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TMI Blog2012 (2) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... common order of the Income-tax Appellate Tribunal, Additional Bench, Chennai, dated August 10, 2000 in I. T. A. Nos. 226 and 227 of 2000 respectively. Tax Case (Revision) No. 1023 of 2006 relates to the assessment year 1993-94 and the Tax Case (Revision) No. 1041 of 2006 relates to the assessment year 1994-95. These revisions were admitted on the following substantial question of law: Whether in the facts and circumstances, the Tribunal is right in holding that there is no under invoicing under section 12A of the Tamil Nadu General Sales Tax Act in respect of sales made to the sister concern of the assessee? The respondent-assessee Tvl. Safari Industries (India) Limited are dealers in suitcases and briefcases and they have reported a total and taxable turnover of ₹ 1,61,49,148 for the year 1993-94 and ₹ 1,94,78,389 for the year 1994-95. Their accounts were called and checked. The place of business at Chennai was inspected by the Enforcement Wing officers on February 28, 1996 and the officers had ascertained that the assessee are the manufacturers of suitcases, briefcases, etc., having factory at Gujarat and have 17 branches all over India. It was also fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12A. Assessment of sales shown in accounts at low prices. (1) If the assessing authority is satisfied that a dealer has, with a view to evade the payment of tax, shown in his accounts sales or purchases of any goods, at prices which are abnormally low compared to the prevailing market price of such goods, it may at any time within a period of five years from the expiry of the year to which the tax relates, assess or reassess the dealer to the best of its judgment on the turnover of such sales or purchases after making such enquiry as it may consider necessary and after giving the dealer a reasonable opportunity to show-cause against such assessment. (2) The provisions of sub-sections (2) to (5) of section 16, shall as far as may be, apply to assessment or reassessment under sub-section (1) as they apply to the reassessment of escaped turnover under subsection (1) of section 16. R. 18C. In making an assessment under section 12A, the assessing authority shall take into account such of the following factors as may be relevant to the determination of the prevailing market price of the goods, namely, (i) the prices charged by other dealers at the relevant stage of sale of sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ensual price of the transactions. As already pointed out, it is intended to prevent the evasion of payment of tax and for that purpose it empowers the assessing authorities to compare the price mentioned in the accounts relating to sale or purchase of goods as stated in the return submitted with the prevailing market price of such goods, and to make best of judgment assessment on the turnover, after such enquiry as the assessing authority may consider necessary, that too, after giving a reasonable opportunity to the dealer to show cause against such assessment. It may be pointed out that sub-section (2) of section 12A of the Act specifically makes the provisions contained in sub-sections (2) to (5) of section 16 applicable to assessment or reassessment proceedings under section 12A(1), as they apply to reassessment of escaped turnover under section 16(1) of the Act. The only distinction between section 16 and section 12A of the Act is that whereas section 16 of the Act relates to escaped turnovers which has/have not been accounted for and section 12A of the Act deals with the turnovers, which have been accounted for but enables the assessing authorities to determine whether the pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons being followed by the assessing officer. Rule 18C also is a mechanism, which the assessing officer has to follow. In order to apply the above provisions of section 12A and rule 18C, the burden, as to satisfaction, is on the assessing authority, supported by relevant materials. In fact, rule 18C(iv) empowers the assessing authority, in case the differential price charged on the sale against bulk orders exclusive of the sales tax element, is more than 15 per cent, (i) to examine the reasons for the variation; (ii) while examining the other reasons for variation, he shall take into account the relationship of the parties to the transaction; and (iii) the charges for after sales services, packaging, transport and other expenses incurred by the subsequent sellers which add to the cost of the goods at each stage of sale by successive dealers. The assessing officer is also bound to further examine, whether there is such difference in the price charged on the sales of the same goods to different customers and whether the goods are made available to all distributors or other customers in unlimited quantities and at the same prices. Only after satisfying himself of the above details, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assistant Appellate Commissioner could not be sustained. However, this leads us to the next question that by virtue of such finding, the Tribunal could allow the appeals in whole without either independently considering the objections raised by the assessee and find out whether the provisions of section 12A read with rule 18C can be applied or not or whether it could have remitted the matters to the assessing officer. The assessment years being 1993-94 and 1994-95, we are not inclined to remit the matters again to the Tribunal for such consideration. In the objections dated July 21, 1997, it is the specific case of the assessee that the wholesale buyers of Safari Industries (India) Limited are separate, identifiable, distinct, legal entities, carrying on business on their own account, one not controlling the other, particularly the goods have been sold by the assessee in the case to M/s. Sanghvi Enterprises, Coimbatore on identical terms and at the same price as applicable to Safari Sales Limited. In terms of section 18C, the assessing officer ought to have considered the above question as to whether the assessee had sold the goods to M/s. Sanghvi Enterprises, Coimbatore, o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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