2001 (4) TMI 42

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....r short "the Act of 1961"), by holding that the assessee has paid excessive purchase price to the sellers on purchases made by it from its sister concerns or group of concerns than on the purchases made by the assessee from the primary producers, i.e., Hindustan Aluminium Co. Ltd., etc., where the assessee-directors were not having substantial interest. The total excess payment over the fair market value was estimated to be Rs.7,54,584 on account of the purchases made by the assessee from Salbo Conductors Pvt. Ltd., Salbo Engineering Pvt. Ltd. and Bali Cables Pvt. Ltd. The additions made on that ground were challenged before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) had accepted the explanation furni....

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....so given. Thus finding the sale rate of the primary producers will naturally be on a lower consideration as compared to other persons, no adverse inference can be drawn against the assessee for having paid excessive price to the aforesaid concerns by comparing the sale rate of the primary producers. However, finding that in two purchases of steel wire effected by the appellant in August, 1988, and November, 1988, where the purchase rate was different from higher vis a vis the market rate and the size of the wire was practically the same, the difference so paid was subjected to the provisions of section 40A(2) and the excess amount of expenses estimated at Rs.13,330 were sustained as additions under section 40A(2). These findings of the Co....