9911796707
TMI Blog1976 (6) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... thereto are shortly as follows: In the assessment year in question, i.e., 1960-61, the relevant previous year being from 22nd October, 1958, to 10th October, 1959, the assessee had owned and run a rice mill at Bolpur in the district of Birbhum. In that year the assessee purchased paddy from local suppliers, viz , " byaparis " and also from the cultivators. In the assessment for the said assessment year the Income-tax Officer noted that the purchases of paddy were supported only by the assessee's own documents being bills containing signatures and thumb impressions of the sellers. The Income-tax Officer also took note that the average cost price of paddy so purchased was Rs. 13.44 per maund. The cost of rice obtained from such paddy inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had purchased paddy from the cultivators during the period at such controlled price for an aggregate amount of Rs. 1,01,105. In respect of the balance purchases from the cultivators aggregating Rs. 1,76,865 it was urged that only in the months of December, 1958, July, 1959, and September, 1959, within the said assessment year, the assessee had paid the higher price to the cultivators than that paid to the other suppliers, viz., " byaparis ". This higher price was sought to be justified on the ground that the paddy which was purchased from the cultivators during these months were old and dry but the paddy purchased from the other suppliers was new and contained a higher percentage of moisture. The Appellate Assistant Commissioner appears ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l did not find that the paddy purchased from the cultivators was dry and that the paddy purchased from the dealers contained moisture. The Tribunal concluded that an addition of Rs. 55,000 in this account would meet the ends of justice ". Mr. Pranab Pal, learned counsel for the assessee, has contended before us that the Tribunal has ignored important relevant materials on record and has come to a conclusion taking into account only some of the facts in respect of a part of the entire transactions for the year. Mr. S. Sen, learned counsel for the revenue, has contended otherwise. We have carefully considered the respective submissions of the parties. It appears to us that the contentions made on behalf of the assessee are not without sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the basis of best judgment or estimate is well-settled. One of the later decisions of the Supreme Court in the case of Commissioner of Sales Tax v. H. M. Esufali H. M. Abdulali [1973] 90 ITR 271, 276, 277 ; 32 STC 77 (SC), which was cited, lays down the law as follows: " The distinction between a ' best judgment ' assessment and assessment based on the accounts submitted by an assessee must be borne in mind. Sometimes there may be innocent or trivial mistakes in the accounts maintained by the assessee. There may be even certain unintended or unimportant omissions in those accounts; but yet the accounts may be accepted as genuine and substantially correct. In such cases, the assessments are made on the basis of the accounts maintained ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' for that of the assessing authority. In the case of ' best judgment ' assessments the courts will have to first see whether the accounts maintained by the assessee were rightly rejected as unreliable. If they come to the conclusion that they were rightly rejected, the next question that arises for consideration is whether the basis adopted in estimating the turnover has reason able nexus with the estimate made. If the basis adopted is held to be a relevant basis even though the courts may think that it is not the most appropriate basis, the estimate made by the assessing authority cannot be disturbed." In the above case the Supreme Court also quoted with approval an observation of Subba Rao J. (as he then was) in an earlier decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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