COMMISSIONER OF INCOME TAX Vs. KOOTTUMMAL GROUPS

JUDGEMENT

(1.) This appeal is filed by the Commissioner of Income Tax aggrieved by the order passed by the Income Tax Appellate Tribunal in an appeal filed by the respondent.

(2.) In relation to the assessment year 2007-08, respondent had effected total purchase of Rs. 2,31,689,032/- from M/s. Reliance Communication against cash payment. In Annexure A assessment order, applying the provisions of Section 40A(3) of Income Tax Act, 1961, the expenditure claimed was disallowed. In an appeal filed by the assessee before the Commissioner of Income Tax, the assessment order was confirmed. Assessee went in appeal before the Tribunal, which, by Annexure C order, allowed the appeal and held that the relationship between the assessee and M/s. Reliance Communication was that of agent and principal and therefore, Section 40A(3) of the Income Tax Act was inapplicable. It is this order which is under challenge before us at the instance of the Revenue.

(3.) We heard the learned standing counsel for the Revenue and the learned counsel appearing for the assessee.