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of <h1>Court sets aside orders, directs new order within 2 months, emphasizes evidence & legal principles in tax assessments.</h1> <h3>M/s Cargill India Pvt. Ltd. Versus The Commissioner Commercial Tax</h3> M/s Cargill India Pvt. Ltd. Versus The Commissioner Commercial Tax - TMI Issues:1. Interpretation of law regarding rejection of account books when turnover in account books is higher than disclosed in the return.2. Justification for disallowing a claim of damage less than 1% when it was allowed in a subsequent assessment year.Analysis:Issue 1:The case involved a revision filed against an order passed by the Commercial Tax Tribunal regarding the rejection of account books for the assessment year 2005-06 under the UP Trade Tax Act. The revisionist, a multinational company engaged in the business of manufacturing and selling vegetable oil, refined oil, and ghee, claimed transit loss of edible oil during stock transfers to its branches. The revisionist argued that the goods were lost in transit due to leakage and damage, common in the nature of trade. The authorities rejected the claim of transit loss and made a best judgment assessment based on alleged under-valuation of sale products. The revisionist contended that the competitive rates were offered in the first year of business to establish market presence and that subsequent years' assessments accepted the transit loss. The Court found that the rejection of account books without concrete evidence was unjustified, citing precedents emphasizing that accounts maintained in the regular course of business should be given credence unless adverse material is presented.Issue 2:Regarding the disallowance of a claim of damage less than 1%, the Court noted that the negligible amount of damage shown was reasonable considering the nature of the revisionist's business. The Court held that the revenue cannot dictate how a taxpayer should conduct business affairs and rejected the authorities' justification for disallowing the claim based on suspicion and surmises. Precedents were cited to emphasize that in the absence of adverse material, accounts maintained regularly should not be disbelieved. The Court set aside all orders passed by lower authorities, directing the Tribunal to pass a new order within two months and allowed the revision with costs.In conclusion, the judgment addressed the issues of rejection of account books and disallowance of a damage claim, emphasizing the importance of concrete evidence and adherence to legal principles in tax assessments.
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