IT : Where assessee could not give satisfactory reason for increase in conversion charges paid to its sister concern, part of such conversion charges was disallowed under section 40A(2)
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[2015] 54 taxmann.com 411 (Calcutta)
HIGH COURT OF CALCUTTA
Prakash Engineering Works
v.
Commissioner of Income-tax*
SOUMITRA PAL AND DEBANGSU BASAK, JJ.
IT APPEAL NO. 59 OF 2004†
SEPTEMBER 18, 2014
Section 40A(2) of the Income-tax Act, 1961 - Business disallowance - Excessive or unreasonable payments (Conversion charges) - During relevant assessment year assessee paid conversion charges to a company in which it was having substantial interest - Assessing Officer disallowed payments being excessive/unreasonable - Assessee could not explain that conversion charges paid was equal to market price - Whether disallowance of conversion charges was justified - Held, yes [Para 8] [In favour of revenue]
Soumitra Mukherjee, H.B. Dubey, Mukesh Mishra and P. Dudhuria, Advs. for the Appearing Parties.
■■■
[2015] 54 taxmann.com 411 (Calcutta)
HIGH COURT OF CALCUTTA
Prakash Engineering Works
v.
Commissioner of Income-tax*
SOUMITRA PAL AND DEBANGSU BASAK, JJ.
IT APPEAL NO. 59 OF 2004†
SEPTEMBER 18, 2014
Section 40A(2) of the Income-tax Act, 1961 - Business disallowance - Excessive or unreasonable payments (Conversion charges) - During relevant assessment year assessee paid conversion charges to a company in which it was having substantial interest - Assessing Officer disallowed payments being excessive/unreasonable - Assessee could not explain that conversion charges paid was equal to market price - Whether disallowance of conversion charges was justified - Held, yes [Para 8] [In favour of revenue]
Soumitra Mukherjee, H.B. Dubey, Mukesh Mishra and P. Dudhuria, Advs. for the Appearing Parties.
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