M/s Agarwal Global Steels Pvt Ltd., Secunderabad V. Deputy Commissioner of Income Tax, Circle-1(1), Hyderabad

MA 01/Hyd/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6215 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 16-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 28-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: U MINICHANDRAN
• Keywords: Avoidance of tax; Sham transactions
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER M.A. NO. 01/HYD/2018 (IN ITA NO. 674/HYD/2014 ASSESSMENT YEAR: 2009-10 ) AGARWAL GLOBAL STEELS (P) LTD., SECUNDERABAD. PAN AACCA 0516C VS. DY. COMMISSIONER OF INCOME- TAX, CIRCLE 1(1), HYD . (APPLICANT) (RESPONDENT) ASSESSEE BY : SHRI K.C. DEVDAS REVENUE BY : SMT. U. MINICHANDRAN DATE OF HEARING : 16/02/2018 DATE OF PRONOUNCEMENT : 16/03/2018 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS MISCELLANEOUS APPLICATION IS FILED BY THE AS SESSEE U/S 254(2) OF THE ACT WITH THE PLEA THAT THE ASSESSEE HAS PLAC ED THE FOLLOWING DOCUMENTS AND CASE LAW BEFORE THE ITAT, WHICH WERE NOT CONSIDERED WHILE PASSING THE ORDER IN ITA NO. 674/HYD/2014, DATED 29 /09/2017: SL.NO NATURE OF DOCUMENTS PAPER BOOK PAGES REMARKS 1 WRITTEN SUBMISSIONS BEFORE THE CIT(A)-II COMPRISING OF: I. COMPARATIVE STATEMENT OF PURCHASE MADE FROM AGARWAL STEEL; AND 1 36 TO 39 I. THESE SUBMISSIONS REPEAL THE VIEWS OF THE A.O AND CIT(A) ABOUT THE TRADING RESULTS. 2 M.A. NO. 01/HYD/2018 M/S AGARWAL GLOBAL STEELS (P) LTD. II. COMPARATIVE STATEMENT OF PURCHASE FROM AGARWAL STEEL AND SALES TO OTHERS; III. COP OF REBAR STEEL SALES IN MARCH 2009. IV. COPY OF STATEMENT OF SALES MADE TO GAUTAM ROLLING MILLS FROM 01.01.2009 TO 31.03.2009. 40 TO 45 46 TO 88 II. BOOKS OF ACCOUNTS MAINTAINED NOT BEEN REJECTED. III. ALL CASE LAWS REFERRED BY AO/CIT(A) WERE DISTINGUISHED. REASONS FOR FALL IN PROFIT EXPLAINED 2 LETTER OF 21.11.2011 TO SHOW HOW THE LOSS OF RS. 1,80,75,930/- WAS COMPUTED I 101 TO 102 TRANSACTIONS SUPPORTED BY INCOME AND LOSS EXPLAINED. 3 LETTER OF 07.12.2011 ABOUT SALES I 104 4 LETTER OF 26.12.2011 I 107 TO 109 5 ASSESSED ORDER FOR 2009- 10, 2012-13, STATEMENT OF GROSS PROFIT AND NET PROFIT RATIOS FOR LAST 5 YEARS. II 6. REASONS FOR LOWER PRICE SALE TO M/S GOUTHAM ROLLING MILLS (P) LTD. II 171 TO 173 7. ASSESSMENT ORDERS OF 2008-09 III 8 CASE LAWS OF CALCUTTA DISCOUNT CO., SRI RAMLINGA CHOODAMBIKA MILLS & CIV VS RAMAN & COMPANY TO SHOW THAT A SALE PRICE AGREED TO BY THE PARTIES CANNOT BE SUBSTITUTED UNLESS THERE IS CONTRARY EVIDENCE. III 215 TO 222 9. STATEMNT OF L.N. AGARWAL U/S 131 