TMI Blog1983 (8) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... ting an addition of 1 per cent of the taxable turnover to the book turnover, the assessing authority added a turnover of a sum of Rs. 20,977 (1 per cent of Rs. 20,97,749) to the book turnover of the assessees, while making the assessment on the best judgment basis Against the said addition of 1 per cent, the assessees filed an appeal before the Appellate Assistant Commissioner, who, however, sustained the addition on the ground that the assessees who are bound to maintain the stock account, have not maintained the same. The matter was taken to the Tribunal and the Tribunal also held that the absence of stock book warranted an addition, but reduced the addition to Rs. 10,000, as against Rs. 20,977. Aggrieved by the order of the Tribunal the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Luxco Electronics v. Commissioner of Sales Tax, U.P. [1981] 48 STC 540. The learned Government Pleader, however, contends that the principles laid down in the above decisions cannot be applied to the facts of this case, where the assessing authority has specifically and expressly rejected the accounts, in the absence of the stock account. He further contends that in the absence of stock account, the quantitative verification of the stocks was not possible at the time of inspection and that when the assessing authority has specifically rejected the accounts, it is entitled to make the best judgment assessment, taking the book turnover and asking an addition thereto towards possible suppression. In Ratna Cafe, Madras-5 v. State of Madras [1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Sales Tax, U.P. [1981] 48 STC 540 applies to the facts of this case. In this case there is a specific observation by the assessing authority in the order of assessment that in the absence of stock account, no quantitative verification of the stocks is possible and therefore the account books are liable to be rejected. If, in the absence of the stock account, which is required to be maintained by the assessees as wholesale dealers under rule 26(9) the truth or correctness of the entries in the assessees' accounts could not be verified then the assessing authority is entitled to reject the accounts and proceed to make best judgment assessment. If the assessing authority has proceeded to make an addition without rejecting the accounts, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ler". If once the assessees are held to be wholesale dealers, then they are bound to maintain stock account under rule 26(9) which provides that every wholesale dealer, importer and manufacturer shall maintain separate stock accounts of goods dealt in by him in his own name and stock accounts of goods dealt in by him as agent separately for each principal so as to enable identification of the goods of the different principals at any given time. In view of the fact that the stock account is a corroborative material to find out the truth or otherwise of the other accounts maintained by the assessees, in the absence of the stock account, the assessing authority was right in rejecting the account books maintained by the assessees in this case. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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