searching for case law in income tax

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srilakshmi.g (Querist)
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10 August 2008 There is a SC(CCE V Guru Nanak Refrigeration Corporation) decision in Central Excise stating that 'arms length price can fall below cost of production '.
In Guru Nanak Refrigeration corporation V CCE-(1996)81ELT290(CEGAT 3 member bench )
its held that -if price is the sole consideration and if dealings between assessee and buyer are at arms length, assessable value will be decided on the basis of selling price ,even if its below manufacturing cost.

I want to know whether there is similar case law in Income Tax to prove that price is at arm's length even if its below cost of production.That is price below cost is not the sole criteria for determining arms length price.

Arbind Aggarwal

Arbind Aggarwal (Expert)
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27 August 2008 Price should be the
'sole consideration for sale", sale should not to a related person as defined in the act, then the price will be taken as final even if it is below cost, cost is not a critaria for deciding sale price both are different for taxation purpose.

It is a business conviction to sale at cost plus.

arbindaggarwal@yahoo.com

srilakshmi.g

srilakshmi.g (Querist)
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29 August 2008 hai Mr.Arbind,
is there any case law in income tax to give as supporting evidence to prove that price is at arms length even if its below cost?

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