Penalty for unaccounted stock sustained where documents were absent and verification in witness presence was supported by the record.

Penalty for carrying admitted unaccounted stock was sustained because the assessee failed to produce books of account, bills, vouchers or builty despite ample opportunity, and a later affidavit was treated as a self-serving statement with little evidentiary value. The court also rejected the plea of violation of rule 50, holding that the record supported stock verification in the presence of witnesses and acceptance of valuation at the spot. On these facts, the Tax Board's deletion of penalty was unsustainable and the penalty order was restored.

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Issues: Whether penalty imposed for carrying unaccounted goods without books of account, bills, vouchers and builty was liable to be sustained, and whether there was any violation of rule 50 in the survey and verification process.

Analysis: The material on record showed that no books of account, bills, vouchers or builty were produced either at the time of survey or before the appellate authority, despite adequate opportunity. The partner of the respondent-firm had made an admission regarding the excess stock, and the stock verification was stated to have been done in the presence of two witnesses. In these circumstances, the affidavit filed later was treated as a self-serving statement with little evidentiary value. The record also did not support the plea that rule 50 had been violated, since the finding of the assessing authority and the first appellate authority was that the verification was duly made in the presence of witnesses and the valuation was accepted at the spot.

Conclusion: The penalty was rightly imposed and the deletion of penalty by the Tax Board was unsustainable.

Final Conclusion: The revision succeeded and the penalty order stood restored, as the assessee failed to displace the finding of admitted unaccounted stock and the alleged procedural challenge was not established.

Ratio Decidendi: Where unaccounted goods are admitted and the assessee fails to produce books and supporting documents despite opportunity, a belated affidavit without contemporaneous protest does not dislodge the penalty, and compliance with the verification procedure will be presumed when the record supports stock checking in the presence of witnesses.

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