9911796707
TMI Blog1975 (3) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... 37,894.07 and Rs. 37,592.71 respectively, for the year 1969-70. The assessee, a partnership firm-M/s. Central Automobiles, Pazhavangadi, Trivandrum-are dealers in automobiles. Their accounts were called for, and on scrutiny, the following defects were noted: "(1) There was neither an opening stock list nor a closing stock list. (2) The sales turnover reported for 1969-70 was very low. (3) No satisfactory explanation was given for the steep fall in the purchases as well as in the sales of the previous year. (4) Separate accounts were not maintained for the purchases and sales of 3 per cent and 12 per cent taxable goods during the year 1969-70, and (5) The net loss of Rs. 748.85 conceded for 1969-70 cannot be accepted as true." N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e stocks as on 1st April, 1969, and 31st March, 1970, could not be made by him. We feel that this is a very serious defect which renders the accounts unacceptable for the sales tax assessment purposes. We also feel that the Appellate Assistant Commissioner should have considered this defect along with the other defects pointed out by the assessing authority and found that the accounts of the assessee are unreliable. In the circumstances, we reverse the findings of the Appellate Assistant Commissioner and uphold the rejection of the accounts. The addition made by the officer to the turnover conceded by the assessee appears to be quite reasonable and we therefore restore the assessment made by the officer on the assessee for the year in quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.. Reliance was also placed upon a decision reported in Durairaj Reddiar v. Commissioner of Income-tax[1972] 83 I.T.R. 484; 1971 K.L.T. 806., to which one of us was a party. Isaac, J., speaking for the Bench, considered among others the decision(1), referred to above, and held that the absence of a stock register by itself is not a ground to reject the accounts and where the accounts of the assessee are maintained according to the method regularly employed by him, and where they are correct and complete, they have to be accepted. The learned judge observed thus: "What is relevant to consider in such cases is whether the assessee's accounts are maintained according to the method regularly employed by him, whether they are correct and co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Appellate Tribunal and the subordinate authorities. There is no case that the assessee has for the purpose of sale repacked the bags and increased their number by reducing their contents. In a wholesale business like that of the assessee, who buys and sells in terms of the number of bags, maintenance of a stock register in terms of weight is a very laborious process............the assessee has admittedly maintained his accounts according to the method regularly employed by him, and the profits and gains of the business can be properly computed from his accounts. The only question is whether the accounts are correct and complete. There is no finding that the purchases have been exaggerated or the sales have been suppressed, or that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses of over 3 lakhs of rupees no vouchers were forthcoming and without the vouchers the entries in the account books could not be verified; (2) there was no quantitative tally for the grains and for other materials purchased by the assessee and it was not possible to accept the books of account, where the turnover was as large as 17 lakhs of rupees without a quantitative tally; (3) a fairly big sum of money was alleged to have been paid towards purchasing of licences for export from India; and Rs. 19,000 worth of purchases were made in Tuticorin when only a small sum of money in cash was shown in the assessee's accounts; (4) several outsiders' cheques had been entered in the accounts of the assessee without any proof as to why those cheques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the materials on record it cannot be seen that he had a particular method of maintaining his accounts, which would entitle him to urge that the non-maintenance of the stock register would not be a material circumstance to disbelieve the accounts. 7.. In addition to the above facts, it has to be noted that under rule 32(2) of the Kerala General Sales Tax Rules, it is necessary for the assessee to maintain separately under separate heads the turnover of goods which carry different percentage of sales tax. There is no explanation from the assessee why this has not been done. The turnover includes purchases and sales of 3 per cent and 12 per cent taxable goods. The non-maintenance of these accounts is also one of the circumstances which sh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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