TaxTMI 
TaxTMI 
2010 (9) TMI 341
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....Appellate Tribunal is justified in law in upholding the decision of the learned Commissioner of Income-tax (Appeals) in deleting the addition of Rs. 6,18,910 made by the Assessing Officer on account of purchases made from its sister concern being specified person under section 40A(2)(b) of the Income-tax Act, 1961 on the rates higher than the market rates. (ii) Whether on the facts and circumstances of the case, the hon'ble Income-tax Appellate Tribunal is justified in law in upholding the decision of the learned Commissioner of Income-tax (Appeals) in deleting the addition of Rs. 51,35,244 made by the Assessing Officer on account of sales made to its sister concern being specified person under section 40A(2)(b) of the Income-tax ....
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....ant that difference in purchase rate was on account of quality of raw material etc., is duly verifiable from these details and the same cannot be rejected out rightly. Therefore, the contention that the raw material purchased by the appellant from the sister concern being end cuttings scrap could be of better quality appears to be correct and the appellant could very well have made purchases of the same by paying higher rate as being claimed. Further, as brought out in the written submissions, the rate of scrap purchased by the appellant from the sister concern is quite comparable to the rates for such scrap published in Steel Town (weekly) in which such rates are published on day-to-day basis. Therefore, from that angle also, the....
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....example on November 3, 2004, sales have been made to the sister concern of the appellant by two bills first being at Rs. 23,027 per mt. and whereas the second at Rs. 24,728 per mt. Similarly on November 4, 2004, whereas sales have been made to sister concern by bill Nos. 523 and 524 at Rs.23,027 per mt. on the same day sale has been made to the same sister concern at Rs. 21,383 per mt. vide bill No. 525, she has ignored the rates for bill Nos. 523 and 524. Similar position could be seen at a number of other places. For example on November 9, 2003, sales have been made to the sister concern at Rs. 22,273 per mt. whereas sale has also been made at Rs. 26,283 per mt. Coming to the sales made to other parties, sales on November 16, 2004 has bee....
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....ails. Therefore, these details do show that there has to be some difference in the quality of the material sold to different parties or to the sister concern which might be the reason for difference in the rates charged for the sales made on the same day etc. as discussed above. Though the product being sold is some, i.e., alloy steel ingots or non-alloy steel ingots as per the above details there is substantial differences in the sale rate of some product on the same day. This does show that there is a difference in the quality of the products as being claimed. In view of the above details, the observations of the Assessing Officer that there could not be any difference in quality of the products manufactured by the appellant and which cou....