2004 (4) TMI 50

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....rises for the assessment year 1980-81. The assessee is a dealer in kerosene oil as also other petroleum products such as furnace oil, light diesel oil, etc. In the course of the assessment proceedings, the Income-tax Officer noticed several defects in the books of account. It was noticed that account books had also been seized by the sales tax authorities. It was further noticed that there were several kinds of discrepancies between the sales as recorded in the cash book and sales reflected in the cash vouchers. In the opinion of the Income-tax Officer, sales to the tune of Rs. 1,40,340 were found under-recorded in the cash book when they were compared with the sale vouchers maintained by the assessee. In other words, in the opinion of the ....

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....assessee on this issue which they gave before the Assessing Officer as to how and on what basis the alleged short fall in the accounts to the extent of Rs. 1,40,340 has occurred. Indeed, this explanation of the assessee was not accepted by the Assessing Officer, and the same was upheld by the Commissioner of Income-tax (Appeals) and later by the Tribunal in the following words: "These instances reflected suppression of sales to the tune of Rs. 1,40,340 on account of understatement. 9. The assessee submitted that sometimes the cash is not recovered in respect of the sales in the vouchers. Whenever it is recovered, it is recorded in the cash-book. Sometimes sales as per sale vouchers are less but recovery is more on account of earlier s....

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....y. The cash-book must reflect the true picture of each and every sale transaction on day-to-day basis and the moment it is affected. When even according to the assessee, the sale had taken place and voucher is issued then it should have appeared in the cash-book in the same manner. In our opinion, the explanation offered by the assessee as to why the entry could not be made the same day was not rightly accepted by the taxing authorities, being not according to normal principle of accountancy. In our opinion, the sanctity of the books of account is of paramount importance. The books of account must always reflect the real and proper picture of each and every sale transaction entered into by the assessee on day-to-day basis in the cash-boo....