9911796707
TMI Blog1994 (11) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... 988-89, the said discrepancy was as under: S. No. Party's Name Sales on basic Value as per incentive bonus Paper seized Basic value of sales recorded in assessee's book Difference 1. M/s Sethi General Store 25,32,516 18,77,955 6,54,561 2. M/s Duggal Crockeries 11,40,961 3,34,605 8,06,356 3. M/s Capital Crockery 12,79,416 8,56,158 4,23,258 18,84,175 For assessment year 1989-90, discrepancy was noticed as under: S.No. Name of the dealer Basic value As per sale Register for 88-89 (Annex.B-4) Basic value as per Annexure A-24 Statement of incentive bonus Sale of goods suppressed Basic value of goods sold 1. Amar Singh & Sons, Delhi 6,90,327 7,49,569 59,242 2. Capital Crockery House 9,94,327 10,20,732 26,108 3. Delhi Crockery Agency, Delhi 6,05,475 6,61,464 55,989 4. Kashmir Traders, Delhi 4,09,363 4,10,501 1,138 5. Sethi General Stores, Delhi 3,06,514 10,46,267 7,39,753 6. Duggal Crockery Agency, Delhi 3,20,882 10,04,632 6,83,750 7. Shree Durga Agency, Saharanpur 2,84,504 3,26,074 41,570 8. Shukun Agency, Khurja 1,66,781 2,36,511 69,730 9. Proful Enterprises, Bombay 4,94,564 26,50,369 25,55,795 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer was of the view that assessee has made a frantic hit to somehow tally the sales figures available to incentive bonus by locating suitable bills that can match them. He accordingly concluded that the amounts of sales available on the incentive bonus statement are correct figures of the sales and the difference between the sales available on the seized paper and those recorded in the assessee's books was taken as assessee's sales outside the books. He not only added the difference on the basis of basic value but also added excise duty @ 20% plus sales tax @ 10%. Addition of ₹ 24,87,111 was accordingly made for assessment year 1988-89. 3. Similarly, for assessment year 1989-90, addition of ₹ 61,28,207 was made on the basis of difference in the basic value in respect of 17 parties. For this year custom duty @ 20% and the sales tax @ 10% was somehow not added for the purpose of computing the sales made outside the books of account. 4. Assessee appealed to the CIT(A) and reiterated his contentions. The CIT(A) not being satisfied with the explanation of the assessee confirmed the view of the Assessing Officer. It was observed by the first appellate author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention that the onus in regard to the suppression of sales was on the revenue. The learned counsel also invited our attention to the written explanations furnished before the authorities in support of the contention that the discrepancies pointed out by the Assessing Officer had been satisfactory explained. 6. The learned counsel further contended that assessee had been paying incentives bonus in the past on the same basis as during the years under appeal. In earlier years also sales made to various persons have been grouped together in order to settle the claim of incentive of some of the dealers as and when they were introduced by them. Assessing Officer was thus not justified in disbelieving the assessee's version. Referring to the finding of the revenue authorities that proper records were not maintained by the assessee, the learned counsel invited our attention to the letter dated 26-5-1991 placed at pages 27 to 29 of the paper book wherein it was specifically claimed that proper register has been maintained by the assessee giving the basic value of the turnover made to the various dealers including the basic value of the sales made through them. The said register according t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordingly pleaded that the additions made by the Assessing Officer may be confirmed. 8. We have given our careful consideration to the rival contentions. It is by now well-settled that when certain documents etc., are found from the possession of the assessee during the search operations, burden lies on the assessee to explain the nature of the transactions recorded in such documents, statements of books of account. Assessee is duty bound to explain the discrepancy, if any, found on the basis of the seized material vis-à-vis the books of account. However, when assessee furnished an explanation which is sought to be supported by evidence, the onus would then shift back to the revenue. In the case, during search operations statement of incentive bonus being Annexure A-24 to the Panchnama was found and when the sales recorded in that statement were compared with the sales recorded in the books of account, a discrepancy was found. For assessment year 1988-89, the discrepancy was noticed in the case of three dealers and for assessment year 1989-90, the discrepancy was noticed in the case of 17 dealers, as has been referred to elsewhere in this order. When confronted assessee soug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on-adjustment of certain debit and credit notes. A reconciliation statement has been furnished. It is thus claimed that there does not remain any discrepancy in any of the cases. The argument that the sales of some other parties are to be accounted for in the sales of above-mentioned distributors for the purpose of incentive bonus is indeed an innovative one and certainly afterthought. The fact of inclusion of sales to X in the sales of Y is not borne out of any of Assessee's record. The sale bills are silent and so are other connected papers. It is only the assessee's oral assertion coupled with accommodative yet vague statement of two of the above mentioned