9911796707
TMI Blog1988 (9) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... or this conclusion he has relied upon the following facts :-- (i) The sale was to another company in the same group. (ii) It had taken place just three days before the close of the accounting year. (iii) The buyer sold the silver to its subsidiary company and the surplus was claimed as exempt u/s. 47(iv) by the buyer. In the case of the assessee Darshita this last fact i.e. the sale to a subsidiary is absent. The Commissioner has allowed the assessee's appeals observing that "the order passed by the Income-tax Officer can at best suggest a suspicion about the alleged tainted nature of the transaction. However, no facts had been brought on record to establish that this was a collusive sale. On the contrary the Income-tax Officer has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e silver was not treated as an asset of the assessee-company by the Department for wealth-tax purposes for the subsequent assessment years, (7) the silver was sold because the markets were failing and this was the commercial consideration i.e. to save further loss, (8) the claim to exemption u/s. 47(iv) was not rejected so far and in any case that subsequent sale by the purchaser and the claim to exemption had nothing to do with the assessee's claim, and (9) regarding the revenue's emphasis on the fact that the sales had taken place only 3 days before the close of the accounting period the assessee's counsel pointed out that there was no motive to evade tax because the incomes were very low, i.e. Rs. 9,443, Rs. 743 and Rs. 933 in the cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edent for deciding this case. The learned Departmental Representative rejoined that the Supreme Court in the case of Kartikeya V. Sarabhai v. CIT [1985] 156 ITR 509/23 Taxman 1400 had laid down that the Income-tax Officer was entitled to look into all the facts and circumstances in order to decide the question whether a certain transaction was a ruse or device to avoid tax. 4. We find here that (i) the sellers and the purchasers of the silver are two distinct entities, (ii) it is not disputed that the sales were at the market rate, and (iii) it is not disputed that at the time when the sales took place the market prices were falling. In view of this, first of all it must be said that the sales were real and effective resulting in the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th them. The liability of the appellant which arose under the statute could not become the liability of someone else merely by an agreement with that person. In other words, a false colour was given to the facts. It was in that context that the word 'device' had been used. That is not the situation here. As stated above, the property in silver has passed to the buyer and the sale is genuine. Therefore, the said decision of the Supreme Court in McDowell Co. Ltd.'s case has no application, here. In the case of a device the attempt is to avoid tax without suffering any disadvantage. To put it plainly, it is an attempt to get something for nothing. But that is not so in an honest attempt to save tax. For example, no one would say that an inve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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