TMI Blog1995 (6) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... ntry liquor as a wholeseller and as a L-13 licensee. The assessee was required to produce the sale vouchers but since no such voucher had been maintained at all, the assessee could not comply with the direction of the AO. Therefore, the sales were estimated at Rs. 46,50,000. The assessee went in appeal and the sale was reduced to Rs. 39,00,000. Thus, the addition made by the AO at Rs. 15,23,137 was reduced to Rs. 7,73,137. 3. In the case of Rattan Lal Co., the assessee had filed return showing total income at Rs. 67,370. Gross profit had been shown at Rs. 1,00,856, on total sales amounting to Rs. 60,75,742. In this case also, the assessee had not maintained the sale vouchers and, therefore, the AO was of the view that the sales were no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f account could not be rejected only because sale vouchers had not been maintained. It has been explained that the assessee was new to the whole-sale business in country liquor and since it was the first year of business, they did not maintain sale vouchers. In subsequent year, they took care to prepare sale vouchers against all the supplies and the sales have been accepted not only in assessment made under s. 143(1) but also under s. 143(3). The books of account are said to be audited. The learned counsel has also stated that all the purchases were duly vouched and the assessee was required to make purchases from the distillery under authorisation issued by the Excise authorities. The AO did not choose to reject the purchases but simply es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een noted in the books of account in lump sum. It was held that the books could not be rejected under s. 145(1) because no finding had been recorded as to the unacceptability of the method and irregularity of the account kept by the assessee. 5. The learned Departmental Representative has, in reply, submitted that the absence of sale vouchers constituted a sufficient ground to attract application of proviso to s. 145(1). In the absence of vouchers, sales were not at all verifiable and since the correctness of the sales were found to be doubtful, sales were rightly estimated. It is also stated that the G.P. rate of 1.66% was too low and estimate of sales was made in view of low G.P. rate shown by the assessee. The learned Departmental Rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ason that certain unaccounted sales have been detected. Neither of the two things has been discussed by either of the two Revenue authorities. The AO has simply observed that the G.P. rate shown by the assessee was quite low. It is not cleat as to what G.P. rate was adopted so as to make the enhancement in sales. The expenses have also not been doubted. The assessee could make the purchases under the authorisation only and the purchases were duly verifiable from the vourchers and on enquiry from the distillery. 8. As regards sales, these could be verified from the stock register and also on enquiry from the retailers. It appears that the AO did not make any enquiry either for verification of the purchases or for looking into the correctn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplies recorded in the stock register were not correctly entered. It is correct that this was the first year of the business and the assessee failed to maintain the sale vouchers. In the subsequent year, the assessee started issuing sale vouchers against the supplies and sales have been accepted. It is thus clear that the sales have not been doubted in subsequent year because sales were made against vouchers. In the year under appeal, the sales have been rejected only because vouchers had not been issued. The purchases, the expenses and other payments have not been doubted at all. The stock register has been maintained as required under the Excise Rules. The AO could have examined the stock register so as to verify, if the supplies recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X
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