OF INCOME TAX ACT, 1961, DIRECTOR OF AGARWAL GLOBAL STEELS. IV 2 TO 4 10 BALANCE SHEET, PROFIT AND LOSS ACCOUNT, INCOME TAX RETURN OF AY 2009- 10 OF GOUTHAM ROLLING MILLS (P) LTD. IV 5 TO 9 3 M.A. NO. 01/HYD/2018 M/S AGARWAL GLOBAL STEELS (P) LTD. 11 LETTER OF GOUTHAM ROLLING MILLS GIVING DETAILS OF SALES, PARTY WISE SALES, PURCHASES DETAILS & CONFIRMATION LETTER OF GOUTHAM ROLLING MILLS (P) LTD. IV 10 TO 30 FURTHER, IT WAS ALSO SUBMITTED IN PARAS 10.2 & 10.3 OF THE M.A. AS UNDER: 10.2 IT WAS ALSO SUBMITTED THAT THE ENTIRE SALES TO GOUTHAM STEEL ROLLING MILLS AT RS. 25,000 PER MT WAS AS UNDER AND THEY WERE OUT OF PURCHASES MADE FROM PARTIES OTHER THAN THE SOLE PRO PRIETOR CONCERN OF L N AGARWAL. SL.NO PARTICULARS QUANTITY VALUE REMARKS 1 23/2/2009 TO 31/03/2009 (PURCHASES FROM PARTIES OTHER THAN APPELLANT) 2797.335 M/T 6,99,33,375/- PLS SEE PAGES 85 TO 87 OF P.B.I LESS QUANTITY SOLD DURING FEB 2009 685.315 1,71,32,875/- SALES OF MARCH 2009 2112.020 5,28,00,500/- ADD:- SALES TAX @ 4% 21,12,020/- TOTAL 5,49,12,520 /- 10.3 IT WAS BROUGHT TO THE NOTICE OF THE HOBLE IT AT THAT PURCHASE OF THE APPELLANT FROM SUPPLIERS OTHER THAN FROM L N AG ARWAL WAS 8229.075 MT AT RS. 24,31,92,711/-. THE AVERAGE RATE WORKED OUT TO RS. 29,552 PER MT. THE SALES TO GOUTHAM ROLLING MILLS (P) LTD WAS AT THE R ATE OF RS. 26,003/- PER MT (INCL. S.T) AND RS. 25000/- PER MT (BEFORE SALE TAX ). PLS SEE PAGE 88 OF P.B.I. THIS RATE WAS CONTRACTED AS IT WAS A BULK SUPPLY OF 3000 MT COMPARED TO SMALL QUANTITIES TO OTHERS. GOUTHAM ROLLING MILLS (P) LT D WAS CALLED UPON TO FURNISH THE COMPLETE DETAILS OF THE TRANSACTIONS THAT TOOK PLACE BETWEEN GOUTHAM ROLLING MILLS (P) LTD AND THE APPELLANT COMPANY VID E SUMMONS ISSUED ON 19/12/2011 AND FULL DETAILS WERE GIVEN BY GOUTHAM R OLLLING MILLS (P) LTD. THESE FIND A PLACE AT PAGES 9 TO 30 OF P.B.IV. 2. LD. AR RELIED ON THE DECISION OF THE HONBLE SUP REME COURT IN THE CASE OF CIT VS. A. RAMA AND CO, [1968] 67 ITR 11 AN D THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF PARAMANAND BUILDERS P. LTD. VS. 4 M.A. NO. 01/HYD/2018 M/S AGARWAL GLOBAL STEELS (P) LTD. CIT, [2017] 390 ITR 40 (BOM.) TO SUBMIT THAT THE TR IBUNAL IS DUTY BOUND IN LAW TO CONSIDER THE ALTERNATE PLEA RAISED BY THE AS SESSEE AT THE TIME OF HEARING OF THE APPEALS. 