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Informative

Onus on AO to Prove unreasonableness in Expenditure when invoking Section 40A(2)(b) of Income Tax Act: ITAT

Update / Judgement Date

20 Oct 2024

Source

Taxscan

Author

Team — WCP Legal Desk

Reading Time

1 min read

Corporate ComplianceIncome Tax

The ITAT ruled that the onus is on the assessing officer (AO) to prove unreasonableness in expenditure when invoking Section 40A(2)(b) of the Income Tax Act. The case involved disallowance of expenses claimed by the assessee, which the AO deemed excessive. The tribunal emphasized that the AO must provide evidence to support the claim of unreasonableness.