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Sec. 40A(2) of the IT Act is applicable in case of a revenue expenditure claim involving payments made to related parties

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Court :
ITAT Hyderabad

Brief :
These assessee’s five appeals arise against the CIT(A)-5 Hyderabad’s common order dated 31.8.2016 passed in case nos.384/2014-15, 635/2014-15 and 665/2014-15 [ for AYs 2010-11, 2011-12 & 2012-13] and order dated 20.6.2017 in case nos.39/2016-17 , 0335/2016-17 [for A.Y. 2013-14 and 2014-15] respectively; involving proceedings u/s 143(3) of the Income Tax Act, 1961 [in short ‘the Act’]. Heard both the parties. Case files perused.

Citation :
ITA No. 549/Hyd./2018

IN THE INCOME TAX APPELLATE TRIBUNAL
 HYDERABAD ‘B’ BENCH : Hyderabad

(Through Video Conference)

Before Shri S.S. GODARA, Judicial Member
and
Shri L.P. SAHU, Accountant Member

ITA Nos. 1502 to 1504/Hyd./2016
Assessment Years : 2010-11 to 2012-13

ITA No. 1496/Hyd./2017
Assessment Year : 2013-14

ITA No. 549/Hyd./2018
Assessment Year : 2014-15

M/s Yeturu Bio Tech Limited 
Hyderabad.
[PAN: AAACY0850F]
(Appellant) 

vs. 

Dy.CIT, Circle 3(3)
Hyderabad [Presently ITO, Ward 17(4)]
(Respondent)


 For Appellant: Sri A.V Raghu Ram, Adv.
 For Respondent : Shri Rohit Mujumdar, DR
 Smt. M. Narmada, DR [in ITA 549/Hyd/2018]

 Date of Hearing : 17/06/2021
21/06/2021 [ITA 549/Hyd/2018]

Date of Pronouncement : 12/07/2021

O R D E R

PER S.S. GODARA, J.M.

These assessee’s five appeals arise against the CIT(A)-5 Hyderabad’s common order dated 31.8.2016 passed in case nos.384/2014-15, 635/2014-15 and 665/2014-15 [ for AYs 2010-11, 2011-12 & 2012-13] and order dated 20.6.2017 in case nos.39/2016-17 , 0335/2016-17 [for A.Y. 2013-14 and 2014-15] respectively; involving proceedings u/s 143(3) of the Income Tax Act, 1961 [in short ‘the Act’]. Heard both the parties. Case files perused.

2. We notice at the outset that the assessee’s identical sole substantive ground raised in all these appeals challenges correctness of both the lower authorities’ action invoking sec.40A(2) disallowance(s) of Rs.64,99,316/-, 98,94,950/-, 1,77,94,075/- and 71,05,647/- and 53,23,184/-; Assessment year wise respectively pertaining to its purchase price(s) paid to the related parties/directors involving “aloe vera leaves” for the purpose of manufacturing aloe vera products in various segments.

3. We have given our thoughtful consideration to rival contentions against and in support of the impugned disallowance. A perusal of these case file suggests that the assessee had claimed the corresponding purchase price(s) @ Rs.10/- per kg whereas the learned lower authorities; and more particularly the CIT(A), has taken it @ Rs.5/- per kg in the former common order and @ Rs.6/- in the latter ones (supra); respectively.

4. Ld.DR invited our attention to CIT(A)’s order in para 6.7 page 10 that the Assessing Officer had duly found a comparable case i.e. M/s Biomax Life Sciences Ltd. having purchased aloe vera leaves at an average price of Rs. 3.50 paise per kg in Ongole, Ananthapur, Chowtuppal and Vinukonda of Guntur district ( in the undivided state of Andhra Pradesh). His case therefore is that the assessee has already been granted sufficient relief in estimating aloe vera rates (supra) respectively.

To know more in details find the attachment file

 

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on 24 July 2021
Published in Income Tax
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