3. LD. DR SUBMITTED THAT THERE IS NO MISTAKE APPARE NT ON RECORD AS THE ITAT HAS ALREADY CONSIDERED ALL THE POINTS IN ITS O RDER. FURTHER, SHE SUBMITTED THAT THE CASE RELIED UPON BY THE LD. AR O F THE ASSESSEE IN THE CASE OF PARMANAND BUILDERS P. LTD. VS. CIT, [2017] 390 ITR 40 (BOM.) IS NOT RELEVANT FOR THIS CASE. FURTHER, SHE ALSO SUBMI TTED THAT THE RELIANCE PLACED BY THE LD. AR OF THE ASSESSEE ON THE DECISIO N OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. CALCUTTA DISCO UNT CO. LTD., [1973] 91 ITR 8 (SC) IS ALSO DISTINGUISHABLE ON FACTS. THEREF ORE, THERE IS NO MISTAKE APPARENT ON RECORD IN THE ORDER OF ITAT AND THE MA FILED BY THE ASSESSEE SHOULD NOT BE CONSIDERED. 4. CONSIDERED THE RIVAL SUBMISSIONS AND MATERIAL FA CTS ON RECORD. WE HAVE NOTICED THAT DURING THE COURSE OF ORIGINAL APP EAL PROCEEDINGS ON 11/07/2017, LD. AR OF THE ASSESSEE BROUGHT TO OUR N OTICE THE FOLLOWING INFORMATION, WHICH IS PLACED ON RECORD: 1. PURCHASE ORDER RECEIVED FROM GOUTHAM ROLLING MI LLS PVT. LTD., ON 31/10/2008 - PLACED AT PAGE 88 OF THE PB. 2. BALANCE SHEET, SUBMISSIONS OF GOUTHAM ROLLING MI LLS PVT. LTD., WHICH WERE SUBMITTED BEFORE THE AO RELATING TO PURC HASE AND SALES WERE PLACED ON RECORD, WHICH WERE ALREADY EXTRACTED BY THE AO IN HIS ORDER - PLACED AT PAGES 1 TO 10 OF PB-IV. 3. WRITTEN SUBMISSIONS, WHICH WERE FILED BEFORE THE CIT(A) PLACED AT PAGES 36 TO 57 OF PB I. 4. THE METHOD OF ACCOUNTING AND ASSESSMENT YEARS RE LATING TO 2008- 09, 2010-11 AND 2011-12 WERE PLACED ON RECORD TO IN DICATE THAT ASSESSEE IS FOLLOWING SAME METHOD OF ACCOUNT AND DE PARTMENT HAS ACCEPTED THE BOOKS OF ACCOUNT AND COMPLETED THE ASS ESSMENT TO INDICATE THAT THERE WAS NO SUCH ADJUSTMENTS WERE MA DE PAGES 144 TO 154 OF PB. AS REGARDS SL. NO. 2 ABOVE, THE SAME WERE EXTRACTS OF THE TYPE OF TRANSACTIONS WITH GOUTHAM ROLLING MILLS PVT. LTD. A ND PURCHASE ARRANGEMENT WITH ITS SUPPLIERS WERE ALREADY CONSIDE RED IN ITATS ORDER. AS REGARDS SL. NO. 4 ABOVE, ITAT HAD ALREADY CONSID ERED THIS ASPECT AND THERE IS NO DISPUTE THAT THE ASSESSEE IS FOLLOWING SAME METHOD OF 5 M.A. NO. 01/HYD/2018 M/S AGARWAL GLOBAL STEELS (P) LTD. ACCOUNTING AND DEPARTMENT HAS ACCEPTED THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE. 4.1 THE ISSUE IS NOT ABOUT THE METHOD OF ACCOUNTING OR BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE. IN THIS AY, THE QUESTIO N WAS UNUSUAL SWING OF FINANCIAL RESULTS IN THE 3 RD QUARTER, WHICH WAS OBSERVED BY THE AO. THEREFORE, THE GRIEVANCE OF THE ASSESSEE THAT THE S AID INFORMATIONS WERE NOT CONSIDERED BY THE ITAT, IS IRRELEVANT. 