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TMI Blog2002 (10) TMI 755X X X X Extracts X X X X X X X X Extracts X X X X ..... pection, the assessee had not maintained any books of accounts and further, no sale bills were issued for sales. The assessing authority, in the assessment for the year 1992-93, on the basis of the stock variation and other defects mentioned above, proposed to reject the books of accounts of the assessee and to estimate the turnover by adding six times the suppression detected at the time of inspection amounting to Rs.12,19,123.50. The assessee filed objections stating that the difference in stock is on account of the fact that the sealed bottles were opened and arrack was filled in unsealed small bottles for the purpose of convenience of supply to the customers, which is evident from the fact that both the shortage and the excess are of eq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed of the objections taken by the assessee in one sentence to the effect that there is no merit in the objections. The counsel also relied on the decision of this Court in Lovely Thomas v. State of Kerala [1999] 113 STC 505; (1999) 7 KTR 292, as affirmed by the honourable Supreme Court in Civil Appeal Nos. 3558 and 3559 of 1998. The counsel further submits that at any rate, in the absence of any other materials, the additions sustained by the first appellate authority is also on the higher side. 3.. The learned Government Pleader appearing for the respondent, on the other hand, submits that though the assessee was expected to deal only in arrack purchased from the Kerala State Beverages Corporation, the inspection revealed that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les tax, his sale being the second sale of the commodity. In the inspection conducted by the Sales Tax Intelligence Squad on May 27, 1991, variation in the stock of arrack was found. There was shortage of 620.950 litres of arrack as well as excess of equal quantity of arrack. The assessing authority has not accepted the explanation offered by the assessee in regard to the stock variation and had made an addition of six times the value of the actual suppression found to the returned turnover. The first appellate authority gave substantial relief to the petitioner by reducing the addition to three times the sales value of the stock variation found. The main contention taken by the learned Counsel for the petitioner is that the assessing autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... source of purchase. The assessee is entitled to have evidence produced and an inference to be drawn therefrom. There is a prima facie presumption that one who is found in possession of an article or thing is the owner thereof unless that presumption is rebutted by cogent evidence. Section 110 of the Indian Evidence Act, 1872 (in short "the Evidence Act") embodies a salutory principle of common law jurisprudence to that effect. (See Chuharmal v. Commissioner of Income-tax, M.P. [1988] 172 ITR 250(SC). The expression 'burden of proof' really means two different things. It means sometimes that a party is required to prove an allegation before judgment can be given in its favour; it also means that on a contested issue one of the two contendi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application can be laid down. The initial burden of establishing correctness of books of accounts and return filed by an assessee is on him. If satisfactory, clinching and acceptable proof to substantiate figures in the return filed is forthcoming, then the revenue, if it intends to depart therefrom, should in its turn bring such materials on record, as would prove the contrary. As to what would be the measure of acceptable evidence on either side is a varying factor depending upon the facts of each case. No rigid or inelastic formula can be laid down. When accounts are not reliable, best judgment assessment can be done. To sum up if accounts are not fully posted at the time of inspection, unless contrary is established by the assessee, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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