TaxTMI 
TaxTMI 
1977 (4) TMI 77
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....ut kernel of 532 bags and 7 kgs. to the value of Rs. 79,628.10 on various dates beginning from 27th Nov., 1969 to 30th March, 1970. Some items of purchase by the appellant as seen from the anamath accounts have also been reflected in the regular accounts of the appellant. The amounts paid by the appellant towards credit purchases from Kalyani Oil Mills have not also passed through his regular accounts. According to the AO Rs. 79,628.10 represents only second and subsequent purchases made by the appellant relating to the period of four months. Since this purchase turnover had not been brought to account by the appellant, it was presumed that the appellant might have crushed the entire suppressed ground kernel of 532 hags and 7 kgs, and manufactured oil and oil cake and sold in the usual course of his business without brining them to accounts. In estimating the sales of oil at Rs. 74,356.00 and oil cake at Rs. 20,066.00 totalling Rs. 94,422.00 the AO made an addition of Rs. 1,88,844.00 being two-times for previous 8 months. He accordingly estimated the total sales suppression of oil and oil cake at Rs. 2,83,266.00 taxable at 3 per cent. On the above basis he determined the total turn....
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....r and his brother being the owners of decorticating mill and an oil mill would have taken the opportunity to earn a higher profit by converting kernel into oil and cake and this opportunity of making higher profit would not have been passed on to the appellant who is a competitor in this line o business. The order of he learned AAC is based on mere probabilities and based on "Scope to omit purchase of agricultural produce through some source or another". The estimation of the purchases as 1-1/2 times the alleged suppression of purchases, is without any basis. The period from 27th Nov., 1969 to 30th March, 1970 covered by the anamath accounts in the peak season for decorticating groundnut. In the absence of any carry forward entries of the alleged transactions prior to 27th Nov., 1969 the finding that the purchase might have been made even earlier is mere conjecture. The learned AAC has determined the dryage and wastage of kernels in the progress of converting kernel into oil and oil cake at 5 per cent which is not correct. It is well known that the months and of November and December are wet months dryage of kernel would be far higher than in any other months. The learned AAC faile....
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....tion. The appellant who has also sold groundnut kernel also pointed out that when purchase suppression of groundnut kernel was found out, no inference could be drawn that such unaccounted purchases of groundnut kernel might have been crushed into oil and oilcake and sold out of account as held by this Bench in MTA 177/76 dt. 27th July, 1967, and MTA 57/76 dt. 20th July, 1967. There is considerable force in this submission. When the purchase suppression of groundnut kernel is proved, the natural corollary is that the sales of groundnut kernel would have been suppressed. There is no basis in this case to infer that the alleged groundnut kernel purchased out of accounts has been converted into oil and oilcake and sold without bringing such sales into regular accounts. In the absence of any shred of evidence that the appellant has crushed the kernel in question into oilcake and sold them, we are unable to uphold that the dealer has effected clandestine sales in oilcake. Hence not only natural justice has been denied to the appellant in that no confronting enquiry has been made to establish the purchase suppression, but also the Revenue has failed to prove that the appellant has crushed....
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....ms) Rs. 6,000.00 . Rs. 75,510.00 This is taken as relating to the period from 1st Dec., 1970 to 16th Dec., 1970. Five times the sum of Rs. 76,510.00 i.e., Rs. 3,77,550.00 was taken as sales suppressed in oil and oilcake. Estimated purchase omission of groundnut kernel was taken at 86 per cent of Rs. 3,77,550.00. The AO computed the suppression as under: Actual purchase omission, i.e., first purchase of kernel Rs. 64,068.00 Estimated purchase omission (86% of Rs. 3,77,550.00) Rs. 2,70,625.00 Total purchase turnover estimated Rs. 3,24,693.00 The taxable turnover was computed as follows : . at 1-1/2% at 3% Taxable turnover as per accounts 33,06,648.39 34,90,401.79 Add : Supressions of oil and oilcake which have been crushed out of 1270 bags and 71 Kilograms purchased from A Mamundi Chettiyar, Kalyani Oil Mills Alangudy which have not been brought to accounts as per note books H and I 2,22,265.00 Sales omissions of oil and oilcake as per slips 1 to 10 recovered by special staff for the purchase suppressions of 331 bags of groundnut kernel 3,77,550.00 Total purchase t.o. estimated as per slip 1 to 10 3,23,693.00 . . 36,31,341.39 40,90,216.79 Exemptions : II ....
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....MTA No. 312/75. Besides it is also contended that the appellant had submitted particulars of electricity consumed and that there had been no abnormal increase in the power consumption. It is contended that the AAC's observation that the appellant might have got the kernel crushed from other mills on payment of cooly has not been proved beyond doubt. It is further urged that even the AO has not adverted to such an unfounded surmise. The Appellant also denies the purchase of 331 bags of kernel as noted from the slips. It is also contended that the slips do not state whether they related to groundnut kernel or paddy or some other commodities. The estimation at 4 times the actual suppression is also attacked, besides, the estimation in the alleged sale of oil and oilcakes. The levy of penalty is also attacked on the ground that the alleged purchase of 331 bags of kernel has not been established. As in the previous case, the learned counsel seriously contended that the assessment on the basis of the alleged suppression of groundnut kernel from the anamath accounts secured from Kalyani Oil Mills is illegal and unjust as no confronting enquiry was made in this behalf. As we have already h....