Consultancy Charges paid to Resident Director not ‘Excessive or Unreasonable’: ITAT allows Company’s Deduction Claim

In a recent decision, the ITAT allowed a company's deduction claim for consultancy charges paid to a resident director, ruling them neither excessive nor unreasonable. The case centered on whether the payments were justifiable under Income Tax provisions. The ITAT upheld the company's contention that the charges were for legitimate consultancy services provided by the director, aligning with business needs and benefiting the company's operations. This decision reinforces the importance of substantiating payments to directors with actual services rendered, thereby supporting deduction claims under Income Tax laws.