4.2 FINALLY, COMING TO THE CASE LAW RELIED UPON BY THE ASSESSEE TO SUBMIT THAT SALE PRICE AGREED TO BY THE PARTIES CAN NOT BE SUBSTITUTED UNLESS THERE IS CONTRARY EVIDENCE. FOR THIS PROPOSITION, A SSESSEE HAS HEAVILY RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE C ASE OF CIT VS. CALCUTTA DISCOUNT CO. LTD., (SUPRA) WHEREIN THE HONBLE SUPR EME COURT REFERRING TO THE DECISION OF MADRAS HIGH COURT IN THE CASE OF SR I RAMALINGA CHOODAMBIKAI MILLS LTD. CIT, HAS HELD AS UNDER: THE QUESTION THAT, WHEN AN ASSESSEE TRANSFERS SOME OF HIS STOCK-IN- TRADE TO ANOTHER PERSON AT A PRICE LESS THAN THE MA RKET PRICE, WHETHER THAT ASSESSEE CAN BE CONSIDERED TO HAVE MAD E ANY PROFIT MERELY BECAUSE HE HAS TRANSFERRED SOME OF HIS STOCK -IN-TRADE NOT AT THE MARKET PRICE BUT AT A LESSER PRICE, CAME UP FOR CONSIDERATION BEFORE THE HIGH COURT OF MADRAS IN SRI RAMALINGA CH OODAMBIKAI MILLS LTD. V. COMMISSIONER OF INCOME-TAX. THE FACT S OF THAT CASE AS SET OUT IN THE HEAD-NOTE ARE: A LIMITED COMPANY SOL D CERTAIN GOODS SHOWED IN ITS STOCK-IN-TRADE TO ITS MANAGING AGENCY FIRM AND TO ANOTHER FIRM IN WHICH ONE OF ITS DIRECTORS WAS INTE RESTED. THE SALES IN QUESTION WERE HELD TO BE BONAFIDE SALES. AT THE SAM E IT WAS HELD THAT THE GOODS WERE SOLD AT A CONCESSIONAL RATE. INCOME- TAX OFFICER SOUGHT TO TAX THE ASSESSEE THEREIN AFTER COMPUTING THE PROFITS EARNED BY THAT FIRM ON THE BASIS OF THE MARKET PRICE OF TH E GOODS SOLD AND NOT THE ACTUAL PRICE AT WHICH THOSE GOODS WERE SOLD . THE ASSESSEE CHALLENGED THE SAID BASIS. THE-'TRIBUNAL UPHELD THE CONTENTION OF THE ASSESSEE. IT CAME TO THE CONCLUSION THAT THE ASSESS EE HAD, IN REALITY, MADE NO PROFITS AT ALL. THE HIGH COURT AGREED WITH THE CONCLUSION REACHED BY THE TRIBUNAL. IT OPINED THAT, IN THE ABS ENCE OF ANY EVIDENCE TO SHOW EITHER THAT THE SALES WERE SHAM TR ANSACTIONS OR THAT THE MARKET PRICES WERE IN FACT PAID BY THE PUR CHASERS, THE MERE FACT THAT THE GOODS WERE SOLD AT A CONCESSIONAL RAT E TO BENEFIT THE PURCHASERS AT THE EXPENSE OF THE COMPANY WOULD NOT ENTITLE THE INCOME-TAX DEPARTMENT TO ASSESS THE DIFFERENCE BETW EEN THE MARKET PRICE AND THE PRICE PAID BY THE PURCHASERS, AS PROF ITS OF THE COMPANY. A SOMEWHAT SIMILAR QUESTION CAME UP FOR CONSIDERATI ON BEFORE THIS COURT IN COMMISSIONER OF INCOME-TAX V. A. RAMAN & C O.. IT IS 6 M.A. NO. 01/HYD/2018 M/S AGARWAL GLOBAL STEELS (P) LTD. UNNECESSARY TO SET OUT THE FACTS OF THAT CASE AND I T IS SUFFICIENT TO REFER TO THE RELEVANT OBSERVATIONS IN THE JUDGMENT. SHAH J. (AS HE THEN WAS), SPEAKING FOR THE COURT, STATED THE LAW A T PAGE 17 OF THE REPORT, THUS: ' THE PLEA RAISED BY THE INCOME-TAX OFFICER IS THAT INCOME WHICH COULD HAVE BEEN EARNED BY THE ASSESSEES WAS NOT EAR NED, AND A PART OF THAT INCOME WAS EARNED BY THE HINDU UNDIVID ED FAMILIES. THAT ACCORDING TO