TMI Blog1984 (6) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... 8?" 2.. The facts giving rise to this reference as per the statement of case received are as follows: The non-applicant, M/s. Rita Sales Corporation, Indore, are distributors for Rita sewing machines and electrical goods. The non-applicant was assessed to tax for the financial year 1975-76. Best judgment assessment was made and the gross turnover was determined as Rs. 8,40,000 against Rs. 8,03,809 shown in the books of account. Enhancement of Rs. 2,927 was made on account of certain discrepancies and the amount of Rs. 33,263 paid by the principals towards 50 per cent cost of timepieces sold by the non-applicant to the retail dealers at half price was also included in his turnover. The assessing authority observed that sale at 50 per cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. It cannot be called a cash discount because the respondent had received that money as consideration of the value of the goods. 5.. It is in these circumstances that the Tribunal has made this reference. 6.. The learned counsel for the department submitted that it is not disputed that the supply of these timepieces was part of the gift scheme introduced by the Rita sewing machine manufacturers. The actual purchase of timepieces was, however, made by the respondent who acted as distributor and the timepieces were sold by him to retail dealers at half price. The retail dealers were required to supply them free to each customer buying a Rita sewing machine. On these facts, it was submitted, that thus there being an agreement between the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State of Madras v. Gannon Dunkerley Co. (Madras) Ltd.] by the Supreme Court. He further submitted that so far as the sale by the distributor to the retailer is concerned admittedly the retail dealer pays the same price which is agreed to between him and the dealer and, therefore, between the distributor and the retail dealer the sale of goods is complete at the price agreed between them and consequently in the present case the price at which the distributor has sold the timepieces to the retail dealer will be deemed to be the sale price irrespective of the fact whether it is sold by him at 50 per cent of its cost price. In that transaction the manufacturer himself does not come in. He further submitted that it is not the case of the depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich the manufacturer had introduced the gift scheme, according to which the distributor, i.e., the respondent, had to purchase the timepieces at its cost price and it is he who in turn while selling the machine was also selling the timepiece at half price to the retailer who used to purchase the same from the distributor. Therefore, vis-a-vis, the distributor and retailer, the sale was complete at the price to which they had agreed and consequently even though the manufacturer had promised to pay the 50 per cent price of the timepieces to the distributor, it would not mean that the distributor has sold the timepieces to the retailer at this full price because he receives the entire amount partly from the retail dealer and partly from the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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