2010 (9) TMI 200

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..... payment of security, opening the Letter of Credit, incurring the other expenses including taxes, Central sales tax, State sales tax, etc. were to be borne by the assessee and the ultimate liability of the contract was also assumed by the MMTC - assessee who had taken over the contract and suffered the losses therein cannot be faulted – Appeal is Dismissed.
CORAM: HON'BLE MR. JUSTICE A.K. SIKRI HON'BLE MS. JUSTICE REVA KHETRAPAL Mr. Sanjeev Sabharwal, Advocate Mr. Ajay Vohra, Ms. Kavita Jha, Ms. Akansha Aggarwal and Mr. Somnath Shukla, Advocates A.K. SIKRI, J. (ORAL) 1. Notice in this appeal was issued limited to question No.(c) which pertains to allowing loss of Rs. 5.90 crores claimed on account of expenses/payment made by the asse .....

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..... /assessee suffered losses to the extent of Rs.5.90 crores, which was claimed as loss. The ITAT has allowed the same, as it found that the assessee could not realize the ideal price and because of this losses were suffered. Para 13 to 17 and 21 of the MoU are relevant for this purpose and are reproduced below:- "13. That on receipt of sale note from PPL, MMTC shall hold the title over the above material and thereafter MMTC shall dispose off the above material through their distributors in the concerned states as per the guidelines of the GOI/State Govt. 14. That it has been agreed upon between PPL and MMTC that the terms and conditions as prescribed in the tender format (as amended from time to time) by the DOF, Ministry of Chemicals & Fer .....

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..... e quantities handled at each port on ship to ship basis." 4. It is clear from the above that on the execution of the aforesaid MoU, it is the MMTC who assumed the entire responsibility for the execution of the said contract and for disposal of the stocks which were to be imported. Entire amount in that behalf right from beginning, i.e., from the stage of payment of security, opening the Letter of Credit, incurring the other expenses including taxes, Central sales tax, State sales tax, etc. were to be borne by the MMTC and the ultimate liability of the contract was also assumed by the MMTC. In these circumstances, the view taken by the ITAT that it is the assessee who had taken over the contract and suffered the losses therein cannot be fau .....

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