TaxTMI 
TaxTMI 
1990 (11) TMI 389
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....d to the applicant in the course of cross-contracts and there being no question of delivery or transfer of property in the goods, the transactions were not actual sales. The aforesaid deducted amount covered patan transactions involving sales of goods worth Rs. 26,77,350 to Anglo-India Jute Mills Co. Ltd. of goods worth Rs. 21,07,365 to India Jute Co. Ltd. and goods valued Rs. 20,93,370.64 to Bharat Burlop Linkers. The Commercial Tax Officer allowed the claims relating to the sales to Anglo-India Jute Mills Co. Ltd. and India Jute Co. Ltd. but he did not accept the contention of the applicant with regard to the sales to Bharat Burlop Linkers and consequently the gross turnover was enhanced by Rs. 20,93,370.64. 3.. Being aggrieved by the assessment order of the Commercial Tax Officer the applicant-dealer preferred an appeal before the Assistant Commissioner, who, however, did not grant any relief to him. He thereafter went up in revision against that appellate order before the Additional Commissioner, who allowed a part of the claim out of the abovementioned enhanced figure, being of the view that patan transactions of the aggregate value of Rs. 3,17,287.55 did not fructify as sa....
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.... of section 21 of the Bengal Finance (Sales Tax) Act, 1941, read with section 7(1)(b) of the West Bengal Taxation Tribunal Act, 1987, the following question to this Tribunal: "Whether, in the facts and circumstances of the case, the Tribunal was correct in law to hold that the patan transactions totalling Rs. 17,76,083.09 or any other part thereof with Bharat Burlop Linkers were sales exigible to tax under the Bengal Finance (Sales Tax) Act, 1941 Hence this reference. 7.. We shall now consider the rival contentions of the parties to the instant reference. 8.. The case of the applicant in brief is that the transactions with Bharat Burlop Linkers as also those with India Jute Co. Ltd. and Anglo-India Jute Mills Co. Ltd. are of the same nature. These are patan or short-circuit transactions, where no delivery of goods is involved, and no sales have actually taken place in terms of the Sale of Goods Act or the Bengal Finance (Sales Tax) Act, 1941. These are in the nature of crosscontracts and/or forward contracts pataned or settled in the manner usually prevalent in the local gunny market, where, as a result, in the case of short-circuits, intermediaries are eliminated by payme....
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....ns in question are speculative deals without actual delivery of goods as indicated in the two Calcutta High Court Division Bench decisions, viz., Wadhwana v. Commissioner, Income-tax [1966] 61 ITR 154 and Murlidhar Jhunjhunwalla v. Commissioner of Income-tax [1969] 73 ITR 727 [App.]. Income-tax Act provides that losses on account of speculative transactions could not be set-off against the income of the assessee from other business. "A speculative transaction means a transaction in which a contract for purchase and sale of any commodity including stocks and shares is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or strips." It was held in Wadhwana's case [1966] 61 ITR 154 (Cal), that, as the exchange of pucca delivery orders amounted only to notional and not real delivery of the goods as contemplated in the Income-tax Act, the transactions were speculative transactions and the loss incurred by the assessee could not be set-off against the other business income. It has been explained in the said judgment that the object is not to invalidate transactions which are not completed by actual delivery of the goods but only to bran....
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....cases referred to are Hyderabad Deccan Cigarette Factory v. State of Andhra Pradesh [1966] 17 STC 624 decided by the Supreme Court; Haji P.K. Moidoo Bros. v. State of Madras [1959] 10 STC 1 decided by the Full Bench of the Kerala High Court; Tata Engineering and Locomotive Co. Ltd. v. Assistant Commissioner of Commercial Taxes [1970] 26 STC 354 decided by the Supreme Court. 14. Mr. D. Majumdar, learned State Representative, however, contended that since the applicant had claimed a certain benefit it is his primary responsibility to prove its allowability. He further contended that as the terms of the contract of sale are within the special knowledge of the applicant, it is incumbent on him to place before the taxing authorities the relevant details, viz., that the pucca delivery orders were ultimately purchased by the mills and cancelled, which he has failed to do in this particular case. He indicated that it was at the stage of the Tribunal below that the applicant adopted this new plea of shifting the onus to the sales tax authorities. 15.. It appears that at the stage of the Additional Commissioner that certain sales were exempted on production of evidence regarding....