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TMI Blog2015 (8) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... tted by the Tribunal. The Tribunal again fall into error while partly allowing the appeal of the assessee. The Tribunal has also not given any germane reasons why 5% interest is not allowed. Further, it appears from the record that the appellant has produced the evidence before the Tribunal. Therefore, the decisions relied upon by the learned advocate for the appellant would enure for the benefit of the appellant. Taking into consideration the aforesaid facts and circumstances of the case and also the principle laid down by this Court in the case of Ashok J. Patel (2013 (12) TMI 1480 - GUJARAT HIGH COURT) & Sarjan Realities Ltd. (2014 (8) TMI 206 - GUJARAT HIGH COURT), it cannot be said that the Tribunal was right in granting 3% commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y observing that the same was general and vague and not supported by any evidence. 2.1. Against the order of the Assessing Officer, the assessee filed an appeal before the Commissioner of Income Tax. The CIT(A) partly allowed the said appeal. Being aggrieved by the order of the CIT(A), the assessee filed an appeal before the Income Tax Appellate Tribunal. The Tribunal vide order dated 30.05.2005 partly allowed the said appeal. Hence, this appeal is filed at the instance of the assessee. 3. While admitting this appeal on 06.02.2007, the Court had formulated the following substantial question of law: Whether on the facts and in the circumstances of the case, the Tribunal was justified in disallowing under Section 40A(2) 2% out of 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holding that the amendment carried out by Finance Act, 2010 can be held to be retrospective from AY 200506. Now, so far as the disallowance made under section 40A(2)(b) of the Act on the ground of motor bus rent is concerned, it appears that the AO disallowed 5% of the total payments towards motor bus rent by observing that the assessee has failed to reconcile the difference in payments as per tax audit report and as submitted during the assessment proceedings and had also not produced any comparative prices. The learned CIT(A) deleted the said disallowances by observing that the AO has not made out any case for excessive or unreasonable payments to the related purpose towards the motor bus rent. The learned CIT(A) also observed that no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies. It is thus sine qua non for making a disallowance under section 40(A)(2) that the Assessing Officer has to ascertain the fair market price of such goods, services or facilities, and then make a disallowance for the amount which is in excess of fair market value of such goods, services or facilities. Unless there is a categorical finding about the fair market value and the assessee has an opportunity to be heard on Assessing Officers finding about such fair market value, there cannot be an occasion to make a disallowance under section 40A(2). The very scheme of Section 40A(2) does not envisage an adhoc disallowance as has been made in the present case. For this short reason alone, the impugned deletion of disallowance must stand confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch less any substantial question of law arises. 4.2. Learned counsel for the appellant relied upon another decision of this Court in the case of Commissioner of Income TaxIV Vs. Sarjan Realities Ltd. reported in [2014] 50 taxmann.com 52 (Gujarat), more particularly paragraph No.5, which reads as under: 4. Heard Shri Varun Patel, learned advocate for the revenue. Now so far as question no. 2(a) with respect to disallowance of ₹ 1,22,13,280/made by the AO u/s 40A(2)(b) of the Act being excessive interest paid to associates is concerned, it is required to be noted that it is the contention on behalf of the revenue that as such the company paid the interest at different rates from different persons / companies and therefore, the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh paragraph No.3.1 of the Assessing Officer s order, wherein the Assessing Officer held relating to the question framed in this appeal i.e. commission of Govind Glass Industries limited, we see no germane reason in the finding of the Assessing Officer in concluding against the appellant. 7. Further, the CIT(A) while partly allowing the appeal of the assessee has again in paragraph No.8 has held that the commission payment to GGL was justified but the CIT(A) has not given any reason why the total sales of 5% should not be granted. Similar mistake came to be committed by the Tribunal. The Tribunal again fall into error while partly allowing the appeal of the assessee. The Tribunal has also not given any germane reasons why 5% interest is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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