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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 ..... Appeal decides in favour of assessee - I.T.A. No. 321/Mds/2012 - - - Dated:- 26-7-2012 - Shri N.S. Saini Shri Challa Nagendra Prasad, JJ. Appellant by : Ms. Anupama Shukla, CIT Respondent by : Shri T. Banusekar, C.A. ORDER PER Challa Nagendra Prasad, Judicial Member This is an appeal filed by the Revenue against the order of the Commissioner of Income Tax (Appeals) IV, Chennai dated 17.11.2011 in ITA No. 110/10-11/A.IV for the assessment year 2008-09. Ms. Anupama Shukla, CIT represented on behalf of the Revenue and Shri T. Banusekar, C.A. represented on behalf of the assessee. 2. The only issue in the grounds of appeal of the Revenue is that the Commissioner of Income Tax (Appeals) erred in deleting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12,72,744/- and disallowed the same invoking the provisions of section 40A(2)(b) of the Act. 5. On appeal, the Commissioner of Income Tax (Appeals) considering the submissions of the assessee and the materials placed before him held that there is neither any suspicious transaction nor any evidence to show that the assessee had paid more than what it was paying to the related parties and therefore deleted the disallowance made by the Assessing Officer. The observation of the Commissioner of Income Tax (Appeals) at para 5 as under: 5. The second disallowance made by the appellant is under Section 40A(2)(b) where the appellant had purchased some finished and semi-finished goods from a proprietory concern which is a related party. This iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income Tax (Appeals) for the first time, which was not produced before the Assessing Officer in the course of assessment proceedings and based on such materials, the Commissioner of Income Tax (Appeals) concluded that there was no excess payment to the related parties and allowed the relief to the assessee. Therefore, the counsel for the Revenue submits that there is violation of provisions of Rule 46A as no opportunity was given to the Assessing Officer to examine those materials. 8. In reply, the counsel for the assessee referring to page 8 of the paper book submits that the assessee filed petition under Rule 46A along with copies of invoices for purchase of various types of leather from both related and unrelated parties and the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he details furnished before us, we could see that the Assessing Officer failed to consider that the purchases from related parties were of finished and semi-finished leather and whereas, the purchases from unrelated concerns were of raw leather. Moreover, the types and quality of skin purchased were also different. Ignoring all these aspects, the Assessing Officer concluded that price paid to related concerns was unreasonable and excessive. The assessee has submitted the following table of comparison of rates at which various items were purchased from related parties and unrelated parties: 1. EI Goat Skins (Refer Annexure 2) Party Price Range (Rs.. Per sq.ft.) M/s. Prakash Overseas (related party) Rs..30.50 per sq.ft. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Naplan (Refer Annexure 7) Party Price Range (Rs.. Per dcm) M/s. Prakash Overseas (related party) Rs..6.00 per dcm M/s. Caprine Exports (unrelated party) Rs..6.15 per dcm M/s. Sri Balaji Exports (unrelated party) Rs..6.45 per dcm 7. Sheep Pickle Skin (Refer Annexure 8) Party Price Range (Rs.. Per pc) M/s. Chamundi Leathers (related party) Rs..208 per pc to Rs. 272/- per pc. M/s. Pakbod Co. Ltd. (unrelated party) Rs..276 per pc 8. Goat Finished Leather (Refer Annexure 9) Party Price Range (Rs.. Per pc) M/s. Prakash Overseas (related party) Rs..40.00 per pc to Rs..50.00 per pc. M/s. Opell Leathers (unrelated party) Rs..50.00 per pc. M/s. Lea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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