TMI Blog1996 (5) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... uestions mentioned in the petition for opinion of this court. Facts in short may be stated as follows : The assessee, Assam Frontier Tea Ltd. and the assessment involved in this present case relates to the year 1987-88. The assessee entered into a forward contract with another company Apeejay Pvt. Ltd., to sell tea of different quantities at various rates pursuant to an agreement entered into by and between the assessee-company and Apeejay Pvt. Ltd. on November 1, 1985. This agreement was in the form of a letter issued by the director, the assessee-company, to Apeejay Pvt. Ltd. As per the said agreement, the assessee-company agreed to sell 16,30,000 kgs, of tea comprising the production of various tea gardens of the assessee-company, na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income-tax Act, 1961, was filed by the Revenue with a request to draw up a statement of the case and to refer the following questions for opinion of this court : " (1) Whether, on the facts and in the circumstances of the case, the findings of the Tribunal that the transactions between the assessee and the Apeejay Pvt. Ltd. cannot be said to be not bona fide is based on relevant consideration and whether the decision based on such consideration is not tenable in law ? (2) Whether, on the facts and in the circumstances of the case, the transactions between the assessee and the Apeejay Pvt. Ltd. based on the agreement dated November 1, 1985, is not a sham transaction, and whether such agreement is not a colourable device used for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Actual transfer of goods from the assessee-company to allied company did not take place. (iii) Tea was sent to the warehouse in the name of the assessee-company. " Mr. Joshi, learned standing counsel for the Revenue, submits that there was non-consideration of materials and, therefore, it is a question of law. Dr. A. K. Saraf, learned counsel for the assessee, on the other hand, fairly concedes that non-consideration of the relevant materials may give rise to a question of law. However, this court before giving a direction must be prima facie satisfied that there was really some non-consideration of the material facts. This court may not give a direction without being satisfied about the existence of such grounds, namely, non-consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed standing counsel appearing on behalf of the Revenue, has drawn our attention to paragraphs 4(1) and 4(2) of the judgment where the submission made by the learned Senior Departmental Representative is reflected. Mr. Joshi has also drawn our attention to sub-paragraph (3) of paragraph 4 of the judgment wherein the Tribunal noted that the Assessing Officer made an addition of Rs. 34,80,707 on the ground that the actual transfer of tea from the assessee-company to the allied company did not take place. Tea was sent to the warehouse in the name of the assessee. As per the agreement invoices of tea were supposed to be sent to the buyers but the tea continued to remain in the warehouse, was thereafter straightaway sold by the brokers. According ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the point of view of its taxability or non-taxability and not to any incidental facts connected with it. In this connection, he drew our attention to the decision of the apex court in CIT v. Rai Bahadur Hardutroy Motilal Chamaria [1967] 66 ITR 443, wherein the apex court held that "consideration" does not mean "incidental" or "collateral" examination of any matter by the Income-tax Officer in the process of assessment. There must be something in the assessment order to show that the Income-tax Officer applied his mind to the particular subject matter or the particular source of income with a view to its taxability or to its non-taxability and not to any incidental connection". Dr. Saraf relying upon the aforesaid decision has urged befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll defer payment to the next year. To this, Dr. Saraf has drawn our attention to a decision of the Rajasthan High Court in CIT v. Shri Prithvi Raj Daga [1986] 159 ITR 193. In the said decision, the Rajasthan High Court held that (headnote) : "the question whether the sale of immovable property is genuine or a colourable transaction is a question of fact and no question of law would arise from the decision of the Tribunal on this question". Dr. Saraf has also relied upon a decision of the Allahabad High Court in the case of CIT v. Govind Narain [1975] 101 ITR 602, wherein the Allahabad High Court dealing with a similar question, held that (headnote) : " the finding that the deed was genuine and not sham was a finding of fact and the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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