TMI Blog1994 (11) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... leged that the inspection on May 16, 1987 revealed discrepancy between the stock on hand and the stock as per the accounts, the value of which was determined at Rs. 49,293. The assessing authority rejected the accounts in consequence and made an addition of 60 per cent of the returned turnover towards omissions and suppressions. That amounted to Rs. 2,80,73,389. On appeal the Deputy Commissioner confirmed the rejection of the accounts, but reduced the addition to 30 per cent of the turnover conceded. The Appellate Tribunal on second appeal felt that the addition was excessive and reduced it to 2 per cent of the turnover conceded. Petitioner contends that this addition is excessive. 3.. We heard the counsel for the assessee and also counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een entered in the accounts. The assessee's case was that it had received the jewels from Nellore just before the inspection on September 2, 1988 and had kept them separate for verification of the purity, quantity and quality. So also the Bombay jewels. It was for this reason that these jewels had not been entered in the books by the time the inspection took place on September 2, 1988. In the view that these jewels had been deliberately suppressed from the accounts, and that it was suppressed stock, the assessing authority held the stock discrepancy to be Rs. 10,61,289, by adding the value of the stock received from Nellore and Bombay, viz., Rs. 8,63,952 to the stock discrepancy of Rs. 1,39,637 noted on inspection. In consequence the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubstantial grievance that the Intelligence Officer and the assessing authority had wrongly proceeded to treat the gold received from Nellore and Bombay valued at Rs. 8,63,952 as unaccounted stock. The assessee therefore submits that even if there is a case for estimation of turnover, it cannot be to the extent sustained by the Appellate Tribunal of an addition of over Rs. 2.5 crores. 7.. We shall first deal with the question whether the stock received from M/s. Shantilal Sons, Nellore, could be treated as unaccounted or suppressed stock of the assessee. The assessee's case was that the jewels were received from M/s. Shantilal Sons on September 2, 1988, after they were despatched from Nellore through messenger on August 31, 1988. The j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llore to Ernakulam. We are therefore of the opinion that the Tribunal was wrong in rejecting the explanation put forward by the assessee regarding the non-accounting of these jewels received from M/s. Shantilal Sons, Nellore, in the records at the time of inspection. The explanation according to us is valid and should have been accepted by the Tribunal. 8.. Similar is the case of the jewels received from Bombay. No doubt the issue voucher is dated August 17, 1988 and it contains the seal of the Bombay excise. The jewels were received by the assessee only long later. This voucher was also available at the time of inspection. In the circumstances, we do not find any reason not to accept the assessee's explanation, as in the case of the Ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the assessee to the best of judgment and the whole of the difference cannot be treated as suppressed stock. This factor is one relevant to be considered while estimating the turnover of the assessee for the year. 11.. A perusal of the orders of the authorities below shows that none of them had applied its mind to this aspect of the matter. We have already mentioned that the authorities below proceeded on the basis that the stock received from Nellore and Bombay is also an item of suppressed stock and that it has to be taken into account in estimating the turnover. We have accepted the explanation of the assessee regarding this stock and therefore that item has to be eschewed from consideration while estimating the turnover. So far a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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