9911796707
TMI Blog1977 (4) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of Rs. 79,628.10 on various dates beginning from 27th Nov., 1969 to 30th March, 1970. Some items of purchase by the appellant as seen from the anamath accounts have also been reflected in the regular accounts of the appellant. The amounts paid by the appellant towards credit purchases from Kalyani Oil Mills have not also passed through his regular accounts. According to the AO Rs. 79,628.10 represents only second and subsequent purchases made by the appellant relating to the period of four months. Since this purchase turnover had not been brought to account by the appellant, it was presumed that the appellant might have crushed the entire suppressed ground kernel of 532 hags and 7 kgs, and manufactured oil and oil cake and sold in the usual course of his business without brining them to accounts. In estimating the sales of oil at Rs. 74,356.00 and oil cake at Rs. 20,066.00 totalling Rs. 94,422.00 the AO made an addition of Rs. 1,88,844.00 being two-times for previous 8 months. He accordingly estimated the total sales suppression of oil and oil cake at Rs. 2,83,266.00 taxable at 3 per cent. On the above basis he determined the total turnover as detailed below: . at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kernels to the appellant, has been overlooked. The observation of the learned AAC that the conversion of kernel into oil and oilcake would have fetched a higher profit than the sale of kernels is applicable to Thiru Mamundy Chettiar. It is observed that Mamundy Chettiar and his brother being the owners of decorticating mill and an oil mill would have taken the opportunity to earn a higher profit by converting kernel into oil and cake and this opportunity of making higher profit would not have been passed on to the appellant who is a competitor in this line o business. The order of he learned AAC is based on mere probabilities and based on "Scope to omit purchase of agricultural produce through some source or another". The estimation of the purchases as 1-1/2 times the alleged suppression of purchases, is without any basis. The period from 27th Nov., 1969 to 30th March, 1970 covered by the anamath accounts in the peak season for decorticating groundnut. In the absence of any carry forward entries of the alleged transactions prior to 27th Nov., 1969 the finding that the purchase might have been made even earlier is mere conjecture. The learned AAC has determined the dryage and wasta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furtherance of his arguments advanced before the learned AAC contended that the AO and the learned AAC have absolutely no basis to infer that the kernel purchased has been fully converted into oil and oilcake and sold clandestinely. There is apparent merit in this contention. The appellant who has also sold groundnut kernel also pointed out that when purchase suppression of groundnut kernel was found out, no inference could be drawn that such unaccounted purchases of groundnut kernel might have been crushed into oil and oilcake and sold out of account as held by this Bench in MTA 177/76 dt. 27th July, 1967, and MTA 57/76 dt. 20th July, 1967. There is considerable force in this submission. When the purchase suppression of groundnut kernel is proved, the natural corollary is that the sales of groundnut kernel would have been suppressed. There is no basis in this case to infer that the alleged groundnut kernel purchased out of accounts has been converted into oil and oilcake and sold without bringing such sales into regular accounts. In the absence of any shred of evidence that the appellant has crushed the kernel in question into oilcake and sold them, we are unable to uphold that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ording to these anamath slips, the appellant had purchased 331 bags of groundnut kernel which were not brought to account. The suppression in this behalf is computed as under: T.O. of sales of oil (3 tins per bag at Rs.70) per tin 331 X 70 Rs. 69,510,00 Sales turnover of oilcake (200 bags at Rs. 30 per bag of 50 Kilograms) Rs. 6,000.00 . Rs. 75,510.00 This is taken as relating to the period from 1st Dec., 1970 to 16th Dec., 1970. Five times the sum of Rs. 76,510.00 i.e., Rs. 3,77,550.00 was taken as sales suppressed in oil and oilcake. Estimated purchase omission of groundnut kernel was taken at 86 per cent of Rs. 3,77,550.00. The AO computed the suppression as under: Actual purchase omission, i.e., first purchase of kernel Rs. 64,068.00 Estimated purchase omission (86% of Rs. 3,77,550.00) Rs. 2,70,625.00 Total purchase turnover estimated Rs. 3,24,693.00 The taxable turnover was computed as follows : . at 1-1/2% at 3% Taxable turnover as per accounts 33,06,648.39 34,90,401.79 Add : Supressions of oil and oilcake which have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vered from his residence Rs. 2,16,272.00 2,24,620.00 . Rs. 35,22,920.39 39,26,173.79 Total taxable turnover determined 74,49,094.18 Exemptions : . II purchase of groundnut kernel as per accounts 2.06,589.99 II purchase of groundnut kernel as per anamath accounts of Thiru Mamundy Chettiar 2,10,660.53 Total turnover refixed 78,66,344.70 He however held that penalty is leviable only in respect of the purchase suppression of groundnut kernel as revealed from the anamath slips to the extent of Rs. 54,068.00. Accordingly he scaled down the penalty to Rs. 1,216 being equivalent to 1-1/2 times the tax due on the suppressed purchase turnover of Rs. 54,068. 8. The contentions on behalf of the appellant in respect of the purchase suppression as found from the anamath accounts recovered from Kalyani Oil Mills, Alangudi are the same as in the previous appeal MTA No. 312/75. Besides it is also contended that the appellant had submitted particulars of electricity consumed and that there had been no abnormal increase in the power consumption. It is contended that the AAC s observa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. This amount is therefore confirmed. Here also, the learned AAC has presumed that 331 bags of groundnut kernel might have been crushed into oil and oilcake and sold for Rs. 2,74,607.00 out of accounts. In the absence of any proof, we are unable to sustain this addition also on the analogy of our decision stated above. We therefore delete Rs. 2,24,620.00 taxed at 3 percent 10. In as much as the AAC has sustained the penalty only in respect of the actual suppression of first purchase of groundnut kernel to the extent of Rs. 64,068.00 with reference to the slips we find no reason to interfere with the penalty of Rs. 1,216 sustained by the appellant authority. In the result we sustain only an addition of Rs. 2,16,272.00 in respect of groundnut kernel taxable at 1-1/2 and the penalty of Rs. 1,216 deleting the rest of turnover disputed. Subject to the above modifications, the appeal stands dismissed. 11. As regards the enhancement petition, the claim of the Revenue is found to be erroneous. The actual suppression is only in respect of 331 bags valued at Rs. 54,068.00. We have also confirmed the penalty relatable to this suppressed turnover as sustained by the learned AAC. The Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X
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