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TMI Blog1988 (9) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... nother 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 under 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 ITO 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 ITO has found that the sale price of the silver was at market rate. Therefore, it cannot be held that this was a bogu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equent asst. yrs., (7) the silver was sold because the markets were falling and this was the commercial consideration, i.e., to save further loss, (8) the claim to exemption under 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 of the assessees Glacier, Darshita and Garnet respectively. Finally, he relied upon the lates decision of the Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he in the case of Kartikeya V. Sarabhai vs. CIT (1985) 49 CTR (SC) 172 : (1985) 156 ITR 509 (SC) had laid down that the ITO 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 entitles, (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 property in the goods passing from the seller to the buyer. The learned Departmental Representative wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 pased to the buyer and the sale in genuine. Therefore, the said decision of the Supreme Court in McDowell's case has no application here. In the case of 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 investment in National Savings Certificates even on the last day of the accounting period to get a deduction from the income is a device or a ruse. In such a case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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