Related person valuation fails where no extra consideration is proved and publicity-cost sharing alone is insufficient.

The dealer was not a related person of the assessee because no material showed relationship within the Companies Act, 1956, and the fact that the dealer acted as a sole distributor did not by itself satisfy the statutory definition. The sale price charged to the dealer was the same as that charged to other dealers, and the Revenue failed to establish any extra consideration flowing to the assessee. Sharing advertising or publicity expenses, without more, was insufficient to constitute additional consideration. As a result, the assessable value could not be fixed on the basis of the dealer's resale price, and the issue was decided in favour of the assessee.

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Issues: Whether the dealer was a related person of the assessee so that the assessable value of the goods could be fixed on the basis of the dealer's resale price, and whether sharing of publicity expenses amounted to additional consideration flowing to the assessee.

Analysis: The sale price charged to the dealer was the same as the price charged to other dealers, and the Revenue did not establish any extra consideration flowing to the assessee. Sharing of advertising or publicity expenses, by itself, was held insufficient to establish additional consideration. No material was produced to show that the dealer was a relative of the assessee within the meaning of the Companies Act, 1956; therefore, even if the dealer was a sole distributor, it would not fall within the statutory definition of related person.

Conclusion: The dealer was not a related person and the assessable value could not be based on its resale price. The issue was decided in favour of the assessee.

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