2011 (3) TMI 1519

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....the order of the Appellate Assistant Commissioner (CT) III, Chennai. The assessee herein is a dealer in cine films. It is seen from the records that the assessee did not file monthly returns and had not paid tax for the assessment year 1993-94. The place of business was inspected by the officials of the enforcement wing on January 7, 1994 and certain documents were seized as D7 records. On scrutiny of the same, it was found that they opened letter of credit in the banks and effected purchases of raw film from the dealers. The sellers raised the sales invoices and discounted them in the respective banks against the letter of credit opened by the assessee. However, the purchases were recorded as loan transactions. The raw films purchase....

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....e affidavits were produced to substantiate the claim of the assessee that the transactions were loan transactions. Consequently, the transaction was not a real purchase or sales and hence, the assessment was set aside. On appeal before the Sales Tax Appellate Tribunal, it was pointed out that the contention of the assessee that the entire transactions were loan transactions was supported by documentary evidence. It is seen from paragraph 12 of the Tribunal's order that the reference to the securities and Frand Cell, Bangalore, had filed a case against the Indian Bank authorities in RC 1(E)/98 CBI/as & PC/ELR. The Tribunal held that there was no genuine transaction between M/s. Ravishankar Films (P) Ltd., and M/s. Asian Films (P) Ltd.....

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....eld that no penalty could be levied at this stage. Aggrieved by the same, the Revenue has filed the present revision by raising the following substantial questions of law. "(1) In the face of several sale invoices due by the assessee, which were recovered from the possession of M/s. Prasad Properties and Investments Pvt. Ltd., and their group of companies, is there not legal burden on the assessee to show that despite those sale invoices, yet no sale at all took place by producing legally accepted material? (2) Would the final report filed by the CBI against the purchasercompany and their group that those invoices have been utilised for raising loans from the bank and thereby defrauding the bank, would amount to a legal material to be....