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TMI Blog2019 (4) TMI 402X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered opinion, is not permitted under the revisionary proceedings u/s 263. See GABRIEL INDIA LIMITED [1993 (4) TMI 55 - BOMBAY HIGH COURT] - Decided in favour of assessee. - ITA No.4804/Mum/2011 - - - Dated:- 9-1-2019 - Shri M. Balaganesh, AM And Shri Ram Lal Negi, JM Appellant by: Ms. Samjukta Chowdhury Respondent by: Shri B.B. Rajendra Prasad [CIT-DR] ORDER Per M. Balaganesh (AM) : This appeal is directed against the order passed by the learned Commissioner of Income-tax, Central-III, (in short `the ld.CIT ) u/s 263 of the Income-tax Act, 1961 (hereinafter referred to as `the Act ) dated 29.03.2010, setting aside the order passed by the learned Assistant Commissioner of Income-tax, Central Circle 35, Mumbai (in short `the ld.AO ) u/s 143(3) of the Act dated 28.12.2007 for the assessment year 2005-2006. 2. Though the assesse has raised various grounds, the only effective issue to be decided is whether the ld.CIT was justified in invoking the revisionary jurisdiction u/s 263 of the Act in the facts and circumstances of the case. 3. The brief facts of this issue are that the assesse is a private limited company engaged in the business of st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Bhuwalka Steel Industries Ltd and M/s.R.S.Industries (Rolling Mills Ltd.) are the sister concern of ours on the ground of common directors is totally wrong. (iv) During the year under consideration, the major job work for us was done by M/s Eagle Steel and M/s Vinar Ispat. The said job work was awarded to the parties taking into consideration the geographical proximity of both these units. (v) A comparison chart showing the conversion chart paid to the parties enclosed herewith shows that the job work charges paid by us to Eagle Steel was lowest. (vi) The conversion charges are decided as per `conversion agreement entered between the parties, which also decide the burning loss provided to the customers. The said `conversion agreement is enclosed herewith. (vii) The said matters in the appeals too have been decided for AY 2006-07. A copy of the CIT(A) order is enclosed herewith and the Department has not referred any second appeal against the CIT(A) order. 5. The ld.CIT concluded that the assessee has paid higher prices for the goods and services to its sister concern over the fair market value and hence the same requires to be disallowed u/s 40A(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reating the order of the ld.AO u/s 143(3) of the Act dated 28.12.2007 as erroneous and prejudicial to the interest of the revenue. The ld.CIT also directed the ld.AO to examine in detail as to whether the assessee had made payments to persons specified u/s 40A(2)(a) of the Act, other than M/s Eagle Steel and M/s Maharashtra Power Transmission Structures Pvt. Ltd. and also to examine whether any excessive or unreasonable payments were made by the assessee to those parties warranting disallowance u/s 40A(2)(a) of the Act. With these observations, the assessment order was set aside by the ld.CIT. Aggrieved, the assessee is in appeal before us. 8. We have heard the rival submissions. At the outset, the learned AR stated that the assessee had duly furnished the entire details of conversion charges and job work charges before the ld.AO in response to specific queries raised by the ld.AO u/s 142(1) of the Act during the course of assessment proceedings. The copy of the reply filed by the assessee in this regard is enclosed in pages 1 and 2 of the paper book. The relevant portion of which is reproduced hereunder for the sake of convenience. During the year under assessment, we have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CHARGES PAID DURING THE YEAR 2004-2005 Name Address Job work Qty Wastage Amount Conversion paid Rs./PMT Raw material burning loss Total cost (conversion + RM Cost) Eagle Steels C-24, MIDC, Taloja Dist. Raigad Angle 16038.578 9% 31,321,234.00 1953 1884 3837 Vinar Ispat Ltd. 201 Steel Chamber, Wardhman Nagar, Nagpur Angle 5539.225 10% 10,039,005.00 1813 2094 3907 R.S. Industries Ltd. A-241/242(B), Road No.6D Angle 804.560 9% 1,726,190.00 2146 1884 4030 Bhuwalka Steesl Ind. Ltd. 204, Village Khupri Wada Dist. Thane Angle 2446.480 9% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 1,246,675.00 Sanvijay Rolling Engg. Works 9, Immambada Road, Nagpur 966.00 1,738,800.00 Kalpataru Power Transmkission 101, Part-111, GIDC Sector 28, Gandhinagar. 1328.21 3,004,730.00 13,692,463.00 9. The aforesaid details submitted by the learned AR goes to prove clearly that the aspect of payment of conversion charges and job charges by the assessee to various parties including the related parties as specified u/s 40A(2)(a) of the Act together with the respective rate per MT paid to each of those parties thereon were thoroughly examined by the ld.AO in the course of assessment proceedings itself. The ld.AO, after examination of those factual details submitted by the assessee with corresponding evidences thereon, had arrived at a conscious conclusion that no disallowance u/s 40A(2)(a) of the Act was warranted in the facts and circumstances of the case while completing the assessment. We find that the ld.CIT had only tried to substitute his ..... X X X X Extracts X X X X X X X X Extracts X X X X
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