1996 (10) TMI 453

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....ties have resorted to the question of estimation and addition in regard thereto on the assumption that the resort is taken as a closed door affair. 3.. For the assessment year 1988-89, the assessee returned form No. 8 showing total turnover at Rs. 11,18,792.05. The assessee is the proprietor of a jewellery business in the name and style "K.G.P. Jewellery" situated at Mutoor, near about Kalady. 4.. The books of accounts produced were rejected, on the basis of the inspection dated January 28, 1989 by the Intelligence Squad, Mattancherry, leading to the subsequent verification of the books of accounts produced in the light of the details gathered by inspection. The date, January 28, 1989, is at the fag end of the assessment year practica....

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....ld provide sustenance to the contention regarding daily sales being around Rs. 600. 7.. It is from this material, the inferences are sought to be drawn. They are, firstly, there was substantial cash balance on every day in the jewellery section in addition to the cash balance in China clay section, which was shown as kept idle as per the accounts. Loan was seen taken from the bank paying huge interest; secondly, it is observed that there is always a relationship between the running stock and the annual sales turnover in a jewellery business and the situation was in the nature of an exception. It is specified in the order of the Sales Tax Officer, in the following manner:   The situation appears to have resulted in the issuance of....

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....n whatsoever to resort to rejection of accounts and proceed to best judgment assessment, has not even been considered, is a question of addition. 10.. The Sales Tax Appellate Tribunal, Additional Bench, Ernakulam, in the appeals filed both by the assessee as well as by the Revenue, has also not considered the lifting up of the veil and has mechanically dwelt upon the smallness of the suppression detected at the fag end of the year and that too for the purpose of considering the required addition. 11.. In our judgment, rejection of accounts and resort to best judgment are not matters that become a closed door situation and to be accepted as a matter of course. It should not appear that the appellate authority should accept the fact of ....