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TMI Blog2017 (7) TMI 365X X X X Extracts X X X X X X X X Extracts X X X X ..... ch points out that the impugned order passed by the Income Tax Appellate Tribunal on this count alone deserves to be quashed and set aside. The learned counsel further pointed out that as such amounts were allegedly paid in terms of the provisions of Section 40A(2)(a) of the said Act which payments are excessive and consequently the appellate authority was not justified in deleting the addition made by the Assessing Officer disallowing the hire charges of the barges as being excessive. The learned counsel further submits that the authorities below have erroneously found that the amounts were not excessive and as such the substantial question of law framed by this Court is to be answered in favour of the appellant. 4. On the other hand, Mr. Pardiwalla, learned Senior Counsel appearing for the respondent has submitted that the question of examining whether the amounts are received by the HUF or the members would be irrelevant as according to him the fact finding authorities below have concurrently found that the amounts charged were not in excessive as they were based on the rates quoted by the Barge Owners Association. The learned Senior Counsel further pointed out that in such cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidence or that any relevant document has been over-looked while arriving at such findings of fact. As already pointed out herein above, the findings of fact are based on the documentary evidence and consequently, this Court in the present appeals under Section 260 of the Income Tax Act cannot reappreciate the evidence to come to any contrary findings. As the appellant have failed to produce any evidence or material to show that the amount of charges were excessive, we are of the opinion that there is no infirmity committed by the Tribunal while coming to the conclusion that the amount charged are not excessive and as such do not come within the four corners of Section 40A(2)(a) of the Income Tax Act. 7. In fact, this Court in the judgment in the case of V. S. Dempo & Co. (P) Ltd., (supra ) has observed at paras 6, 9 and 10 thus : "6. In our view, in a business of export consistency of supply as well as quality of supply is important. In order to assure a consistent supply of material of the same quality the purchaser of a commodity may pay to a seller bound under a contract a little higher than the current rate. Furthermore, in case of yearly contracts by agreeing to bye goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siders excessive or unreasonable. Clause (b) of Section 40A(2) reads as under : "40A(2)(b) The persons referred to in clause (a) are the following, namely:- (i) where the assessee is an individual any relative of the assessee; (ii) where the assessee is a company, firm, association of persons or Hindu undivided family, any director of the company, partner of the firm, or member of the association or family, or any relative of such director, partner or member; (iii) any individual who has a substantial interest in the business or profession of the assessee, or any relative of such individual; (iv) a company, firm, association of persons or Hindu undivided family having a substantial interest in the business or profession of the assessee or any director, partner or member of such company, firm, association or family, or any relative of such director, partner or member; (v) a company, firm, association of persons or Hindu undivided family of which a director, partner or member, as the case may be, has a substantial interest in the business or profession of the assessee; or any director, partner or member of such company, firm, association or family or any relative of such direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a substantial interest in the business or profession of the assessee or any director, partner or member of such company, firm, association or family, or any relative of such director, partner or member is a related person. Again a subsidiary company does not fall in any of the class of persons mentioned in sub-clause (iv) of clause (b) of Section 40A(2). In law, a holding company is a member of subsidiary company and holds more than 50% equity share capital of the subsidiary company (except in cases where it controls the composition of the board of directors without holding majority of the shares). While the holding company is a member of its subsidiary company, the subsidiary company is not a member of the holding company. As, the subsidiary company was not a member of the assessee sub-clause (iv) of clause (b) of Section 40A(2) of the Act is also not attracted in the present case." 8. Taking note of the said observations, we find that in the present case, the learned Tribunal has found in the impugned order dated 18.02.2009 for the Assessment Years 2003-2004 that there is no evidence brought on record to show that the payment itself was excessive and it had enriched the individu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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