COMMISSIONER OF INCOME TAX-I Vs. JYOTI INDUSTRIES

JUDGEMENT

(1.) 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 I.T.A. No.484/CHD/2009 for the assessment year 2005-06, proposing following substantial questions of law:-

(2.) The assessee is a manufacturer of alloys/non-alloys steel ingots and is also engaged in trading of scrap. In the course of assessment, the assessee claimed loss in manufacture of steel ingots. The assessee made purchases of raw material from its sister concern at rates higher than the market rates. Similarly, sale of finished goods were made at rates lower than the market rate. The Special Auditor stated that the assessee adopted estimated cost method of valuation and on that basis, the Assessing Officer made addition, invoking Section 40A(2)(b) of the Act, alleging under-valuation of the scrap. On appeal, the addition was set aside with the observation that explanation of the assessee that rates paid to the sister concern were comparable to the market, as shown in the Bulletin of Steel Town (weekly).

(3.) On further appeal, the Tribunal affirmed the above findings.