TMI Blog1997 (8) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... % on total sales of Rs. 99,44,697. In the course of assessment proceedings, while scrutinising one of the wages payment register (Tudwai Wages), the AC observed that attendance of workers were shown on 29th and 30th February also. It was also observed that no worker had put his signature in token of having received the wages, but had put thumb impression instead. It was, therefore, concluded that the books of the assessee are unreliable and he applied the provisions of section 145(2). Accordingly, he disallowed the following expenses: ------------------------------------------------------ Nature of Total Expenses Expenses Expenses Claimed (Rs.) Disallowed (Rs.) ------------------------------------------ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases. Hence the principles of natural justice were also violated. Thus it was very strongly urged by the learned counsel that all the disallowances deserved to be deleted. In support of his various contentions, the learned counsel also took us through the various evidences and supporting placed in the paper-book and also relied on several judicial pronouncements. 4. The submissions of the learned D.R. were restricted to the extent that the Assessing Officer rejected the books and made the disallowances on the basis of the facts found him and by considering all the circumstances in totality. The error of mentioning the dates of 29th and 30th February were, in his opinion, indeed a grave error which justified the rejection of book results. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w a phrase from a decision of the Kerala High Court as quoted in 102 ITR 694, "the stupidity of the officer to the cupidity of the assessee." The word "reliable" means dependable or one which is trustworthy or one which is worthy of confidence. There cannot be a standard to measure reliability and as mentioned earlier, it depends upon one's perception. Perception, though a variable factor, in matters of judging a state of affairs, particularly in a taxing statute, should conform to common sense, custom, usage, ethos, economic upliftment, development of professional attitude, human probabilities and similar such factors. 8. Now we taken up the case before us. The Assessing Officer considered the books to be unreliable and incomplete. Let u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on given by the Assessing Officer is that vouchers relating to transport charges were internal vouchers. However, he has not given any specific reason as to how these vouchers are bogus. They may be internal vouchers, yet they can be relied upon depending upon the basis of their preparation and cross-verifying those basis from other relevant records. Thus such vague and bald statements do not render the books incomplete and incorrect. 11. This brings us to as to what would constitute correct accounts or correct profits as envisaged in section 145(2). Section 145(2), no doubt refers to correctness of the books. But simply, a few clerical errors, lack of some vouchers, non-maintenance of a particular record, does not per se render the accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer are such which could have shaken the confidence of a person with average wisdom, in the books maintained by the assessee. The provisions of section 145(2) are wrongly invoked. 13. Having invoked the provisions of section 145(2), the Assessing Officer proceeded to determine the total income. As per law, when section 145 is invoked, the Assessing Officer is supposed to determine the income to the best of his judgment on the basis of material gathered by him. Ironically, despite treating the books as unreliable, the Assessing Officer accepted the purchase and sales recorded in those very books, but not the major expenses under various heads like lime stone breaking, wagon loading, truck loading/unloading, mining expenses, transp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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