THE INCOMETAX OFFICER WAS BROUGHT ABOU T BY , A SUBTERFUGE OR CONTRIVANCE'. COUNSEL FOR THE COMMISS IONER CONTENDED THAT IF BY RESORTING TO A ' DEVICE OR CONTRIVANCE ' INCOME WHICH WOULD NORMALLY HAVE BEEN EARNED BY THE ASSESSEE IS DIVIDE D BETWEEN THE ASSESSEE AND ANOTHER PERSON, THE INCOME-TAX OFFICER WOULD BE ENTITLED TO BRING THE ENTIRE INCOME TO TAX AS IF IT HAD BEEN EARNED BY HIM. BUT THE LAW DOES NOT OBLIGE A TRADER TO MAKE T HE MAXIMUM PROFITS THAT HE CAN OUT OF HIS TRADING TRANSACTIONS . INCOME WHICH ACCRUES TO A TRADER IS TAXABLE IN HIS HANDS : INCOM E WHICH HE COULD HAVE, BUT HAS NOT EARNED, IS NOT MADE TAXABLE AS IN COME ACCRUED TO HIM. BY ADOPTING A DEVICE, IF IT IS MADE TO APPEAR THAT INCOME WHICH BELONGED TO THE ASSESSEE HAD BEEN EARNED BY SOME OT HER PERSON, THAT INCOME MAY BE BROUGHT TO TAX IN THE HANDS OF T HE ASSESSEE, AND IF THE INCOME HAS ESCAPED TAX IN A PREVIOUS ASSESSM ENT A CASE FOR COMMENCING A PROCEEDING FOR REASSESSMENT UNDER SECT ION 147(B) MAY BE MADE OUT. AVOIDANCE OF TAX LIABILITY BY SO A RRANGING COMMERCIAL AFFAIRS THAT CHARGE OF TAX IS DISTRIBUTE D IS NOT PROHIBITED. A TAXPAYER MAY RESORT TO A DEVICE TO DIVERT THE INC OME BEFORE IT ACCRUES OR ARISES TO HIM. EFFECTIVENESS OF THE DEVI CE DEPENDS NOT UPON CONSIDERATIONS OF MORALITY, BUT ON THE OPERATI ON OF THE INCOME- TAX ACT. LEGISLATIVE INJUNCTION IN TAXING STATUTES MAY NOT, EXCEPT ON PERIL OF PENALTY, BE VIOLATED, BUT IT MAY LAWFULLY BE CIRCUMVENTED. ' IT IS A WELL ACCEPTED PRINCIPLE OF LAW THAT AN ASSE SSEE CAN SO ARRANGE HIS AFFAIRS AS TO MINIMISE HIS TAX BURDEN. HENCE, I F THE ASSESSEE IN THIS CASE HAS ARRANGED ITS AFFAIRS IN SUCH A MANNER AS TO REDUCE ITS TAX LIABILITY BY STARTING A SUBSIDIARY COMPANY AND TRANSFERRING ITS SHARES TO THAT SUBSIDIARY COMPANY AND THUS FORGOING PART OF ITS OWN PROFITS AND AT THE SAME TIME ENABLING ITS SUBSIDIAR Y TO EARN SOME PROFITS, SUCH A COURSE IS NOT IMPERMISSIBLE UNDER L AW. MR. MANCHANDA CONTENDED THAT A PERSON SHOULD NOT BE ALLOWED TO ADOPT A DEVICE BY WHICH HE GIVES UP SOMETHING THROU GH THE RIGHT HAND AND RECEIVES THE SAME THROUGH THE LEFT HAND. A CCORDING TO HIM, THERE IS NO DIFFERENCE BETWEEN THE ASSESSEE AND ITS SUBSIDIARY AND, THEREFORE, WHEN THE ASSESSEE TRIED TO MAKE PROFITS THROUGH ITS SUBSIDIARY, WE MUST PRESUME THAT THE PROFITS WERE M ADE BY THE ASSESSEE ITSELF. IN SUPPORT OF THAT CONTENTION HE S OUGHT TO PLACE RELIANCE ON THE DECISION OF THE HOUSE OF LORDS IN S HARKEY (INSPECTOR OF TAXES) V. WERNHER . THEREIN, THE ASSESSEE WAS A BREEDER OF HORSES. SHE ALSO HAD RACING