2019 (7) TMI 1650

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....Revenue came to the conclusion that they were selling the goods to another company M/s.Bharat, who appeared to be related persons as both firms :- (i) were located on same plot of land, (ii) were managed by three common directors, namely Sri Gajanand Bhalotia, Sri Naveen Bhalotia & Sri Krishna Bhalotia (Second and third are sons of Sri Gajanand Bhalotia) (iii) The head office of both the units function from same premises. (iv) Both the units are using same telephone no.0647-2435288 and Fax no. (v) One letter head dated 05.02.2002 to BHARAT was found to have printed "BISCO" on the top right side. (vi) The balance sheet & profit and loss account of BISCO for 2005-06 indicated against BHARA....

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....nambiguously that both the companies are having shares of each other and thus have any nexus for mutuality of interest in each other's business. He, therefore, held that the appellant and M/s.Bharat are not related persons in terms of section 4(3) (b)(iv). For the same reason he also held that for the purpose of SSI exemption, the two companies cannot be clubbed together and SSI exemption Notification is available independently to both the companies. Thus holding, he dropped the demand of duty, interest and the proposal to impose penalty. 3. Aggrieved by this order, the present appeal is filed by the Revenue on the following grounds:- (a) The Commissioner has himself ruled that there appears to be a mutuality of interest in each....

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....re inter connected undertakings, (ii) they are relatives. (iii) Amongst them the buyer is a relative and a distributor of the assessee, or a sub-distributor of such distributor, or (iv) They are so associated that they have interest, directly or indirectly, in the business of each other Explanation-In this clause- (ii) "relative" shall have the meaning assigned to it in clause (41) of Section 2 of the Companies Act, 1956" 6. In this case, as correctly pointed out by the learned Commissioner, there is nothing in the records to show that the two companies are related i.e., they are inter-connected undertakings or relatives or one is a distributor of the other or they are so associated that they ....