Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2015 (5) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (5) TMI 517 - HC - Income TaxDisallowance u/s 40A(2)(A) - excessive and unreasonable expenses - sister concerns - imposition of higher rate for conversion charges in respect of pig iron and C.I. Scrap - Held that:- The Assessee has not furnished any information or evidence to show that even the rate of 2766.76 M.T. on account of conversion of pig iron and C.I. Scrap is equal to the market rate the assessee has nowhere pleaded that the rate of 2766.76 paid for conversion of pig iron & C.I. Scrap is reasonable and not excessive having regard to the legitimate need of the business and the market value of the matter we are therefore of the considered view that the rate of 2766.76 paid by the Assessee to M/s. Marcandy Pd. Radha Pd. P. Ltd. on account of the conversion charges of pig iron & C.I. Scrap is excessive and unreasonable and is liable to be disallowed to the extent of its being so excessive or unreasonable. The rate of conversion adopted by the A.O. at ₹ 2,000/- per M.T. for the year under consideration is found reasonable and proper in as much as the assessee has not disputed as such this rate adopted by the A.O. We therefore direct to allow the deduction of conversion charges for pig iron & C.I. scrap @ ₹ 2,000/- per M.T. and to allow the conversion charges in respect of railway sleeper scrap @ ₹ 2,766.76 per M.T. as claimed by the Assessee The A.O. shall modify the assessment order accordingly. Also Assessing Officer had specifically noted that the rate of conversion adopted by the Assessing Officer was not disputed by the assessee. It is also evident from the letter dated 21st November, 1998 that the sister concern had explained for charging rate of conversion charges at 2766.76 for the accounting year 1993-94. No interference to above tribunal order required - Decided against assessee.
|