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TMI Blog2012 (12) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The only issue in the grounds of appeal of the Revenue is that the Commissioner of Income Tax (Appeals) erred in deleting the disallowance made by the Assessing Officer under section 40A(2) towards differences in price of leather purchased from related parties and third parties. 3. The Revenue also raised the ground that there is violation of provisions of Rule 46A, as no opportunity was given to the Assessing Officer to examine the fresh evidence filed by the assessee before the Commissioner of Income Tax (Appeals). 4. Facts of the case are that the assessee is a firm engaged in the business of manufacturing leather and leather garments, filed its return of income for the assessment year 2008-09 admitting total income of Rs..33,15,090 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant had purchased some finished and semi-finished goods from a proprietory concern which is a related party. This issue was also sent for remand proceedings at the time of appeal. In this remand report, the Assessing Officer mentions that the appellant has not furnished details relating to the purchases made by the appellant from the related party. But the learned Authorised Representative Mr. T. Banusekar, in the rejoinder to the Remand Report, submitted that they have given all the information and they could not understand why the Assessing Officer has sent such a Remand Report. In fact, they volunteered to show some of the purchase invoices of the appellant with related concern as well as unrelated concerns. I have perused these pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A along with copies of invoices for purchase of various types of leather from both related and unrelated parties and the Commissioner of Income Tax (Appeals) forwarded the same to the Assessing Officer and called for a remand report and the remand report was also submitted by the Assessing Officer. Therefore he submits that since the Commissioner of Income Tax (Appeals) has forwarded all the information to the Assessing Officer and called for a remand report, there is no violation of Rule 46A and the Commissioner of Income Tax (Appeals), after having considered the remand report and the details furnished by the assessee, came to the conclusion that there is no excess payment made by the assessee to the related parties. The counsel for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure 2) Party Price Range (Rs.. Per sq.ft.) M/s. Prakash Overseas (related party) Rs..30.50 per sq.ft. to Rs. 38/- per sq.ft. M/s. Chendur Leathers (unrelated party) Rs..30 per sq.ft. to Rs.. 39 per sq.ft. M/s. K.A.R. Leathers Pvt. Ltd. (unrelated party) Rs..33 per sq.ft. and Rs..34.50 per sq.ft. 2. Raw Sheep Skins (Refer Annexure 3) Party Price Range (Rs.. Per pc) M/s. Chamundi Leathers (related party) Rs..225 per pc to Rs. 237/- per pc. M/s. Mahalakshmi Traders (unrelated party) Rs.. 240 per pc to Rs.. 250 per pc. 3. Sheep Finished Leather (Refer Annexure 4) Party Price Range (Rs.. Per dcm) M/s. Prakash Overseas (related party) Rs..6.00 per dcm M/s. Nagarjuna Leathers P. Ltd. (unrelated party) Rs..6.90 per dcm M/s. Vaig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s evident that in respect of each item, the rate on which the purchases were made from the related parties falls within the price range of the unrelated parties. Thus, it is seen that the price paid to related parties are not excessive or unreasonable. Without going into these details, the Assessing Officer merely considered the average rate of purchases and reached a conclusion that the prices paid to the related parties were excessive for which there is no basis. Even while sending the remand report to the Commissioner of Income Tax (Appeals), the Assessing Officer did not consider all these aspects inspite of all the details were available with him. Therefore, in our view, the Commissioner of Income Tax (Appeals) is justified in holding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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