distributors which the assessee can rely on. M/s Sethi General Store have however did not give any statement to support the assessee's above assertion. It is not known as to how and on what basis above arrangement had been made and it is still a mystry as to who remembers all relevant facts. Thus, it is evident that there is no substance in the arguments now taken by the assessee and it is obviously aimed at explaining irreconcilable discrepancies. It appears that the assessee has made a frantic bit to somehow tally the sale f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se. (ii)In the turnover of Duggal Crockery, the basic value of the sales made to Raju Crockeries and Crockery Centre are also included. (iii)In the turnover of Sethi General Store, the basic value of sales made to Verma Crockery and feather touch are included. We have maintained register where the figures of the basic value of the sales made through them have been mentioned. From this register a statement showing the basic value of the turnover of various dealers including the basic value of turnover of other details made through them and target figures have been prepared It has been seized during the search operation. The Register where these figures are noted have been produced before your good self. The confirmation certificates from Capital Crockery House and Duggal Crockery confirming the aforesaid fact have already been filed to your good self. The confirmation certificate from M/s Sethi General Store could not be obtained as his sons brain tumour operation has been done. He is not available. You can certify the said fact from Sethi General Stores. It is also brought to your kind notice that the amount of incentive bonus have been paid by crediting the said sum to their a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of sale to X in the sales of Y are not borne in any of the assessee's records" is incorrect and contrary to the explanation of the assessee on record. The books of account of the assessee form part of the seized records. When assessee is giving in writing that he has maintained the records of the dealers whose turnover is included in the turnover of other dealers, it was the duty of the Assessing Officer to verify the claim of the assessee. In the absence of any verification by the Assessing Officer, the finding recorded to the contrary is arbitrary and unjustified. Let us now compare the evidence on record for and against the assessee: (A)EVIDENCE RELIED BY THE REVENUE: 1.Statement prepared by the assessee for the purposes of payment of incentive bonus being Annexure A-24 of the seized material. 2.The sales recorded in the books of account (as per the statement of the incentive bonus and the sales recorded in the books of account, there is alleged discrepancy in the sales. (B)EVIDENCE IN FAVOUR OF THE ASSESSEE: 1.Explanation of the assessee that there is no discrepancy when the turnover of various dealers (basic value) and that of the other dealers made through them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nquiries. That would serve a dual purpose. Either the suspicion of the Assessing Officer would have been strengthened by the evidence so collected to support the case of the revenue of in the alternative the suspicion would have vanished to the advantage of the assessee. In our view, in this case there was scope for enquiry. For example, Assessing Officer could have made enquiries from the parties whose turnover has been included by the assessee in the turnover of other dealers for computation of incentive bonus and the independent enquiry from such dealers would have revealed the truth in favour or against the assessee. We have emphasized time and again that Assessing Officers are entrusted with the task of making fair assessments. When certain material is thought to be incriminating, assessee is bound to explain and furnish necessary evidence. When an explanation is furnished by the assessee which is said to be supported be evidence, it is the duty of the Assessing Officer to consider the explanation and the evidence with an objective mind. In case the Assessing Officer considers the explanation and/or the evidence furnished by the assessee to be unreliable, it would be just and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cising quasi-judicial authority is not supposed to take advantage of ignorance of the assessee's. The job of the Assessing Officer is to make a fair and reasonable assessment and not to fight a ping pong battle of wits with the assessee. A fair and reasonable assessment is possible only by giving a fair and reasonable opportunity to the assessee and if necessary by guiding the assessee as to the evidence that is required in support of the claim made by the assessee. In the present case, assessee having furnished evidence in support of the claim in the form of books of account, sale bills register maintained for the purposes of incentive bonus and certificates from M/s Duggal Crockeries, Delhi and M/s Capital Crockery stores supporting the version of the assessee, the fact of incentive bonus having been credited in the ledger account of respective dealers, the primary onus that vested with them stood discharged. By giving a satisfactory explanation and the evidence referred to above, the onus had shifted to the revenue and the latter having failed to make enquiries from the concerned dealers whose turnover had been included by the assessee in the turnover of other dealers for the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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