2015 (10) TMI 2296

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.... Assessing Officer under section 40A(2) of the Act and confirmed by the ld. CIT(Appeals). 2. The assessee in the present case is a partnership fi rm, which is engaged in the business of trading of pulses. The return of income for the year under consideration was filed by it on 22.03.2010 declaring total income of Rs. 9,800/-. During the course of assessment proceedings, it was noticed by the Assessing Officer that the assessee-fi rm has purchased yellow peas on 26.02.2009 and 03.03.2009 from four different parties at different rates. According to him, these purchases having been made by the assessee from the persons specified in clause (b) of sub-section (2) of sect ion 40A of the Act, the disallowance under section 40A(2) was called for....

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....009, the rate at which y ellow peas was purchased from Prime Global (P) Ltd. (Unrelated party) was Rs. 15,890/- per MT while the rate at which purchase was made from related party was between Rs. 16,000/- per MT to Rs. 16,180/- per MT. The AO issued a show cause noti ce to the appellant on 14.12.2011 to justify why the difference of Rs. 9,62,730/- should not be disallowed u/s 40A(2). In reply the appellant merely submitted that there was price fluctuation. The appellant failed to bring on record any material to prove that the quality was different or there were any other reasons for difference in rate. I find detailed reason for making the disallowance. It is apparent from the annexure 'A' to the assessment order, that the AO has brought on....