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TMI Blog2015 (7) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... - Held that:- No material to record finding that market price of baggasse was ₹ 18/- throughout the year in the relevant financial year, to hold that the agreement between the appellant and M/s U.P. Straw & Agro Products Ltd. was not a genuine transaction. The agreement was not between the parties before the accounting year to ensure continuous supply of bagasses to sister concern. Any interruption in supply could have affected the manufacturing process of the purchaser company. The rates of sale given by the A.O. ranged between ₹ 12.41 to ₹ 18/- per qtl. in the financial year 1987-88. The bagasse is a byproduct of which prices fluctuate during the year. If there was agreement to the sister concern for bulk supply, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by Shri Suyash Agrawal appears for the respondent. This appeal arises out of order of the Income Tax Appellate Tribunal dated 31.8.2000 passed by the Income Tax Appellate Tribunal in ITA No.524/Del/92 relating to Assessment Year 1988-89. By order dated 22.7.2009 the appeal was admitted on the question of law nos.1, 4 and 6, as framed in the memo of appeal. Our answers on these questions are as follows:- Question No.1:- Whether on the facts and in the circumstances of the case, the Tribunal was legally justified in upholding the order of CIT (A) who deleted the disallowance of interest not charged on debit balance? The issue has been discussed by the ITAT in paragraph 49 and 50 in which it has given reasons for upholding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been contended that the Ld. CIT (A) had erred in deleting the addition of ₹ 10,66,574/- made by the AO on account of estimated suppression of sales of bagasse to M/s U.P. Straw Agro Products Ltd. a sister concern of the assessee. The assessee sold bagasse to its sister concern at the rate of ₹ 10/- per qtl. The AO noted that certain sales to outside parties were made at higher rate. In view of the same he applied the rate of ₹ 18/- per qtl. in respect of sales made in November December, 1987 and at the rate of ₹ 12.50 per qtl. on sales made in other months. Accordingly, the addition of ₹ 10,56,574/- was made on account of alleged suppression of sales price. 53. Aggrieved the assessee preferred first ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations and prices of bagassse during the accounting period bagasse was supplied to M/s U.P. Straw Agro Products Ltd., at the rate agreed upon in the beginning of the year. He further added that bulk of the supply was made to M/s U.P. Straw Agro Products ltd. He further added that if some sales to other parties were made at higher rate, some sales to other parties were also made at rate lower than ₹ 10/- per qtl. which were the normal business variations which could not be made as basis for adverse conclusion. The Ld. CIT (A) pointed out names of seven parties to whom sales were made at rates lower than the rate of ₹ 10/- per qtl. which the AO had not taken into account while considering reasonableness of the rate of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was entered into prior to the accounting year at ₹ 10/- per qtl., it cannot be said that the agreement was not genuine or that price was fixed to suppress the turn over of sale and the resultant profits. The findings recorded by ITAT and the circumstances in which the rate of ₹ 10/- per qtl. was found to be reasonable are essentially findings of fact, which do not call for interference by the Court. The Tribunal being the final court of fact has considered all the circumstances in which agreement at rate which was lower than the fluctuating market rate. The question is decided in favour of the assessee and against the department. Question No.6:- Whether on the facts and in the circumstances of the case, the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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