2013 (5) TMI 648 - HC - VAT and Sales Tax

Revision u/s 58 Conduction of surveys - Discrepancies were found in the books of account AO made additions u/s 7(3) & u/s 9(2) which was reduced by the first appellate authority to some extent Held that - In the instant case, no proper books of accounts were found at the time of survey. So, there was no option available before the A.O. except to made the addition on estimate basis. The first appellate authority again examined the material, loose papers etc. and made the addition on estimate basis by giving a partial relief to the assessee, which was upheld by the Tribunal. Tribunal is a final fact finding authority as per the ratio laid down in the case of Kamla Ganpati vs. Controller of Estate Duty, 2001 (2) TMI 132 - Supreme Court Thus it is clear that no question of law is emerging from the impugned order passed by Tribunal. Order is hereby sustained.

Summary

Issues:
Assessment of tax liability based on estimate | Validity of addition made by lower authorities | Registration status of the assessee | Maintenance of proper books of accounts | Finality of Tribunal's decision on factual matters | Legal position on estimation in tax matters

Analysis:
The judgment involves two revisions filed by the assessee against a common judgment passed by the Commercial Tax Tribunal. The assessee, engaged in the sale and purchase of Timber, faced discrepancies during a survey leading to additions in tax liability. The Assessing Officer made additions under sections 7(3) and 9(2) of the U.P. Value Added Tax Act, which were partially reduced by the First Appellate Authority. The Tribunal upheld the First Appellate Authority's decision. The key contention was the legality of the additions made by the lower authorities based on estimates.

The assessee argued that the business had recently started, was engaged in job work, and was not running its own business. The counsel highlighted the lack of proper registration and the incorrect business name mentioned by the investigation officer. On the other hand, the Standing Counsel supported the Assessing Officer's decision. The High Court noted that the assessee was running a business without proper registration and maintained inadequate books of accounts. The court emphasized that without the survey, the assessee might have evaded taxes due to the lack of registration.

Given the absence of proper books of accounts during the survey, the Assessing Officer resorted to making additions on an estimate basis. The First Appellate Authority and the Tribunal upheld these additions after examining the available material. The judgment cited legal precedents to establish that estimation in tax matters is a question of fact, and the Tribunal's decision on factual matters is final. The court found no legal issues warranting interference with the Tribunal's order, thereby dismissing both revisions and upholding the Tribunal's decision.