TaxTMI 
TaxTMI 
TaxTMI 
2009 (3) TMI 953
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....in gold jewellery and in precious stones and diamonds in the year 2001 and continued the same without taking registration or making payment of sales tax. The clandestine business transactions carried on in the residential premises and in two business places were detected on search conducted by the inspection team. In the course of search, the search team examined the business slips, stock statements, note books, scribbling pads, etc., maintained by the assessee and estimated the purchase and sales during all the four years. It was noticed that the business transaction of the respondent in the individual capacity in 2001-02 was not of the magnitude that attracts sales tax liability. However on evaluation of the seized records for the remaini....
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....r, the assessing officer made addition of two times. The assessments were contested in appeal before the first appellate authority who held that since the entire records are recovered there is no scope for further addition. However still he sustained the addition of one time to the suppression noticed on inspection. When this was challenged by the assessee before the Tribunal in second appeal the Tribunal allowed the appeals holding that the assessment should be made based on the suppression noticed by the intelligence officer in the compounding proceedings issued by him. It is against these orders the Revenue has filed these revisions before this court. The issue raised is whether the estimates made by the intelligence officer in the cours....
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....bservations in favour of the assessee the first appellate authority sustained an addition of one time, in addition to the turnover declared by the assessee which was acceptable to the Department. We are unable to accept the technical objection raised by the assessee that in the absence of a second appeal by the Department, the Department was precluded from challenging the orders of the Tribunal in this court by which the Tribunal directed acceptance of the turnover returned by the assessee who has not taken registration or filed any monthly returns or maintained regular books of account. We are however in agreement with the proposition put forward by the counsel for the assessee that if the entire records of clandestine business are seized ....
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....ver directed acceptance of books of accounts and ordered assessment based on the returns by the assessee. We are unable to accept the contention of the assessee that the turnover returned by the assessee which is exactly the same turnover estimated by the intelligence officer should be accepted and the assessing officer has no justification to make any estimation or addition to the turnover. In the first place as already held by us proceedings for compounding is a proceeding different from regular assessment. As per the scheme of compounding, the assessee who has been detected of an offence has to pay compounding fee which during the relevant years was double the amount of tax or Rs. 2 lakhs whichever is higher. In fact for the year 2003-0....
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....then there is no scope for further addition. However, it is for the assessee to establish and co-relate entries in the business slips, bill books, note books, purchase bills, sales bills, etc., and in the absence of any co-relation it is for the officer to reject books of accounts as incomplete and estimate turnover based on relevant materials. We therefore set aside the orders of the Tribunal and that of the first appellate authority and remand the matter back to the assessing officer for giving opportunity to produce the books including the seized records if released to the assessee and to make fresh assessment based on the above observations. However, since the assessee has closed the business and since the Department has not fil....