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TMI Blog1970 (8) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... The exercise book contained entries from 18th November, 1965, to 6th December, 1965, i.e. for a period of one month and 17 days. The total of the credit entries amounted to Rs. 1,57,147 while the entries in the debit side totalled to Rs. 2,22,714. On verification it was found that transactions worth about Rs. 88,293.99 had not been recorded in the account books and the rest had been recorded. The assessee's explanation was that the exercise book did not contain any transactions of sale or purchase but was a private account for the transactions of loan and their repayment. This explanation of the assessee was not believed and the amount of Rs. 88,000 and odd was held to be suppressed turnover. In the circumstances, the Sales Tax Officer rejected the assessee's account books and made a best judgment assessment for both the years enhancing the turnover by Rs. 6,00,000 for the assessment year 1965-66 and Rs. 3,00,000 for the assessment year 1964-65. On appeal, the appellate authority confirmed the assessments except that it reduced the turnover of gur by Rs. 75,000 for the assessment year 1965-66 and by Rs. 40,000 for the assessment year 1964-65. The assessee then applied in revision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... best judgment assessment has to be supported by some material. The material may be direct or circumstantial but a mere suspicion or conjecture cannot take the place of evidence or material. We are, therefore, unable to uphold the finding of the judge (Revisions) so far as the assessment year 1964-65 is concerned. On the facts and circumstances of the case the survey of 7th December, 1965, was not relevant for the assessment year 1964-65 and no suppression could be presumed for that year on the basis of the survey. Sri Ram Manohar Sahai, learned counsel for the department, has placed reliance upon a decision of a Division Bench of this court in Jagannath Baboo Lal, Hatia, Kanpur v. Commissioner of Sales TaxSales Tax Reference No. 189 of 1957 decided on 7th February, 1963., in support of the contention that the survey made during one year can be relevant for the assessment of the earlier year. That case, however, can be easily distinguished. No doubt in that case also survey was made on 4th May, 1954, which was outside the assessment year 1953-54, the assessment year in dispute. But what was discovered as a result of the survey was that the assessee had been following a different m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a Division Bench of this court in Abdul Samad, Yarn Dealer v. Commissioner of Sales Tax, U.P., LucknowSales Tax Reference No. 426 of 1968 decided on 9th February, 1970; printed at p. 390 infra. Although the facts of that case were slightly different from the facts of the present case, yet that decision does support the views we are taking that the survey made during a subsequent year cannot always be held to be relevant for determining the turnover of an earlier year. Accordingly, we answer question No. (1) in the negative in favour of the assessee and against the department. Question No. (2) relates to the estimate of the turnover for the two assessment years. After having answered question No. (1) in favour of the assessee, it follows that the enhancement made in the turnover of the assessment year 1964-65 based as it was on the survey of 7th December, 1965, could not be upheld. We, therefore, answer question No. (2) so far as it relates to the assessment year 1964-65 in the negative in favour of the assessee and against the department. We are now left with the part of question No. (2) which relates to the assessment year 1965-66. The only question is as to whether the est ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department was not able to detect any irregularity in the assessee's accounts. It is only during the survey made on 7th December, 1965, that some suppression was discovered which, according to the learned counsel, is only a stray instance of suppression. This argument again is not sound. Mere fact that the department was unable to lay its hands on the material relating to suppression on the part of the assessee during the survey made earlier does not mean that the assessee was not practising evasion earlier. The exercise book does not contain merely a single transaction of suppression. It shows a continuous and methodical day to day suppression for a period of one month and 17 days. It cannot, therefore, be said that it was a stray instance of suppression which was discovered during the survey. From the magnitude of the assessee's business also, it cannot be said that the estimate of the turnover is so excessive as to be called arbitrary. For the assessment year 1965-66, the assessee itself declared the total turnover of purchases at over Rs. 20 lacs, although he admitted the net turnover at about Rs. 7,84,000 only. The Sales Tax Officer had fixed the total turnover at Rs. 19,36,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed before the judge (Appeals) as remarked by him in his judgment, and so it is not open to the applicant to agitate it again before this court." It appears to us that the Judge (Revisions) rejected the books of account for two reasons: one was that the action of the assessing authorities in rejecting the books of account was not agitated before the Judge (Appeals), and the other was the statement of the assessee himself disclosing the discrepancy in the actual sales between the period 10th October, 1958, to 31st October, 1958, on the one hand and the statement of the sales as entered in the accounts and mentioned in his returns for the month of October, 1958. Both the grounds were relevant and furnished material on the basis of which an inference that the books of account were not properly maintained could be reached. It cannot, therefore, be said that there was no material for rejecting the accounts version. For the assessment year 1959-60 the accounts were rejected by the following finding: "For the year 1959-60 the accounts could not be accepted as discussed above. Moreover, at one time in the subsequent year the accounts were not found up to date and at another the shop was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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