Shri. Kesarimal Nandlal Runwal (HUF), Vijayapura V. Income Tax Officer, Ward - 1, Vijayapura

ITA 1505/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7170 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 29-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PALANI KUMAR
• Assessee Lawyers: NIMESH RUNWAL
• Keywords: Principle of natural justice; Fair market value

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - C BENCH : BANGALORE BEFORESHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 1504 /BANG/2017 ASSESSMENT YEAR : 20 08 - 09 SHRI NANDLAL JEETMAL RUNWAL (HUF), T/AS JEETMAL NANDLAL, APMC YARD, VIJAYAPURA 586 101. PAN: AAAHN6510Q VS. THE INCOME TAX OFFICER, WARD 1, VIJAYAPURA. APPELLANT RESPONDENT ITA NO. 1505/BANG/2017 ASSESSMENT YEAR : 2008 - 09 SHRI KESARIMAL NANDLAL RUNWAL (HUF), T/AS NIMESH SECURITIES, APMC YARD, VIJAYAPURA 586 101. PAN: AABHK0872P VS. THE INCOME TAX OFFICER, WARD 1, VIJAYAPURA. APPELLANT RESPONDENT ASSESSEE BY : SHRI NIMESH RUNWAL, CA REVENUE BY : SHRI PALANI KUMAR, ADDL. CIT (DR) DATE OF HEARING : 2 2 . 1 1 .201 7 DATE OF PRONOUNCEMENT : 01 .1 2 .2017 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THESE TWO APPEALS ARE FILED BY TWO DIFFERENT BUT CO NNECTED ASSESSEES AND THESE APPEALS ARE DIRECTED AGAINST TWO SEPARATE ORD ERS OF LD. CIT (A), BELAGAVI BOTH DATED 01.05.2017 FOR THE SAME ASSESSMENT YEAR 2008-09. BOTH THE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS. 1504 & 1505/BANG/2017 PAGE 2 OF 8 2. THE GROUNDS RAISED BY THE ASSESSEE IN ITA NO. 15 04/BANG/2017 ARE AS UNDER. WITHOUT PREJUDICE TO EACH OTHER 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) PASSED UNDER SECTION 250 OF THE ACT IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, WEIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE APPEL LANT'S CASE. 2. THE LEARNED CIT (A) FAILED TO APPRECIATE THAT TH E SALARY PAID TO SHRI. NANDLALJ RUNWAL OF RS. 96,000/- WAS FAIR A ND REASONABLE GIVEN THE NATURE & IMPORTANCE OF SERVICE S RENDERED BY HIM IN APPELLANT'S BUSINESS AND THAT THE BALANCE SALARY OF RS. 48,000/- ALSO BE ALLOWED UNDER THE FACTS AND CI RCUMSTANCES OF THE CASE. 3. THE LEARNED CIT (A) FAILED TO APPRECIATE THAT TH E SALARY PAID TO MRS. SUNITA R RUNWAL OF RS. 96,000/- WAS FAIR AN D REASONABLE GIVEN THE NATURE & IMPORTANCE OF SERVICE S RENDERED BY HER IN APPELLANT'S BUSINESS AND THE SAME BE ALLO WED UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE LEARNED CIT (A) FAILED TO APPRECIATE THAT TH E SALARY PAID TO MRS. ARCHANA K RUNWAL OF RS. 48,000/- WAS FAIR A ND REASONABLE GIVEN THE NATURE & IMPORTANCE OF SERVICE S RENDERED BY HER IN APPELLANT'S BUSINESS AND THE SAME BE ALLO WED UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE LEARNED CIT (A) HAS FAILED TO APPRECIATE THE FACT THAT THE ABOVE SALARY PAYMENTS WERE TOWARDS IMPORTANT AN D CRUCIAL SERVICES RECEIVED BY THE APPELLANT'S BUSINE SS AND HENCE THE SAME WERE OUGHT TO BE ALLOWED UNDER THE F ACTS AND CIRCUMSTANCES OF THE CASE. 6. THE LEARNED CIT (A) HAS FAILED TO TAKE COGNISANC E OF VARIOUS DECISIONS RELIED UPON BY THE APPELLANT AND FAILED TO STATE AS TO HOW THEY WERE NOT RELEVANT TO THE APPEL LANT'S CASE AND IS HENCE IN VIOLATION OF PRINCIPLES OF NAT URAL JUSTICE. 7. THE LOWER AUTHORITIES HAVE FAILED TO FULFIL THE PRE- REQUISITES FOR MAKING DISALLOWANCE U/S 40A(2) OF TH E ACT BY NOT PLACING ON RECORD ANY CONCRETE EVIDENCE W.R.T EXCESSIVENESS OR UNREASONABLENESS OF VARIOUS PAYMEN TS DISALLOWED AND HAVE DISREGARDED VARIOUS EVIDENCES PRODUCED BY THE APPELLANT WHICH IS GROSSLY IN VIOLA TION OF PROVISIONS OF THE ACT, DECISIONS OF HON'BLE COURTS & TRIBUNALS AND IS ALSO DENIAL OF JUSTICE AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. ITA NOS. 1504 & 1505/BANG/2017 PAGE 3 OF 8 8. THE LEARNED ASSESSING OFFICER HAS MADE A TOTALLI NG AND MATHEMATICAL ERROR APPARENT FROM RECORD IN COMPUTAT ION OF TOTAL ASSESSED INCOME TO THE TUNE OF RS. 25,400/- A ND ITS CONSEQUENTIAL TAX, CESS, INTEREST IMPLICATIONS AND THE APPELLANT PRAYS THAT THE SAME BE ORDERED TO BE CORR ECTED TO PROVIDE RELIEF. 9. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, SUBSTI TUTE AND DELETE ANY OR ALL OF THE GROUNDS OF APPEAL URGED ABOVE. 10. FOR THE ABOVE AND OTHER GROUNDS TO BE URGED DUR ING THE HEARING OF THE APPEAL THE APPELLANT PRAYS THAT THE APPEAL BE ALLOWED IN THE INTEREST OF EQUITY AND JUSTICE. 3. SIMILARLY THE GROUNDS RAISED BY THE SECOND ASSES SEE IN ITA NO. 1505/BANG/2017 ARE AS UNDER. WITHOUT PREJUDICE TO EACH OTHER 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME- TAX PASSED UNDER SECTION 250 OF THE ACT IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, WEIGHT OF EVIDENCE , PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE APPEL LANT'S CASE. 2. THE LEARNED CIT (A) FAILED TO APPRECIATE THAT TH E SALARY PAID TO SHRI. NANDLALJ RUNWAL OF RS. 96,000/- WAS FAIR A ND REASONABLE GIVEN THE NATURE & IMPORTANCE OF SERVICE S RENDERED BY HIM IN APPELLANT'S BUSINESS AND THAT THE BALANCE SALARY OF RS. 48,000/- ALSO BE ALLOWED UNDER THE FACTS AND CI RCUMSTANCES OF THE CASE. 3. THE LEARNED CIT (A) FAILED TO APPRECIATE THAT TH E SALARY PAID TO SHRI. NIMESHK RUNWAL OF RS. 96,000/- WAS FAIR AN D REASONABLE GIVEN THE NATURE & IMPORTANCE OF SERVICE S RENDERED BY HIM IN APPELLANT'S BUSINESS AND THE SAM E BE ALLOWED UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE. 4. THE LEARNED CIT (A) FAILED TO APPRECIATE THAT TH E BROKERAGE PAID TO SHRI. KESARIMAL N RUNWAL OF RS. 3,50,000/- WAS FAIR AND REASONABLE GIVEN CRUCIAL ROLE PLAYED BY HIM IN APPELLANT'S FIRM, THE QUANTUM OF BUSINESS GENERATED BY HIM AND THE PREVALENT CUSTOMARY PRACTICES OF THE INDUSTRY AND T HE SAME BE ALLOWED UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE. 5. THE LEARNED CIT (A) FAILED TO APPRECIATE AND TAK E COGNISANCE OF EVIDENCES FURNISHED BY THE APPELLANT IN SUPPORT OF BROKERAGE PAID TO SMT. KAMALADEVI JAIN OF RS. 50,000/- WHICH WAS FAIR AND REASONABLE GIVEN THAT SHE WAS AN UNRELATED PARTY, QUANTUM OF B USINESS GENERATED BY HER IN APPELLANT'S FIRM AND THE PREVALENT CUSTOM ARY PRACTICES OF THE INDUSTRY AND THE SAME BE ALLOWED UNDER THE FACTS AN D CIRCUMSTANCES ITA NOS. 1504 & 1505/BANG/2017 PAGE 4 OF 8 OF THE CASE. 6. THE LEARNED CIT (A) HAS FAILED TO APPRECIATE THE FACT THAT THE ABOVE SALARY & BROKERAGE PAYMENTS WERE TOWARDS IMPORTANT AND CRUCIAL SERVICES AND THE QUANTUM OF BUSINESS RECEIVED BY TH E APPELLANT'S BUSINESS AND ALSO AS PER THE PREVALENT CUSTOMARY PR ACTICES OF THE INDUSTRY AND HENCE THE SAME WERE OUGHT TO BE ALLOWE D UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. THE LEARNED CIT (A) HAS FAILED TO TAKE COGNISANC E OF VARIOUS DECISIONS RELIED UPON BY THE APPELLANT AND FAILED T O STATE AS TO HOW THEY WERE NOT RELEVANT TO THE APPELLANT'S CASE AND IS HENCE IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 8. THE LOWER AUTHORITIES HAVE FAILED TO FULFIL THE PRE-REQUISITES FOR MAKING DISALLOWANCE U/S 40A(2) OF THE ACT BY NO T PLACING ON RECORD ANY CONCRETE EVIDENCE W.R.T EXCESSIVENESS OR UNREASONABLENESS OF VARIOUS PAYMENTS DISALLOWED AND HAVE DISREGARDED VARIOUS EVIDENCES PRODUCED BY THE APPEL LANT WHICH IS GROSSLY IN VIOLATION OF PROVISIONS OF THE ACT, D ECISIONS OF HON'BLE COURTS & TRIBUNALS AND IS ALSO DENIAL OF JU STICE AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 9. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, SUBSTI TUTE AND DELETE ANY OR ALL OF THE GROUNDS OF APPEAL URGED ABOVE. 10. FOR THE ABOVE AND OTHER GROUNDS TO BE URGED DUR ING THE HEARING OF THE APPEAL THE APPELLANT PRAYS THAT THE APPEAL BE ALLOWED IN THE INTEREST OF EQUITY AND JUSTICE. 4. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT GROU ND NOS. 1, 9 AND 10 IN BOTH THE APPEALS ARE GENERAL GROUNDS FOR WHICH NO SEPARATE A DJUDICATION IS CALLED FOR. HE ALSO SUBMITTED THAT THE ISSUES TO BE DECIDED ON MERIT ARE AS PER GROUND NOS. 2, 3, 4 AND 5 AND THE REMAINING GROUNDS I.E. 6, 7 A ND 8 ARE SUPPORTING GROUNDS. 5. THE LD. AR OF ASSESSEE SUBMITTED THAT THE ISSUE IN RESPECT OF DISALLOWANCE OUT OF SALARY PAID TO SHRI NANDLAL J RUNWALIS IS DISCUS SED BY THE AO ON PAGES 3 AND 4 OF ASSESSMENT ORDER PASSED BY THE AO IN THE C ASE OF SHRI KESARIMAL NANDLAL RUNWAL (HUF) IN ITA NO. 1505/BANG/2017 AND AS PER THE SAME, IT IS NOTED BY THE AO THAT SHRI NANDLAL J RUNWAL IS DRAWI NG SALARY OF RS. 96,000/- FROM THIS CONCERN AND HE IS ALSO DRAWING SALARY OF EQUAL AMOUNT FROM ANOTHER CONCERN I.E. M/S. JEETMAL NANDLAL PROP. SRI. NANDLA L J RUNWAL (HUF). HE SUBMITTED THAT THE AO HAS DISALLOWED THIS EXPENDITU RE TO THE EXTENT OF 50% OF ITA NOS. 1504 & 1505/BANG/2017 PAGE 5 OF 8 SALARY PAID U/S. 40A 2(B) OF THE IT ACT BUT WITHOUT POINTING OUT AS TO HOW THE SALARY PAID TO HIM IS EXCESSIVE OR UNREASONABLE. T HEREAFTER, HE SUBMITTED THAT IN RESPECT OF DISALLOWANCE OUT OF AMOUNTS PAID TO S HRI KESARIMAL NANDLAL RUNWAL IN HIS INDIVIDUAL CAPACITY BEING COMMISSION PAYMENT, THE AO DISCUSSED THE ISSUE ON PAGE NO. 4 OF THE ASSESSMENT ORDER AND IN THIS REGARD ALSO, THE AO HAS DISALLOWED THE ENTIRE AMOUNT OF THIS COMMISSION PAYMENT OF RS. 3.50 LAKHS U/S. 40A 2(B) OF THE IT ACT BUT AGAIN WITHOUT POINT ING OUT AS TO HOW THE PAYMENT OF COMMISSION TO THIS PERSON IS EXCESSIVE OR UNREAS ONABLE. 6. HE FURTHER SUBMITTED THAT SIMILARLY IN RESPECT O F PAYMENT OF BROKERAGE TO SMT. KAMALADEVI JAIN OF RS. 50,000/-, HE SUBMITTED THAT ON PAGE NO. 5 OF THE ASSESSMENT ORDER, THE AO HAS DISCUSSED THE PAYMENT OF BROKERAGE TO SHRI DEVI HAND JAIN AND SMT. KAMALADEVI JAIN AND DISALLO WED BOTH THESE PAYMENTS AND WHEN THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A), THE CIT(A) HAS DELETED THE DISALLOWANCE IN RESPECT OF P AYMENT OF BROKERAGE TO SHRI DEVI HAND JAIN BUT CONFIRMED THE DISALLOWANCE IN RE SPECT OF SIMILAR PAYMENT TO SMT. KAMALADEVI JAIN, ALTHOUGH THERE IS NO DIFFEREN CE IN FACTS. HE SUBMITTED THAT FOR NONE OF THESE DISALLOWANCES U/S 40A (2B), ANY BASIS IS INDICATED BY THE AO / CIT(A) AS TO HOW THESE PAYMENTS ARE EXCESSIVE OR UNREASONABLE AND HOW PROVISIONS OF SECTION 40A (2B) ARE APPLICABLE. HE SUBMITTED THAT ALL THESE DISALLOWANCES SHOULD BE DELETED. 7. REGARDING GROUND NO. 8 IN ITA NO. 1504/BANG/2017 , THE BENCH WANTED TO KNOW AS TO WHETHER ANY GROUND WAS RAISED BY ASSESSEE BEF ORE CIT (A) IN THIS REGARD. IN REPLY, IT WAS SUBMITTED BY LD. AR OF ASSESSEE TH AT NO SUCH GROUND WAS RAISED BEFORE CIT (A). THE BENCH POINTED OUT THAT IN THAT SITUATION, THIS GROUND CANNOT BE RAISED AS PART OF ORIGINAL GROUND AND IT CAN BE RAISED ONLY AS ADDITIONAL GROUND BUT THE ISSUE INVOLVED IN THIS GROUND CANNOT BE ADMITTED AS ADDITIONAL GROUND ALSO BECAUSE IT IS A FACTUAL DISPUTE AND NOT A LEGAL DISPUTE. IN REPLY, LD. AR OF ASSESSEE HAD NOTHING TO SAY. THE LD. DR OF R EVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. ITA NOS. 1504 & 1505/BANG/2017 PAGE 6 OF 8 8. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. REGARD ING GROUND NO. 8 IN ITA NO. 1504/BANG/2017, I HOLD THAT THIS GROUND IS NOT ADMI SSIBLE BECAUSE THIS IS A NEW GROUND RAISED BEFORE THE TRIBUNAL AND THIS IS A FAC TUAL ISSUE AND NOT A LEGAL ISSUE. ACCORDINGLY THIS GROUND IS REJECTED. 9. REGARDING THE REMAINING GROUNDS IN BOTH THE APPE ALS, IT IS SEEN THAT THE DISALLOWANCE WAS MADE BY THE AO BY INVOKING THE PRO VISIONS OF SECTION 40A 2(B) OF THE IT ACT. HENCE FOR THE SAKE OF READY RE FERENCE I REPRODUCE THE PROVISIONS OF SECTION 40A 2(A) AND 40A 2(B). THE S AME ARE AS UNDER:- (2) (A) WHERE THE ASSESSEE INCURS ANY EXPENDITURE I N RESPECT OF WHICH PAYMENT HAS BEEN OR IS TO BE MADE TO ANY PERSON REF ERRED TO IN CLAUSE (B) OF THIS SUB- SECTION, AND THE 3 ASSESSING] OFFICER IS OF OPINION THAT SUCH EXPENDITURE IS EXCESSIVE OR UNREASONABLE HAVIN G REGARD TO THE FAIR MARKET VALUE OF THE GOODS, SERVICES OR FACILIT IES FOR WHICH THE PAYMENT IS MADE OR THE LEGITIMATE NEEDS OF THE BUSI NESS OR PROFESSION OF THE ASSESSEE OR THE BENEFIT DERIVED BY OR ACCRUI NG TO HIM THEREFROM, SO MUCH OF THE EXPENDITURE AS IS SO CONSIDERED BY H IM TO BE EXCESSIVE OR UNREASONABLE SHALL NOT BE ALLOWED AS A DEDUCTION : (B) THE PERSONS REFERRED TO IN CLAUSE (A) ARE THE F OLLOWING, NAMELY:- (I) WHERE THE ASSESSEE IS AN INDIVIDUAL ANY RELATIV E OF THE ASSESSEE; (II) WHERE THE ASSESSEE IS A COMPANY, ANY DIRECTOR OF THE FIRM, ASSOCIATION OF PERSONS OR COMPANY, PARTNER OF THE H INDU UNDIVIDED FAMILY FIRM, OF MEMBER IF THE ASSOCIATION OR FAMILY , OR FAMILY, OR ANY RELATIVE OF SUCH DIRECTOR, PARTNER OR MEMBER; (III) ANY INDIVIDUAL WHO HAS A SUBSTANTIAL INTEREST IN THE BUSINESS OR PROFESSION OF THE ASSESSEE, OR ANY RELATIVE OF SUCH INDIVIDUAL; (IV) A COMPANY, FIRM, ASSOCIATION OF PERSONS OR HIN DU UNDIVIDED FAMILY HAVING A SUBSTANTIAL INTEREST IN THE BUSINES S OR PROFESSION OF THE ASSESSEE OR ANY DIRECTOR, PARTNER OR MEMBER OF SUCH COMPANY, FIRM, ASSOCIATION OR FAMILY, OR ANY RELATIVE OF SUCH DIRE CTOR, PARTNER OR MEMBER; (V) A COMPANY, FIRM, ASSOCIATION OF PERSONS OR HIND U UNDIVIDED FAMILY OF WHICH A DIRECTOR, PARTNER OR MEMBER, AS THE CASE MAY BE, HAS A SUBSTANTIAL INTEREST IN THE BUSINESS OR PROFESSION OF THE ASSESSEE; OR ANY DIRECTOR, PARTNER OR MEMBER OF SUCH COMPANY, FI RM, ASSOCIATION OR FAMILY OR ANY RELATIVE OF SUCH DIRECTOR, PARTNER OR MEMBER; (VI) ANY PERSON WHO CARRIES ON A BUSINESS OR PROFES SION,- (A) WHERE THE ASSESSEE BEING AN INDIVIDUAL, OR ANY RELATIVE OF SUCH ASSESSEE, HAS A SUBSTANTIAL INTEREST IN THE BUSINES S OR PROFESSION OF THAT PERSON; OR ITA NOS. 1504 & 1505/BANG/2017 PAGE 7 OF 8 (B) WHERE THE ASSESSEE BEING A COMPANY, FIRM, ASSOC IATION OF PERSONS OR HINDU UNDIVIDED FAMILY, OR ANY DIRECTOR OF SUCH COMPANY, PARTNER OF SUCH FIRM OR MEMBER OF THE ASSOCIATION OR FAMILY , OR ANY RELATIVE OF SUCH DIRECTOR, PARTNER OR MEMBER, HAS A SUBSTANTIAL INTEREST IN THE BUSINESS OR PROFESSION OF THAT PERSON. EXPLANATION. - FOR THE PURPOSES OF THIS SUB- SECTION, A PERSON SHALL BE DEEMED TO H AVE A SUBSTANTIAL INTEREST IN A BUSINESS OR PROFESSION, IF,- (A) IN A CASE WHERE THE BUSINESS OR PROFESSION IS C ARRIED ON BY A COMPANY, SUCH PERSON IS, AT ANY TIME DURING THE PRE VIOUS YEAR, THE BENEFICIAL OWNER OF SHARES (NOT BEING SHARES ENTITL ED TO A FIXED RATE OF DIVIDEND WHETHER WITH OR WITHOUT A RIGHT TO PARTICI PATE IN PROFITS) CARRYING NOT LESS THAN TWENTY PER CENT OF THE VOTIN G POWER; AND (B) IN ANY OTHER CASE, SUCH PERSON IS, AT ANY TIME DURING THE PREVIOUS YEAR, BENEFICIALLY ENTITLED TO NOT LESS THAN TWENTY PER CENT OF THE PROFITS OF SUCH BUSINESS OR PROFESSION. 10. FROM THE COMBINED READING OF SECTION 40A 2(A) A ND 40A 2(B) AS REPRODUCED ABOVE, IT COMES OUT THAT IN RESPECT OF ANY PAYMENT TO A PERSON COVERED BY SECTION 40A 2(B), IF THE AO IS OF 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 OR THE LEG ITIMATE NEEDS OF THE BUSINESS OR PROFESSION OF THE ASSESSEE OR THE BENEFIT DERIVE D BY OR ACCRUING TO HIM THEREFROM, SO MUCH OF THE EXPENDITURE AS IS SO CONS IDERED BY HIM TO BE EXCESSIVE OR UNREASONABLE SHALL NOT BE ALLOWED AS A DEDUCTION. HENCE, IT IS A PRE REQUIREMENT BEFORE MAKING ANY DISALLOWANCE UNDE R THESE SECTIONS THAT THE AO HAS TO WORK OUT THE EXCESSIVE OR UNREASONABLE AM OUNT BY COMPARING IT WITH THE MARKET RATE OF THE SERVICES / GOODS FOR WHICH T HE PAYMENT IN QUESTION HAS BEEN MADE BY THE ASSESSEE. IN THE PRESENT CASE, AS PER THE ORDERS OF AUTHORITIES BELOW, THERE IS NO INDICATION AS TO HOW THEY HAVE CONSIDERED THAT IN RESPECT OF PAYMENT TO SHRI NANDLAL J RUNWAL AND MRS . SUNITHA R RUNWAL, 50% IS EXCESSIVE AND 100% PAYMENT TO SHRI NIMESH K RUNW AL, SHRI KESARIMAL N RUNWAL, SMT. KAMLADEVI JAIN, MRS. SUNITHA R RUNWAL AND MRS. ARCHANA K RUNWALIS ARE EXCESSIVE AND UNREASONABLE. HENCE I H OLD THAT THE DISALLOWANCE MADE BY THE AO IN THE FACTS OF THE PRESENT CASE AS PER ABOVE DISCUSSION IS NOT SUSTAINABLE BECAUSE THERE IS NO BASIS INDICATED BY HIM OR BY CIT(A) AS TO HOW THE PAYMENTS MADE TO THESE PERSONS ARE EXCESSIVE AN D UNREASONABLE BY ITA NOS. 1504 & 1505/BANG/2017 PAGE 8 OF 8 BRINGING ON RECORD MARKET PRICE OF THE SERVICES REC EIVED BY THE ASSESSEE FROM THESE PERSONS. HENCE THESE DISALLOWANCES ARE DELET ED. 11. IN THE RESULT, THE APPEAL IN THE CASE OF SHRI K ESARIMAL NANDLAL RUNWAL (HUF) IN ITA NO. 1505/BANG/2017 IS ALLOWED AND THE REMAINING APPEAL IN THE CASE OF SHRI NANDLAL JEETMAL RUNWAL (HUF) IN ITA NO. 1504/B ANG/2017 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 01 ST DECEMBER, 2017. /MS/ COPY TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.