STABLES. SHE TRANSFERRE D SOME HORSES FROM HER STUD TO THE STABLES. IN SO DOING SHE DEBIT ED IN HER ACCOUNTS ONLY THE COST OF BREEDING THE HORSES AND NOT THEIR MARKET PRICE. THE QUESTION AROSE WHETHER IN COMPUTING HER INCOME THE MARKET PRICE OF THOSE HORSES OR MERELY THE COST OF BREEDING THEM SH OULD BE TAKEN 7 M.A. NO. 01/HYD/2018 M/S AGARWAL GLOBAL STEELS (P) LTD. INTO CONSIDERATION. THE HOUSE OF LORDS UPHELD THE C ONTENTION THE REVENUE BY MAJORITY THAT IN COMPUTING THE PROFITS O F THE ASSESSEE THE MARKET PRICE OF THOSE HORSES SHOULD BE TAKEN INTO C ONSIDERATION. THE RATIO OF THIS DECISION IS SIMILAR TO THE RATIO OF T HE DECISION OF THIS COURT IN DOOAR'S TEA CO. LTD. COMMISSIONER OF AGRIC ULTURAL INCOME- TAX. THEREIN, A TEA GARDEN OWNER RAISED IN HIS OWN GARDEN BAMBOO, THATCH AND SOME OTHER AGRICULTURAL PRODUCE. HE UTIL IZED THOSE PRODUCTS FOR THE PURPOSE OF ITS TEA BUSINESS. THE Q UESTION AROSE WHETHER, WHILE ASSESSING THE TEA GARDEN OWNER UNDER THE BENGAL AGRICULTURAL INCOME-TAX ACT, THE COST OF RAISING BA MBOO, THATCH, ETC., SHOULD BE TAKEN INTO CONSIDERATION OR THEIR MARKET PRICE SHOULD BE TAKEN INTO CONSIDERATION. THIS COURT UPHELD THE CON TENTION OF THE REVENUE THAT THE MARKET PRICE OF THOSE PRODUCTS SHO ULD BE TAKEN INTO CONSIDERATION IN COMPUTING THE AGRICULTURAL INCOME OF THE ASSESSEE. THE RATIO OF THE DECISION IN WERNHER'S, AS WELL AS IN DOOAR'S TEA CO.'S CASE *, DOES NOT BEAR UPON THE QUESTION OF LA W ARISING FOR DECISION IN THIS CASE. THEREIN WHAT THE COURTS HAD TO CONSIDER WAS WHERE A PERSON CARRYING ON A TRADE DISPOSES OF A PA RT OF HIS GOODS NOT BY WAY OF SALE IN THE COURSE OF TRADE BUT FOR H IS OWN USE, WHETHER THE PRODUCTION COST OF SUCH GOODS OR THE MARKET PRI CE OF THOSE GOODS SHOULD BE TAKEN INTO CONSIDERATION. BUT, IN THE PRE SENT CASE WE ARE CALLED UPON TO CONSIDER THE QUESTION WHETHER, WHEN ONE TRADER TRANSFERS HIS GOODS TO ANOTHER TRADER AT A PRICE LE SS THAN THE MARKET PRICE, THE TAXING AUTHORITY CAN TAKE INTO CONSIDERA TION THE MARKET PRICE OF THOSE GOODS, IGNORING THE REAL PRICE FETCH ED. AS MENTIONED EARLIER, THE LATTER QUESTION IS NO MORE RES INTEGRA . IT IS CONCLUDED BY THE DECISION OF THIS COURT IN A. RAMAN & CO.'S CASE . FOR THE REASONS MENTIONED ABOVE, WE ARE OF THE OPIN ION THAT THE CONCLUSION REACHED BY THE APPELLATE ASSISTANT COMMI SSIONER IS IN ACCORDANCE WITH LAW AND IT WOULD BE AN EXERCISE IN FUTILITY TO ANSWER THE THIRD QUESTION SET OUT ABOVE IN FAVOUR OF THE R EVENUE AND REMIT THE CASE BACK TO THE TRIBUNAL. IN THIS VIEW OF THE MATTER WE DO NOT PROPOSE TO ANSWER THAT QUESTION. IN THE RESULT THIS APPEAL FAILS AND THE SAME IS DIS MISSED WITH NO ORDER AS TO COSTS. APPEAL DISMISSED. 