Ajnas (Student) (844 Points)

02 December 2021  
The assessee company purchased an asset from its related party. Naturally, the payment is debited to FA account and not claimed as a deduiction from profits & gains of buisness or profession. The Tax auditor wants to report this transaction under clause 18 of Form 3CD under head "Payments to Relatives under section 40A(2)(b). My view is this shoudl not be reported as the payment or expenditure is not claimed as a deduction in computing total income which is the spirit of section 40A. Am I correct