TaxTMI 
TaxTMI 
1973 (6) TMI 59
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....d supplied gunnies to the Food Corporation of India to the total value of Rs. 2,43,651 and that this turnover had been omitted to be shown in the return submitted by them. The assessing authority after considering the objections filed by the assessees proceeded to treat the said turnover of Rs. 2,43,651 as a taxable turnover, being the value of the gunnies said to have been sold by the assessees to the Food Corporation of India. The inclusion of the said turnover was questioned by the assessees by filing an appeal before the Appellate Assistant Commissioner, who, however, sustained the addition. Thereafter, the assessees took the matter in appeal before the Tribunal. The Tribunal, after considering the various clauses of the agreement enter....
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.... the contract which the assessees have entered into with the Food Corporation of India. The relevant contract between the Food Corporation of India and the assessees provides that the corporation is to supply wheat packed in gunny bags to the assessees for converting the same into maida, sooji, atta and bran and that the assessees, after such conversion, should deliver to the corporation the said wheat products marked and packed according to the existing standard packings. The services to be rendered by the assessees are taking delivery of the wheat bags from the corporation, cleaning, washing, drying, grinding the wheat supplied, and converting it into various products and delivering them to the corporation packed according to the existing....
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....ions and the relevant clauses in the contract between the Food Corporation and the assessees, we are convinced that in this case there cannot be a contract for sale of gunny bags as such by the assessees to the corporation and that it is not possible even to infer an implied contract of sale of gunny bags. It is not in dispute that the agreement does not at all refer to any obligation on the part of the assessees to supply old or new gunny bags and to pack the wheat products in those bags. As a matter of fact, it is seen that the assessees have in most cases used old gunny bags in which wheat was supplied to them and only in cases where such old gunny bags could not be used, they had used new gunny bags for packing the wheat products. The a....