Addition u/s 40A(2)(b) - Allegation of excessive and ...

Tax Tribunal Upholds Partner's Relative's Salary as Legitimate, Rejects Allegation of Excessive Payment for Tax Evasion.

March 27, 2024

Case Laws Income Tax AT

Addition u/s 40A(2)(b) - Allegation of excessive and unreasonable salary paid to the relative of partner - The assessing officer questioned the legitimacy of this payment due to the absence of a filed income tax return by the recipient and the perceived collusive nature of the transaction. - sham transaction designed to evade tax. - The Appellate Tribunal found that the salary payment was legitimate and incurred for business purposes. The Tribunal noted that the assessing officer failed to prove that the salary was excessive or unreasonable, a prerequisite for invoking Section 40A. Additionally, the Tribunal accepted the appellant's arguments regarding the separate nature of the salary and loan transactions.

View Source

← Previous Next →

Addition u/s 40A(2)(b) - Allegation of excessive and ...

Tax Tribunal Upholds Partner's Relative's Salary as Legitimate, Rejects Allegation of Excessive Payment for Tax Evasion.

March 27, 2024

Case Laws Income Tax AT

You may also like:

Assessee employed by Indian entity but sent on long-term international assignment to Singapore. Salary received in India for administrative reasons, but employment...

Additions (Benefit) u/s 28(iv) - Expenditure incurred by the HO for salary paid to the expatriate employees for rendering services to PE - The tribunal upheld the...

TDS u/s 192 - commission paid to partner - considering the provisions of Explanation 2 to Section 15 of the Act which includes salary, bonus, commission or remuneration...

Non-resident individual seconded on overseas assignment to UK - Salary received for employment exercised in UK taxable only in UK under Article 15(1) of India-UK DTAA,...

Disallowance of partners’ salary from undisclosed income - deduction allowed - AT

Clause 15 of Income Tax Bill 2025 restructures salary taxation provisions while maintaining core principles of Section 15 of ITA 1961. Key modifications include...

Estimation of income - interest and salary paid to partners - The AO made the assessment by estimating the income of the assessee by rejecting the books of account by...

Taxability of salary income earned by non-residents from Indian companies. In this Judgement, it was determined that under Section 9(1)(ii) of the Income Tax Act, salary...

The assessee, a company engaged in development/construction and sale of flats and plots, had classified its properties into four categories: flats open for sale, let-out...

Disallowance of demurrage charges and reimbursement of salary paid to seconded employees on account of non-deduction of tax at source was dismissed, following coordinate...

CBDT has amended the Income-tax Rules, 1962 through the Income-tax (Seventh Amendment) Rules, 2025, effective upon publication in the Official Gazette. The amendment...

Customs authority rejected transaction value declared by importer and enhanced value based on email evidence and statement of partner admitting negotiated higher price....

Taxability of capital gain arising on sale of shares under the treaty provisions - AO and DRP have rejected assessee’s claim by holding that assessee being a mere paper...

Disallowance of salary paid to relative - excessive and unreasonable expenses - Wife of son of the partner does not fall within the definition of the relative as defined...

The ITAT held that where the assessee entered into a unilateral Advance Pricing Agreement (APA) with the Central Board of Direct Taxes (CBDT) and complied with its...

Quick Updates: