Law:

Section:

Section 40A(2) of the Income-tax Act, 1961 - Business disallowance - Excessive or unreasonable payments - Assessment year 2005-06 - Assessee was a manufacturer of alloys/non-alloys steel ingots and was also engaged in trading of scrap - In course of assessment, it claimed loss in manufacture of steel ingots - Assessing Officer noted that assessee had made purchases of raw material from its sister concern at rates higher than market rates - Similarly, sale of finished goods was made at rates lower than market rates - On aforesaid basis Assessing Officer made an addition by invoking section 40A(2)(b), alleging undervaluation of scrap - On appeal, Commissioner (Appeals) set aside addition holding that explanation of assessee that rates paid to sister concern were comparable to market rates, as shown in Bulletin of Steel Town (weekly), was correct - Tribunal upheld order of Commissioner (Appeals) - Whether since finding recorded concurrently by Commissioner (Appeals) as well as Tribunal as to genuineness of transaction between sister concerns was a finding of fact which was not shown to be perverse, impugned order passed by authorities below was to be upheld - Held, yes Rajesh Katock for the Appellant. JUDGMENT Adarsh Kumar Goel, J. - The revenue has preferred this appeal under section 260A of the Income-tax Act, 1961 (for short, "the Act") against order of the Income-tax Appellate Tribunal, Chandigarh dated 19-11-2009 in ITA No. 484/CHD./2009 for the assessment year 2005-06, proposing following substantial questions of law :- "(1) Whether on the facts and circumstances of the case, the Hon'ble Income-tax Appellate Tribunal is justified in law in upholding the decision of learned CIT(A) in deleting the addition of Rs. 6,18,910 made by the Assessing Officer on account of purchases made from its sister concern being specified person under section 40A(2)(b) of the Income-tax Act, 1961 on the rates higher than the market rate. (2) Whether on the facts and circumstances of the case, the Hon'ble Income-tax Appellate Tribunal is justified in law in upholding the decision of learned CIT(A) in deleting the addition of Rs. 51,35,244 made by the Assessing Officer on account…

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