9911796707
TMI Blog1997 (8) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... essee had shown g.p. at the rate of 7.4% on total sales of Rs. 99,44,697. In the course of assessment proceedings, while scrutinising one of the wages payment register (Tudwai Wages), the AC observed that attendance of workers were shown on 29th and 30th February also. It was also observed that no worker had put his signature in token of having received the wages, but had put thumb impression instead. It was, therefore, concluded that the books of the assessee are unreliable and he applied the provisions of section 145(2). Accordingly, he disallowed the following expenses: ------------------------------------------------------ Nature of Total Expenses Expenses Expenses Claimed (Rs.) Disallowed (Rs.) ------------------------------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort of his various contentions, the learned counsel also took us through the various evidences and supporting placed in the paper-book and also relied on several judicial pronouncements. 4. The submissions of the learned D.R. were restricted to the extent that the Assessing Officer rejected the books and made the disallowances on the basis of the facts found him and by considering all the circumstances in totality. The error of mentioning the dates of 29th and 30th February were, in his opinion, indeed a grave error which justified the rejection of book results. The other cases on which the Assessing Officer relied were comparable because they were in the same business and their facts were similar to those of the assessee's. For his submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne which is trustworthy or one which is worthy of confidence. There cannot be a standard to measure reliability and as mentioned earlier, it depends upon one's perception. Perception, though a variable factor, in matters of judging a state of affairs, particularly in a taxing statute, should conform to common sense, custom, usage, ethos, economic upliftment, development of professional attitude, human probabilities and similar such factors. 8. Now we taken up the case before us. The Assessing Officer considered the books to be unreliable and incomplete. Let us analyse the reasons which prompted him to conclude as such. The foremost reason was that in one of the wages register (Tudwai Register), attendance of workers had been shown on 29-2- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... They may be internal vouchers, yet they can be relied upon depending upon the basis of their preparation and cross-verifying those basis from other relevant records. Thus such vague and bald statements do not render the books incomplete and incorrect. 11. This brings us to as to what would constitute correct accounts or correct profits as envisaged in section 145(2). Section 145(2), no doubt refers to correctness of the books. But simply, a few clerical errors, lack of some vouchers, non-maintenance of a particular record, does not per se render the accounts incorrect. In spite of these defects, the profits may be deducible. Thus, before involving the provisions of section 145(2), it is the duty of the Assessing Officer to show how, becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. Having invoked the provisions of section 145(2), the Assessing Officer proceeded to determine the total income. As per law, when section 145 is invoked, the Assessing Officer is supposed to determine the income to the best of his judgment on the basis of material gathered by him. Ironically, despite treating the books as unreliable, the Assessing Officer accepted the purchase and sales recorded in those very books, but not the major expenses under various heads like lime stone breaking, wagon loading, truck loading/unloading, mining expenses, transportation expenses, overburden removal expenses, weight shortage and rate difference. All these expenses according to him were excessive. Interestingly the case of alleged excess expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X
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