489(Delhi)(HC)
S. 40A (2) : Expenses or payments not deductible—Excessive or unreasonable-Burden of proof on Revenue to show that expenditure was Excessive-The Assessing Officer is duty-bound to provide an opportunity to the assessee to place on record the requisite evidence to justify its claim Matter remanded to the file of the Assessing Officer-Directed to issue fresh notice and decide in accordance with law. [S. 40A(2)(a)), 40A(2)(b), 260A]