TMI Blog2003 (6) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... in favour of the Revenue and against the assessee. - - - - - Dated:- 14-6-2003 - Judge(s) : A. R. DAVE., A. M. KAPADIA. JUDGMENT The judgment of the court was delivered by A.R. DAVE J.-At the instance of the assessee, the following question has been referred to this court for its opinion by the Income-tax Appellate Tribunal, Ahmedabad Bench "C", under the provisions of section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"): "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in finding that tax was avoided without ascertaining whether there is any revenue loss on account of non-inclusion of the income in question in the assessee's assessment and its inclusion in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties and the transactions, which had taken place between the assessee and its sister concerns, were practically paper transactions. It was also found by the Assessing Officer that the assessee used to prepare a bill for goods sold in the name of the sister concerns and simultaneously the sister concerns would prepare their own bills so as to sell the goods to third parties at a higher price. The Assessing Officer also found that except one sister concern, namely, M/s. Patel Laboratory Finishers, all other sister concerns were manufacturing concerns not connected with any other trading activity. The Assessing Officer found that huge amount of profit had been diverted by the assessee to the sister concerns by having the aforestated modus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercial transaction had taken place between the assessee and the sister concerns. Coming to the conclusion that the transactions entered into between the assessee and the sister concerns were bogus and were only with an oblique motive to avoid payment of tax by the assessee, the Assessing Officer informed the aforestated facts to the assessee and asked the assessee as to how the sister concerns immediately sold the goods purchased by them from the assessee to third parties and in the same lot/quantity. The assessee was also asked for details with regard to the delivery slips issued by the assessee and whether delivery was being made directly to the third parties or to the sister concerns. The assessee was also informed that the partners of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax was avoided without ascertaining whether there was any loss to the Revenue on account of the aforestated transaction. Looking to the facts of the case, especially when the Tribunal has confirmed the fact that the assessee had entered into sham and bogus transactions with its sister concerns with oblique motive, this court has to examine whether the Tribunal was right in law in coming to the conclusion whether the assessee had avoided payment of tax. The learned advocate, Shri J.P. Shah, appearing for the assessee, has submitted that in the instant case the Tribunal has not considered that the amount of tax, which is alleged to have been avoided by the assessee, has already been paid by the sister concerns of the assessee. According ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted by him that it is not the case of the assessee that the findings arrived at by the Tribunal are perverse. In the circumstances, it has been submitted by him that on the basis of the findings recorded by the Tribunal, one can come to a conclusion that the assessee had avoided payment of tax. It has been further submitted by senior standing counsel that once the Revenue comes to a conclusion that the payment of tax had been avoided by the assessee, it is not for the Revenue to consider as to who paid the tax, or because of avoidance on the part of the assessee, whether any other person has paid the tax and it is also not necessary for the Revenue to look at the overall effect of avoidance of tax. It has been, therefore, submitted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax was paid by the sister concerns. We are also of the view that it was not necessary for the Revenue to look at the overall effect with regard to receipt of tax by the Revenue before corning to the conclusion whether payment of tax was avoided by the assessee. Thus, in our opinion, the Tribunal was right when it carne to the conclusion that tax was avoided and for corning to the said conclusion it was not necessary for the Tribunal to ascertain whether any loss was caused to the Revenue on account of non-inclusion of income in question in the assessee's assessment and its inclusion in the assessment of the sister concerns. Looking to the peculiar facts of the case, we answer the question in the affirmative, that is, in favour of the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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