TaxTMI 
TaxTMI 
1996 (3) TMI 512
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...... No bills issued for sales, nor a chitta kept to account the daily sales. 4.. Sales turnover of containers are taxable. 5.. From the trial balance filed by you it is evident that you had dealings with soft drinks at Madurai. Inter-State purchases of soft drinks have not been brought to the accounts. 6.. There are 22 employees working in the hotel considering this fact and also considering the expenditure, purchase, etc., the sales turnover conceded is too low to be accepted. 7.. Sales of straw is taxable. 8.. The turnover of curd is not conceded. This will be estimated at Rs. 15,000." and thereafter the notice contained reference to inspection dated November 28, 1985 and the following stock differences with regard to the stock checked. They are as follows: Excess "Mixture 8 kgs. .. Mollasses 3 kgs. .. Gilebi 140 nos. .. Bolly 75 nos. .. Padusha 40 nos. .. Mysore pak 60 nos. .. Halva 5 kgs. .. Laddu 42 nos. .. Chips 6 kgs. .. Chocolate burpy 25 nos. .. Coconut 500 nos. .. Curd 25 litres .. Tamarind 5 kgs. .. Coriander Turmeric 25 kgs. .. Pappadam 2 bdle. .. 4.. On the basis, the notice requisition as per the ....
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....ards curd it is stated that the milk is purchased and curd is prepared out of it and therefore any attempt to proceed to estimation would be without any basis in regard thereto. 10.. As regards the inspection conducted on November 28, 1995, finding of excess stock is denied and the very finding regarding the character of the stock being in excess is challenged. 11.. It is submitted that the defects pointed out are not worth the name to its credit the accounts submitted having been maintained in the normal course of business of the assessee. 12.. With reference to the proposal of addition of 40 per cent, objection is that there is no basis for this percentage of estimation. It is submitted that basis could be the appellate order for the previous year in question. It is submitted that no finality is reached in regard thereto also as the same be under challenge before the appellate Tribunal. 13.. It is submitted that firewood, cooking gas, coconut, etc., in regard to the assessment are exempted categories. 14.. Lastly it is also submitted that curd was not purchased any time and estimate in regard thereto is highly speculative. 15.. It is thereafter that the A....
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....ill be fixed at Rs. 10,000 and the empties will also be fixed at Rs. 10,000. No other modifications called for." The appellate authority has reduced the percentage of the estimate from 40 per cent to 25 per cent in addition to the reduction as regards curds as stated above. 18.. It appears that in pursuance of the directions of the first appellate authority as regards the revision of the assessment, the assessing authority (annexure E) by the order dated May 30, 1989 carried out the said directions. 19.. However in the meantime the petitioner-assessee approached against this order of the first appellate authority dated November 10, 1988. 20.. The appellate Tribunal, it is unfortunate also treated the question of rejection of accounts and resorting to the process of estimation not in a different manner. The discussion of this aspect is reproduced below: "The next contention of the representative is that the defects pointed out are not serious enough to reject the accounts or to warrant an exorbitant estimate as made in this case. The assessing authority has found out as many as 9 defects in the accounts including absence of stock inventories, unsuppor....
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.... firewood, perfect requirements of maintenance of bills would not be possible and if the accounts are maintained in regard thereto exhibiting maintenance on day to day basis, the aspect cannot be appreciated as a justification for throwing away the accounts without sale chits cover transactions in regard thereto. When the accounts are placed unless and until there is intrinsic material to justify throwing them away, resort to estimation taking rejection almost as an automatic process is difficult for appreciation in the context. There are 22 employees in the hotel according to defects notified as above. There is no material for this basis. No particulars of the inspection are referred to in any of the orders of the fact-finding authorities even with regard to the excesses which are specifically reproduced hereinbefore. The question is not as to whether the excesses are found on a day of inspection but the question is as to whether this would be a justification for rejection of the accounts. Intrinsically when the defects are pointed out, in our judgment, are not satisfactory as a basis, the situation gets worsened when objections of the assessee are taken up for perusal and its eff....