Assessee made payments to Bank and rental payments made to Customer Assets India P Ltd. AO\u00a0 held that\u00a0 these two entities did not have any written agreement for sharing of facilities and since Bank was related to assessee, AO disallowed 50% of said expenses by invoking provisions 40A(2)(a) of the Act which\u00a0 was\u00a0 confirmed\u00a0 by CIT (A). Tribunal held that\u00a0 both are\u00a0 paying same rate of taxes hence no disallowances can be made.\u00a0 Referred\u00a0 Indo Saudi Services (Travel) P Ltd.\u00a0 AO should also consider claim of assessee that amount disallowed would be eligible for deduction u\/s. 10A, if he was not satisfied with original claim.\u00a0 AO also disallowed 20% of rent paid to sister concern which was confirmed by CIT(A). Tribunal held that, If AO was satisfied that there was no excess payment, then no disallowance out of rental expenditure was called for. Matter remanded. Followed CIT v. Indo Saudi Services (Travel) P. Ltd. (2009) 310 ITR 306 (Bom.)(HC) \u00a0(AY. 2004-05, 2005 -06)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 40A(2) : Expenses or payments not deductible\u2013Excessive or unreasonable\u2013Rent-No written agreement-Both are paying same rate of taxes-Revenue neutral- No disallowance can be made\u2013 Rent paid to sister concern\u2013Matter remanded for verification.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-5110","post","type-post","status-publish","format-standard","hentry","category-digest"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-1kq","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/5110","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=5110"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/5110\/revisions"}],"predecessor-version":[{"id":6207,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/5110\/revisions\/6207"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=5110"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=5110"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=5110"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}