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TMI Blog2014 (4) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... h the finance company for bill discounting - Beyond that, the agreement with the finance company could be taken in as the basis for deciding whether at all there was any transaction of purchase or sale between the parties. The assessee does not deny the fact they had issued invoices in the name of the assessee herein in respect of the sale of dressed skins - The question as to whether there had been a taxable sale or not must be looked at from the facts other than the bill discounting transaction and the purchase ledger extract – This does not supply the necessary proof that the assessee had no transaction at all except as a paper transaction - When the assessee was confronted with the documents, the proper course for the assessee was to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alid materials to hold that there is no transfer of property when admittedly there are evidences to prove their existence in form bills of exchange which were not shown in accounts? 2. Whether on the facts and circumstances of the case, the Appellate Tribunal erred in law in brushing aside the existence of bills of exchange as mere negotiable instrument to draw money from the financier rather than holding that these bill of exchange are also documents of title to goods and form a valuable consideration in the transaction involving the dealer and the goods as per the guidance issued by R.B.I.? 2. The assessment years under consideration are 1994-95 and 1995-96 respectively. A reading of the orders of the Authorities below shows that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s.C.K.Sons Shoes - the assessee herein and they had returned the invoice at the request of the customer. In the circumstances, they could not produce the further invoices. The assessee pointed out that they had manufactured shoe uppers, which are exported; since for the business they needed funds, they approached the finance companies; that by discounting the bills, they received finance. Hence, the transactions which are passed through the finance companies were not, in fact, sales transactions, assessable under the provisions of the Act. The Assessing Officer rejected the said submission and pointed out that on verification of the Bills of Exchange (Hundi) drawn by the seller - M/s.Golden Leathers in favour of the dealer, tendered fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial transactions which had been properly accounted for in M/s.Golden Leathers; the drawings had no relationship to the business transactions of the assessee with M/s.Golden Leathers; consequently, the assessment could not be upheld. In the circumstances, the assessment on this transaction was cancelled. However, the first Appellate Authority upheld the assessment on certain other turnover, with which we are not concerned in the present Tax Case (Revisions). 6. Aggrieved by this, the Revenue went on appeal before the Tamil Nadu Sales Tax Appellate Tribunal, which confirmed the order of the Appellate Assistant Commissioner. The Tribunal pointed out that Bills of Exchange was a recognised mode of transactions; it being an accommodation giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the financial transactions with M/s.Upasana Finance Limited or any other finance company would ultimately decide the character of the transaction between the purchaser and the seller. All the dealings that the finance company had, would show, would be the arrangement that the dealer had with the finance company for bill discounting. Beyond that, the agreement with the finance company, in no way, could be taken in as the basis for deciding whether at all there was any transaction of purchase or sale between the parties herein. The Tribunal pointed out that except the bills of exchange documents and the details of the amount drawn, there was nothing to show the sale or purchase, for the purpose of assessment. Even here, we differ from th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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