2012 (11) TMI 1063 - HC - VAT and Sales Tax

Court Upholds Estimation Basis for Tax Assessment

The Court upheld the assessing officer's decision to reject the books of accounts and make additions on an estimate basis due to discrepancies found ... Rejection of books of accounts - addition on estimate basis - Held that:- After hearing both the parties and on perusal of record, it appears that the survey was conducted at the business premises of the assessee on April 25, 1998 and January 14, 1999, where various discrepancies were found as mentioned in the assessing officer order. So, the assessing officer was right in rejecting the books of account. There was no other option available before assessing officer except to make the addition on estimate basis. The first appellate authority has again examined the books of accounts and made the addition on estimate basis by giving the partial relief to the assessee. The Tribunal has upheld the same. Thus no question of law is emerging from the impugned order passed by the Tribunal. Hence, no interference is required Issues:1. Revision under section 11(1) of the U. P. Trade Tax Act, 1948 against the judgment and order passed by the Trade Tax Tribunal for the assessment year 1998-99.2. Discrepancies found during a survey at the business premises of the assessee leading to rejection of books of accounts and addition on an estimate basis.3. Assessee's contention regarding the rejection of books of accounts based on legal precedents.4. Justification of the impugned order by the Department.5. Legal position on estimation as per relevant case laws.Analysis:1. The revision was filed against the judgment and order of the Trade Tax Tribunal for the assessment year 1998-99. The assessing officer rejected the books of accounts due to discrepancies found during surveys in April 1998 and January 1999, leading to an addition on an estimate basis. The first appellate authority and the Tribunal endorsed this decision, prompting the assessee to file the present revision.2. The counsel for the revisionist argued that the addition based on the survey was incorrect, citing legal precedents where non-availability of books during surveys did not imply non-maintenance. Additionally, the counsel highlighted cases where non-cooperation during surveys did not warrant rejection of account books. The counsel also mentioned that mandi fee papers found during the survey indicated the correctness of accounts.3. The Department, represented by the standing counsel, supported the impugned order, emphasizing the discrepancies found during the surveys as the basis for rejecting the books of accounts. The assessing officer's decision to make additions on an estimate basis was deemed appropriate given the circumstances.4. The Court, after hearing both parties and examining the record, upheld the assessing officer's decision. The rejection of books of accounts and the subsequent addition on an estimate basis were deemed justified due to the discrepancies found during the surveys. The Tribunal's decision to uphold the addition was supported, considering it as a factual matter.5. The Court referred to established legal principles regarding estimation, citing relevant cases to support the decision. It was concluded that no question of law arose from the impugned order, and thus, no interference was warranted. The impugned order was sustained based on the legal position and reasons provided therein, resulting in the dismissal of the revision filed by the assessee.