Excess sum paid to sister concern held allowable as both concerns were paying tax at same rate

Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of [Sister concern] - Assessee firm purchased finished goods from a sister concern at higher price which was of superior quality - Sister concern charged much higher rates from other entities to which it supplied similar finished goods - Sister concern was also paying tax on profit at same rate as paid by assessee and, thus, there could have been no incentive for sister concern to supply goods at a higher rate than market rate because it would go to increase its profits - Whether Commissioner (Appeals) and Tribunal were right in allowing excess payment so paid to sister concern - Held, yes [Paras 4 & 5] [In favour of assessee]

Refer:[2014] 42 taxmann.com 124 (Punjab & Haryana)
HIGH COURT OF PUNJAB AND HARYANA
Commissioner of Income-tax-I, Ludhiana
v.
Mansarover Impex