2003 (2) TMI 448

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..... n 5(2A) of the Act there was liability to pay turnover tax. There were two inspections of the business premises of the assessee on August 24, 1992 and September 3, 1992. On both the occasions, stock variation was found in certain items of foreign liquor. Except in one case the differences were shortages only. There was no compounding proceedings, nor any penalty was imposed for not maintaining true and correct accounts in respect of the business. However, the assessing authority rejected the books of account and estimated the sales turnover by taking the purchase cost, freight, coolie charges, kist, retail licence fee, etc., and added 22 per cent towards the gross profit to the amount so arrived at. The total of such amounts arrived at were .....

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..... 00 (Polakulath Wines v. State of Kerala) [2004] 138 STC 573 relied on by the assessee has not decided that kist amount cannot be taken as part of sales turnover to arrive at the taxable turnover, or total turnover. It was also observed that the First appellate authority had gone wrong in finding that kist amount and licence fee are not direct expenses in the business and therefore the arrival of the cost of goods sold reckoning the kist amount and licence fee is not justifiable. The Tribunal, thereafter accepted the contention of the Revenue and set aside the order of the first appellate authority, who found that kist amount and licence fee are not direct expenses in the business and therefore the arrival of the cost of goods sold reckoni .....

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..... e assessee are to be reckoned. 5.. We have considered the rival submissions. The facts are not in dispute. The assessee is a dealer in foreign liquor. As a result of the two inspections, the total stock variation found is worth Rs. 22,822 the assessing authority has estimated the turnover by taking into account the purchase cost, freight, coolie charges, kist and retail licence fee, besides gross profit. To that amount the assessing authority has also added five times the actual suppression, which came to Rs. 1,14,10. The question for consideration is as to whether the assessing authority was justified in arriving at the sales turnover by taking into account kist, freight, coolie charges, etc. The very same question came up for considerat .....

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