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TMI Blog1976 (6) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... 280. In first appeal the AAC felt that some of the defects are not established and reduced the addition to 5 per cent. The addition confirmed by him amounted to Rs. 54,685.47. The appellant had come up in appeal to this Tribunal. Meanwhile the State found that the appellant had been practising under totalling of sales and such practise was discovered with reference to account books of the appellant s for 1970-71 and 1971-72. The learned State Representative therefore wanted that the books for asst. yr. 1966-67 should also be called and the appellant s evasion in this regard considered. The appellant opposed the request on the ground that there was no necessity to produce the books before the Tribunal on a mere surmise of the learned State Representative and that the production of books was not relevant to the defects alleged. The Tribunal however did not agree with the appellant, because it felt that the production of books was necessary even for considering the merits of the addition in dispute before us. After asking for adjournment on two occasions the appellant had come up with the version that the books were lost in transit while being transported. According to them, the books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nced that the loss of books was merely a show he also levied a penalty of Rs. 6,037. In appeal the AAC felt that the addition was justified. He however reduced the penalty to be equal to be additional tax viz. Rs. 4,025. The appellant has therefore come up in appeal against the said order. 3. As for asst. yr. 1969-70 the appellant had reported a total and taxable turnover of Rs. 25,97,919.50 and Rs. 17,88,189.53 respectively. The assessing authority in the original assessment alleged various defects and made an addition to the taxable turnover partly by disallowing some exemptions and partly by bets judgment addition at 15 per cent of the disclosed sales being Rs. 1,83,622.62 which was confirmed to first appeal (barring a marginal reduction in some other minor items of disputes). The appellant had come up before this Tribunal. The Tribunal confirmed the addition at 7 per cent of the disclosed sales (Rs. 91,812 at 3 per cent and the other minor addition of Rs. 3,500.) The Tribunal as per asst. yr. 1967-68 left the question relating to possible under-totalling for action under s. 16. Meanwhile the assessing authority found very similar purchases of exempt goods as for asst. yr. 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss of books. The books were lost by third parties to whom they were entrusted for transport. He claimed that the appellant is not responsible for the loss of the books and no adverse inference need be drawn on that account. He also disputed the jurisdiction of the authorities to levy penalty on the materials they have found. Whatever might be the justification for retaining any addition, he claimed that there was so justification for any penalty. Alternatively, he contended that both the additions and penalties were unquestion ably high and deserved to be interfered with. 5. Thiru J. Venugopa, the learned State Representative on the other hand argued that the appellant had wilfully withheld the books. According to him the appellant s version regarding loss of books was found to be incorrect on enquiry with the transport authorities. At any rate, he argued that under-totalling in respect of purchases of exempt goods has been clearly established even with reference to the records filed by the appellant and available in the case files for the relevant years. He therefore, argued that it is futile on the part of the appellant to deny similar under-totalling where he stood to gain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the suppression in the books either by way of under-totalling or for any other reasons, are found to show that the earlier assessment was inadequate. The fact that the earlier assessment was made on a best judgement does not vest the appellant with a right to immunity from a proper assessment on the basis of more complete facts which was come to light subsequently. We will therefore, now deal with the facts of this case and consider whether there is any material to presume sales over and above the sales estimated in the original assessment. 7(a). It was argued by the learned counsel that the inference of purchase omissions in respect of exempt goods itself is not established. We have gone through the records. We find that the list of purchases for both the years show totals when added up which are more than the book totals of purchases as per copies of Trading and Profit and Loss Account available. The difference between the book total and the correct total as per list on record shows that same pattern of under-totalling in digits relating to thousands. Such pettern is evident for not only for the two years under consideration, but also for two later years as seen from the books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of taxable sales by about Rs. 1,20,000 of disclosed sales was as against the reported taxable sales of Rs. 20,45,674.41 for asst. yr. 1970-71 and Rs. 90,000 of disclosed sales as against the reported turnover of Rs. 19,93,700.32 for nine months for asst. yr. 1971-72. Hence it is difficult to presume that there has not been any concrete data for inference for inference of omitted sales for the two years under consideration. Similar, in respect of exempt goods for the asst. yr. 1967-68 in respect of jaggery and kerosene the difference in under totalling actually works out to 15 per cent of disclosed total sales in final accounts. For asst. yr. 1969-70 the ratio works out to about 10 per cent in respect of purchases of exempt goods for asst. yr. 1969-70. It is therefore clear that the appellants omitted sales would not be less than 10 per cent. In fact the other defects such as excess stock etc., noticed clearly give indication of the true state of appellant s business and the assessing authority was possibly nearer the truth turnover when he fixed an addition of 10 per cent of 1967-68 than the appellant authorities who reduced the addition to 7-1/2 per cent and 5 per cent respectiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to the disclosed sales for both the years under consideration will be fair and reasonable. Hence the further addition which can be authorised is only the difference between the addition which was confirmed in appeal in the original assessment and the overall addition as now found reasonable. In fixing the addition at 10 per cent of the disclosed sales we have considered the ratio of omitted sales with reference to books for asst. yrs. 1971-72 and 1972-73 as well as the data regarding omitted purchase in respect of exempt goods. We have also considered the defects in the original assessments as well as the inference in the revised assessment. Hence the addition to the books turnover of taxable sales as confirmed now for the asst. yr. 1967-68 will be Rs. 24,522.88 at 2-1/2 per cent and Rs. 73,728.07 at 3 per cent. Hence the addition sustained in these appeals in orders under s. 16 are Rs. 12,261.44 at 2/1-2 per cent and Rs. 36,864.03 at being the difference between the turnovers as per original assessments as finally decided by the Tribunal and the turnovers as per revised assessment as fixed by the Tribunal. The relief due for asst. yr. 1967-68 will therefore, be Rs. 90,374.53 (R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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