4.3 IN THE ABOVE DECISION, IT WAS HELD THAT A LIMIT ED COMPANY SOLD ITS STOCK-IN-TRADE TO ITS MANAGING AGENCY FIRM IN WHICH ONE OF ITS DIRECTORS WAS INTERESTED, THE GOODS WERE SOLD AT CONCESSIONAL RAT E. HOWEVER, THE ITO SOUGHT TO TAX ON THE BASIS OF MARKET PRICE OF THE G OODS SOLD AND NOT ON THE ACTUAL PRICE AT WHICH THESE WERE SOLD BY THE ASSESS EE. THE TRIBUNAL UPHELD THAT SALES IN QUESTION HELD TO BE BONAIFDE SALES, AS IN REALITY ASSESSEE MADE NO PROFITS AT ALL. THE HONBLE HIGH COURT AGRE ED WITH THE CONCLUSIONS REACHED BY THE TRIBUNAL AND OPINED THAT IN ABSENCE OF ANY EVIDENCE TO SHOW THAT EITHER THAT SALES WERE SHAM TRANSACTIONS OR THAT THE MARKET PRICE WAS IN FACT PAID BY THE PURCHASERS, THE MERE FACT T HAT GOODS WERE SOLD AT 8 M.A. NO. 01/HYD/2018 M/S AGARWAL GLOBAL STEELS (P) LTD. CONCESSIONAL RATE TO BENEFIT THE PURCHASERS AT THE EXPENSE OF THE COMPANY WOULD NOT ENTITLE INCOME-TAX DEPARTMENT TO ASSESS T HE DIFFERENCE BETWEEN MARKET PRICE AND THE PRICE PAID BY THE PURCHASERS, OF THE PROFIT OF THE COMPANY. IN THE ABOVE DECISION, THE HONBLE HIGH CO URT HAS ADDRESSED THE SALE PRICE ADOPTED BY THE ASSESSEE, THE ACTUAL PRIC E VS MARKET PRICE WHEREAS IN THE PRESENT CASE, THE ISSUE IS ACTUAL PR ICE WHICH IS LESS THAN THE PURCHASE PRICE. THERE IS NO DISPUTE WITH THE ACTUAL PRICE OR MARKET PRICE, THEREFORE, IT IS FACTUALLY DIFFERENT. THEREFORE, W E ARE OF THE VIEW THAT THE ABOVE DECISION IS NOT RELEVANT TO THE CASE IN HAND. 4.4 WITH REGARD TO THE DECISION OF THE HONBLE SUPR EME COURT IN THE CASE OF CIT VS. A. RAMAN AND CO., [1968] 67 ITR 11, WHIC H WAS NOT ARGUED BEFORE US AT THE TIME OF ORIGINAL HEARING, EVEN THO UGH, IT IS PLACED ON RECORD. 4.5 WITH REGARD TO THE DECISION OF THE HONBLE BOMB AY HIGH COURT DECISION IN THE CASE OF PARMANAND BUILDERS P. LTD. , VS. CIT (SUPRA), THE HONBLE COURT HAS HELD AS UNDER: 13.WE ARE OF THE VIEW THAT THE TRIBUNAL WAS B OUND IN LAW TO CONSIDER THE ALTERNATIVE PLEA RAISED BY THE ASSE SSEE AT THE HEARING OF THE APPEALS. THE QUESTION NOW IS, WHAT R ELIEF SHOULD BE GRANTED ON THE APPLICATIONS BEFORE US. THE MISCELLA NEOUS APPLICATION TAKEN OUT BEFORE THE TRIBUNAL BY THE ASSESSEE CLEAR LY BRINGS OUT AN ERROR APPARENT ON RECORD IN SO FAR AS THE ORIGINAL ORDER PASSED BY THE TRIBUNAL IS CONCERNED. IT IS PARTICULARLY SO SINCE BOT THE DECISIONS IN CIBA INDIA (SUPRA) AND MAHALAKSHMI TEXTILE MILLS (S UPRA) WERE ALREADY AVAILABLE WHEN THE TRIBUNAL CONSIDERED THE