Arm's-length sale price controls valuation where a common director alone does not establish related-person status.

The assessable value for batteries sold to a sole distributor was to be based on the assessee's sale price where the transactions were shown to be at arm's length. A single common director, without further evidence of lack of independence, was insufficient to treat the distributor as a related person or to displace the principal-to-principal sale price. In the absence of material showing that the sales were not genuine commercial dealings, the assessee's price to the distributor remained the proper basis for valuation, and the contrary approach was rejected.

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Issues: Whether the price at which the assessee sold batteries to its sole distributor could form the basis of assessable value, and whether the existence of one common director by itself made the distributor a related person so as to displace the assessee's sale price.

Analysis: The record disclosed no evidence that the sales to the distributor were not at arm's length. The mere fact that one director was common to both concerns was held insufficient, by itself, to establish that the sales were not on a principal-to-principal basis or that the distributor was a related person. In the absence of material showing lack of independence in the transactions, the assessee's sale price to the distributor was the proper basis for valuation.

Conclusion: The assessee's sale price to the distributor was accepted as the assessable value, and the contrary view was rejected.

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