2018 (2) TMI 1460 - HC - Income Tax

Suppression of sales - differential price between the price of two flats sold to the sister concern and the price offered by third parties - Appellate Commissioner and Tribunal concurred in their factual finding that there had been no suppression of sales as the two flats were sold at a discount price, for business exigencies and in particular, to compensate SAPL, who had advanced interest free loan to the assessee - Held that - It is clear from the language of Section 260A of the IT Act an appeal under the aforesaid section shall lie to the High Court from every order passed in appeal by the Appellate Tribunal only if the High Court is satisfied that the case involves a substantial question of law. In this case, the Appellate Commissioner and the learned Tribunal have arrived at the concurrent factual finding that there was no suppression of sales. There is no question of law, not to speak of substantial question of law. As held by the Supreme Court in Vijay Kumar Talwar v. Commissioner of Income Tax, Delhi 2010 (12) TMI 2 - Supreme Court of India the general rule is that the High Court does not interfere with concurrent findings of Courts below. - Decided in favour of assessee.

Issues:
1. Appeal against the judgment and order of the Income Tax Appellate Tribunal.
2. Alleged sales suppression and addition of income.
3. Disallowance under Section 14A of the Income Tax Act.
4. Differential pricing of flats sold to sister concern and third parties.
5. Whether the differential price amounts to suppression of sales.

1. Appeal against the judgment and order of the Income Tax Appellate Tribunal:
The appeal filed by the Revenue was against the order passed by the Income Tax Appellate Tribunal, where the Tribunal had partly allowed the appeal of the respondent assessee by directing the Assessing Officer to delete the addition of income towards alleged sales suppression in the Assessment year 2010-11.

2. Alleged sales suppression and addition of income:
The Assessing Officer added a significant amount towards alleged sales suppression in the assessment of the assessee company. The Appellate Commissioner partly allowed the appeal by rejecting the disallowance under Section 14A but allowing the challenge against the addition of income related to sales suppression.

3. Disallowance under Section 14A of the Income Tax Act:
The Appellate Commissioner upheld the disallowance under Section 14A of the Income Tax Act, which was a part of the appeal filed by the assessee against the assessment order.

4. Differential pricing of flats sold to sister concern and third parties:
The Assessing Officer found that the assessee company had sold two flats to its sister concern at a lower price compared to the price offered to third parties. This difference in pricing raised concerns of possible suppression of sales.

5. Whether the differential price amounts to suppression of sales:
The main issue before the Appellate Commissioner was to determine whether the differential pricing of flats sold to the sister concern and third parties could be considered as suppression of sales. The Appellate Commissioner found that the concessional pricing to the sister concern was justified due to business exigencies and the interest-free advance received from the sister concern.

The Tribunal concurred with the factual findings of the Appellate Commissioner that there was no suppression of sales. They highlighted the genuine reasons behind the reduced sale price to related parties and confirmed the decision in favor of the assessee. The High Court dismissed the Tax Case Appeal, stating that there was no substantial question of law involved as both the Appellate Commissioner and the Tribunal had arrived at concurrent factual findings regarding the absence of sales suppression.

Therefore, the High Court upheld the decision of the lower authorities and dismissed the appeal filed by the Revenue, emphasizing that there was no suppression of sales based on the factual findings and legal principles applied in the case.

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