MATTER. WE ARE, THEREFORE, OF THE VIEW THAT IT WOULD BE MORE APPROP RIATE TO ALLOW THE MISCELLANEOUS APPLICATION AND DIRECT THE TRIBUNAL T O CONSIDER THE ALTERNATIVE PLEA OF THE ASSESSEE IN THE LIGHT OF WH AT WE HAVE STATED ABOVE. SINCE THE FINAL ORDER OF THE TRIBUNAL ON THE APPEAL CAN ONLY BE CRYSTALLIZED AFTER THE PLEA IS SO CONSIDERED BY THE TRIBUNAL, THE REFERENCE MAY HAVE TO BE RETURNED UNANSWERED. 4.6 FROM THE ABOVE IT IS CLEAR THAT THE TRIBUNAL TO CONSIDER ALTERNATE PLEA RAISED BY THE ASSESSEE AT THE TIME OF HEARING OF TH E APPEALS. FURTHER, IT DIRECTED THE TRIBUNAL TO PASS NECESSARY CONSEQUENTI AL ORDERS, EVEN WITHOUT ALTERNATE SUBMISSION, IF THE SITUATION IS WARRANTED . IN THE CASE BEFORE US, THERE IS NO ALTERNATE PLEA RAISED BY THE ASSESSEE, EVEN OTHERWISE, THE SUBMISSIONS MADE BY THE ASSESSEE HAVE ALREADY CONSI DERED WHILE PASSING THE ORDER THEREFORE, THERE IS NO SITUATION WHICH WA RRANTED TO CONSIDER THE ALTERNATE PLEA I.E. REVIEW OF THE ORDER, WHICH CANN OT BE PERMISSIBLE UNDER 9 M.A. NO. 01/HYD/2018 M/S AGARWAL GLOBAL STEELS (P) LTD. LAW. THEREFORE, THIS DECISION OF THE BOMBAY HIGH CO URT IS DISTINGUISHABLE ON FACTS. 4.7 HOWEVER, WE NOTICE FROM THE SUBMISSION FOR MA I N PARA 10.2 & 10.3 THAT ASSESSEE HAS SOLD ONLY 2797.335 MT @ RS. 25,00 0/- + TAX. AT THE SAME TIME, GOUTHAM ROLLING MILLS (P) LTD. HAS SOLD AT RATE OF RS. 30,675.50 (INCLUDING TAX). EVEN ON ADOPTING THE SALE VALUE OF GOUTHAM ROLLING MILLS, THE DIFFERENCE WOULD BE RS. 4,500/-, THE LOSS TO TH E ASSESSEE WILL BE THE VALUE OF RS. 1.25 CRORES. WHEREAS THE AO HAS DISALL OWED THE LOSS AT RS. 1.80 CRORES. THE REVENUE HAS BROUGHT ON RECORD ONLY THIS ALLEGED TRANSACTION IN SUPPORT OF DISALLOWING THE LOSS. THE REFORE, WE FIND THAT THIS ASPECT WAS OVERLOOKED WHILE ADJUDICATING. HENCE, TO GIVE PROPER OPPORTUNITY TO BOTH THE SIDES, WE ARE INCLINED TO R ECALL OUR ORDER FOR A LIMITED PURPOSE TO DETERMINE THE ACTUAL LOSS TO THE ASSESSEE IN THIS TRANSACTION WITH GOUTHAM ROLLING MILLS. ACCORDINGLY , REGISTRY IS DIRECTED TO FIX THE APPEAL FOR HEARING AS DISCUSSED ABOVE. 5. IN THE RESULT, M.A. FILED BY THE ASSESSEE IS AL LOWED. PRONOUNCED IN THE OPEN COURT ON 16 TH MARCH, 2018 SD/- SD/- (D. MANMOHAN) (S. RIFAUR RAHMAN) VICE PRESIDENT ACCOUNTANT MEMBER HYDERABAD, DATED: 16 TH MARCH, 2018. KV COPY TO:- 1) M/S AGARWAL GLOBAL STEELS (P) LTD., 5-4-33/3, ST ERLING APTS., DISTILLERY ROAD, F.M. ROAD, SECUNDERABAD 500 003. 2) DCIT, CIRCLE 1(1), AAYAKAR BHAVAN, HYD 500 0 01. 3) CIT(A) - II, HYD. 4 CIT 1, HYD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE