AMEYA PERFOMATT FINSERV PRIVATE LIMITED,VADODARA vs. THE DY.CIT, CIRCLE-1(1)(1), VADODARA

ITA 2290/AHD/2025Status: DisposedITAT Ahmedabad14 May 2026AY 2014-155 pages
AI SummaryRemanded

What were the facts?

The assessee, a newly incorporated company, acquired shares from an associate concern at a price higher than the face value. The Assessing Officer invoked Section 40A(2)(a) to add the excess payment as expenditure, treating it as unreasonable.

What did the Tribunal hold?

The Tribunal held that Section 40A(2)(a) applies only to expenditure claimed in computing business income. Since the share acquisition was treated as a capital investment and not routed through the Profit and Loss account, the section was not applicable. The AO also failed to establish the fair market value of the shares.

What were the issues?

Whether Section 40A(2)(a) can be invoked for the acquisition of capital assets not claimed as expenditure in the Profit and Loss account. Whether the Assessing Officer correctly determined the fair market value of the shares.

Which sections of the Income-tax Act were involved?

Section 40A(2)(a),Section 40A(2)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD

For Appellant: Shri Hemant Suthar, AR
For Respondent: Shri Rameshwar P Meena, Sr. DR
Hearing: 27.04.2026Pronounced: 14.05.2026

PER MS. SUCHITRA R. KAMBLE, JUDICIAL MEMBER :

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This appeal has been filed by the assessee against the order dated 03.09.2025 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as ‘Ld. CIT (A)’ in short), under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’ in short) for Assessment Year 2014-15. 2. The assessee has raised following grounds of appeal:- “1. The Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi has erred in law and in facts in confirming the action of the Ld. A.O. in making an addition /disallowance applying t

The order continues below.

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