TMI Blog1983 (8) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... s certain exemptions claimed were disallowed and also after taking into reckoning the spot inspection reports finding certain variations, some amounts were added to the turnovers. The petitioners also disclosed voluntarily, in the case of T.R.C. No. 39 of 1981 Rs. 25,000 worth of stock and in the case of T.R.C. No. 27 of 1981 Rs. 35,000 worth of stock. Hence, notices were given to show cause as to why they should not be subjected to best judgment assessments. Replies to the notices were furnished and thereafter the Commercial Tax Officer turning down the claims and objections raised by the petitioners, assessed them by adding the entire value of the stocks that were disclosed by the petitioners and determined the tax thereon. It is that add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealer and on verification modified the net turnover to Rs. 2,64,985.95. Then, on the basis of the inspection report wherein he found certain variations regarding sales of certain motor parts, he estimated the probable suppression at Rs. 1,600. Thereafter, the dealer voluntarily disclosed Rs. 25,000 said to be the value of goods credited to the capital account and debited to the goods account and purported to have been done on the ground of his voluntarily disclosing income under Act No. 8 of 1976. To this a notice was issued on 11th August, 1976, directing the dealer to file objections, which were filed on 23rd August, 1976. In the objections it has been stated inter alia; "Item: Rs. 28,750.00: In the show cause notice it is proposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore adjudicating, the facts pertaining to this item of voluntary disclosure, since there were divergent views as to the mode reflecting in the books of account vis-a-vis the goods valued at Rs. 25,000 whether actually purchased and also sold or is it a mere book entry by debiting the goods account, may be cleared. Sri Venkataramana, the learned counsel for the department, based on the observation of the Commercial Tax Officer in his assessment order, viz., "the dealer disclosed voluntarily Rs. 25,000 worth of stock which are not accounted for in their accounts", and also that of the Appellate Tribunal, viz.: "It is admitted before us that the appellants had certain undisclosed and unaccounted stocks. The plea denying liability to sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year, as these goods attract tax at the point of first sale, the same cannot be reckoned as forming part of the turnover. Therefore, the principal question is whether the stock worth Rs. 25,000 or the value thereof, disclosed under voluntary disclosure scheme, has been actually sold during the year in question, so as to form part of the turnover; and so on whom the onus lies? Before adjudicating, we may usefully refer to the decision of the Supreme Court in Girdhari Lal Nannelal v. Sales Tax Commissioner [1977] 39 STC 30 (SC) wherein the facts in short were that a cash-credit entry of Rs. 10,000 in the account books of the appellant-firm in the name of the wife of one of its partners was treated as income of the appellant o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les. In the absence of such material, the mere absence of explanation regarding the source of the amount would not justify the conclusion that the amount represented profits of the appellant deriving from undisclosed sales". The observations of the Appellate Tribunal, viz., it is admitted before us that the appellants' had certain undisclosed and unaccounted stocks. The plea denying liability to sales tax in respect of such stocks can legitimately be canvassed on the following grounds: (i) that the goods held in stock are not at all liable to tax either at the point of purchase or at the point of sale or such goods qualify for exemption under section 8 or 9 of the A.P.G.S.T. Act, (ii) that the taxable event did not take place during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , viz., 1975-76. The said disclosure in order to attract the sales tax, the department is obligated to establish by evidence that it pertains to the sales of the goods purchased and that too during that assessment year. None of these two has been established, and therefore, it would not be within the purview of the Revenue to add this item to the total turnover of the assessee. From the foregoing, it is quite evident that the addition of turnover of Rs. 28,750 to the turnover of the petitioner-assessee herein is illegal, and therefore, the same has to be set aside. In the circumstances, the order under revision is set aside to the extent of item of Rs. 28,750 as added to the total turnover of the petitioner herein. Consequently the Commer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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