Sec. 40A of Income Tax Act, 1961—Business Disallowance — For invoking the provision of section 40A(2)(b), the Assessing Officer has to form an opinion of expenses more than the fair market value or not according to the legitimate needs of the business or no benefit derived and in the case of assessee, the Assessing Officer has only compared royalty expenses of the preceding assessment year and no efforts have been made for identifying the fair market value of such expenses during relevant period, which is one of the requirement for invoking the provisions of section 40A(2)(b) ; Under transfer pricing provisions the arm’s-length price is compared with similar transactions, though the provisions of section 40A(2)(b) are general provision as compared to the specific provisions of the transfer pricing, the Assessing Officer was required to compare the royalty expenses paid in case of the similar product by other companies during the relevant period and assessing Officer has not done any such exercise and only made basis of expenses paid in earlier years, thus, the disallowance made out of royalty expenses is deleted. - DE DIAMOND ELECTRIC INDIA PVT. LTD. V/s ASSTT. CIT - [2020] 27 ITCD Online 048 (ITAT-DELHI)