9911796707
TMI Blog2021 (1) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) of the Income Tax Act, 1961 ('Act'). As far as this issue is concerned, the facts are that the assessee is a wholesale dealer in mobile phones. In the course of assessment proceedings, the AO noticed that the assessee had paid rent of Rs. 77,41,600/- to Ms. Esha Hasija who happens to be the daughter of the Managing Director of the assessee company. Under the provisions of section 40A(2)(b) of the Act, if the assessee incurs any expenditure in respect of which payment is made to a related person referred to in section 40A(2)(b) of the Act and if the AO is of the opinion that such expenditure is excessive or unreasonable having regard to the fair market value of the goods/services or facilities for which the payment is made, then the expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence can be filed only if the conditions laid down in Rule 46A of the Income Tax Rules, 1961 are satisfied. Since the assessee did not adduce any sufficient cause for not filing this evidence before the AO, the CIT(A) refused to admit the additional evidence. CIT(A) accordingly confirmed the action of the AO. 4. Before the Tribunal, the first submission of the learned Counsel of the assessee was that the annual rental value determined by the BBMP cannot be the basis to arrive at the fair market value of the rent for the building in question. In this regard, the learned Counsel filed before us a copy of the circular and method of assessment by BBMP. A copy of which is placed at pages 70 and 86 of the assessee's Paper Book. It was submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) has examined the fair market value of rent of the building in question, we are of the view that the issue needs to be remanded to the AO for consideration afresh. The assessee will furnish evidence to establish the fair market value of the rent for the building in question and the AO will examine the claim in accordance with law, after affording assessee opportunity of being heard. This issue is accordingly set aside to the AO for fresh consideration. 6. The next issue that arises for consideration is the disallowance of expenses under section 14A of the Act. As far as this issue is concerned, the factual details are that the exempt income earned by the assessee is only Rs. 2,10,898/-. The assessee on his own has made the disallowance of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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