Survey material showing undisclosed transactions sustained the assessment, while a late natural justice objection over report supply failed.
Contemporaneous survey material showing loading of oil cake in a vehicle without corresponding book entries supported the assessment, so it was not invalid merely because the books of account were unavailable at survey. The Allahabad HC also rejected the natural justice challenge based on non-supply of the SIB report, noting that the objection was raised for the first time in revision and no universal rule of compulsory supply was shown. The revision therefore failed on merits, and the modified tax demand was left undisturbed.
Issues: (i) Whether the assessment and tax demand could be sustained when the books of account were not available at the time of survey but the record also showed loading of oil cake in a vehicle without corresponding disclosure in the books. (ii) Whether non-supply of the SIB report to the assessee vitiated the assessment on the ground of breach of natural justice.
Issue (i): Whether the assessment and tax demand could be sustained when the books of account were not available at the time of survey but the record also showed loading of oil cake in a vehicle without corresponding disclosure in the books.
Analysis: The assessment was not founded merely on the absence of books of account. The material relied upon by the authorities showed that, on the date of survey, a vehicle was being loaded with oil cake and that this transaction was not reflected in the books. The first appellate authority had already examined the facts and reduced the demand. On this basis, the assessment could not be treated as a pure best judgment assessment based only on non-production of books.
Conclusion: The issue was decided against the assessee and the assessment was upheld.
Issue (ii): Whether non-supply of the SIB report to the assessee vitiated the assessment on the ground of breach of natural justice.
Analysis: The objection regarding non-supply of the SIB report was not shown to have been raised before the authorities below or the appellate forum. The plea was taken for the first time in revision. The record did not establish that supply of the report was compulsory in every case, nor did the facts justify interference on this ground.
Conclusion: The issue was decided against the assessee and no breach of natural justice was found.
Final Conclusion: The revision failed on merits, and the tax demand as modified by the appellate authorities remained undisturbed.
Ratio Decidendi: A tax assessment based on contemporaneous survey material showing undisclosed transactions is not invalid merely because books of account were absent, and a belated objection regarding non-supply of a survey report does not by itself establish a violation of natural justice.
TaxTMI 
AI Drafter ✕
TaxTMI 
