2016 (10) TMI 783

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....e to the imposition of penalty. They have with the consent of parties been taken up for disposal together. The revisionist is stated to be a dealer engaged in the business of purchase and sale of iron and steel. It was his case that he was purchasing the said articles from a firm in Punjab, whereafter the same was transported to the State of U.P. Sri Agrawal has, during the course of oral submissions, further pointed out and clarified that apart from having offices in the State of U.P, the revisionist also had branches in other States to which iron and steel so purchased was consigned. On 20 January 2006, the Commissioner, Trade Tax, U.P., issued a circular referable to the provisions of Section 8-C (3) (a) of the U.P. Trade Tax Act 19481,....

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....inted out that the deposit of security was demanded in terms of the powers conferred upon the Commissioner under Section 8-C of the Act. He submitted that the Circular itself provided that in case it be found that the security had been incorrectly computed by the dealer concerned or that adequate security had not been paid before obtaining the form in question, the same would be recoverable at the entry check post and accounted for accordingly. He further drew the attention of the Court to Clause 8 of the said circular to submit that the amounts which were deposited by the assessee as security were liable to be taken into consideration while assessing his turnover and benefit of the deposits made accorded to the assessee in terms thereof. H....

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....out from any material on record. Sri B.K. Pandey, learned standing counsel, on the other hand, submits that the material which was gathered during the course of search itself, coupled with the report submitted by the Trade Tax authority of Punjab clearly established that the purchases and sales were not being truly reflected in the books of accounts. Referring to the recital contained in the orders of assessment referred to above, he submits that the same is merely a recordal of the submission of the assessee and does not reflect or represent a finding recorded by the assessing authority. He draws the attention of the Court to the fact that the assessing authority itself in the order relating to A.Y. 2006-07 has proceeded to record that on....

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.... it has proceeded to hold that the assessing authority was clearly justified in rejecting the books of accounts. The Court then further finds that in both the assessment years, the amount of escaped turnover has been increased without reference to any material or record in support thereof. While it is true that a best assessment judgment undertaken by the assessing authority would necessarily entail a certain degree of guess work, the same cannot be used as a licence by the assessing authority to not base his estimation on any material at all. The guess work which needs to be employed in such circumstances, must obviously be reasoned and referable to some empirical or contemporaneous material that exists or may be found by the assessing aut....