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TMI Blog2006 (9) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... . Kamath Restaurant, one of the restaurants run by the appellant on March 13, 1995. During the course of inspection, the Intelligence authority verified the books of account and pointed out that the appellant has not reported the actual turnover and threatened the appellant that he would initiate criminal prosecution against the appellant. The Intelligence authority offered an opportunity of compounding the alleged offence of the appellant. The appellant chose to pay the compounding fee though it did not admit any suppression of turnover. Cheques were issued to the Intelligence authority as payment of advance tax. The assessing authority based on the intelligence report proposed to determine the turnover by adopting five times of the establ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al authority initiated suo motu revisionary proceedings in terms of section 22(1) of the Act. Reply submitted by the assessee was rejected and the impugned order was passed. It is in these circumstances, appellant is before us. Heard the learned counsel for the parties. Learned counsel for the appellant would take us through the material on record to say that the exercise of revisional power is wholly unnecessary and uncalled or in the given circumstances. He would say that compounding of offence by the assessee cannot be the basis for the purpose of reassessment as sought to be done in the case on hand. Similarly, he would also say that mere suppression of coconut expenses cannot be the basis for five times assessment as sought to be don ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a revised assessment order. Against these two orders, appeals were filed by the assessee. The appellate authority considered both the appeals and passed a common order. The appellate authority noticed that there was no adverse inspection report or any incriminating material found in the assessment records for both the years. The appellate authority noticed the judgment of this court in the case of Hotel Mayura Restaurant v. Assistant Commissioner of Commercial Taxes [2000] 119 STC 84; [2000] 48 Kar LJ 120 and after noticing the said judgment, the appellate authority partly allowed the appeal and directed to respondent to add the purchase turnover of coconuts estimated for both the years to the declared sale turnover and re-compute the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shment expenditure. The revising authority was of the view that on scrutiny of list of purchases it was noted that the actual purchase of coconut are noted at Rs. 18,250 and Rs. 50,265 for the years 1995-96 and 1996-97, respectively, which could be added back to the taxable turnover to be determined as discussed above and the assessment modified accordingly. Having noticed this, it is surprising for us to note that he has chosen to uphold the order of the assessing authority. Section 22A would provide for revision in the matter. Revising powers can be exercised in a reasonable manner. When the appellate authority noticed the errors and has chosen to pass an order for reconsideration, the revising authority would not be justified in enhancin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the revising order on the facts of this case. At this stage, we must also notice a recent judgment of this court reported in Hotel Mayura Restaurant v. Assistant Commissioner of Commercial Taxes [2000] 119 STC 84 wherein this court held as under: "Times have changed and the cost of materials have changed and the formula which is so far applied may not be universally applicable. There must be some reasonable nexus to the available material. The best judgment assessment and determination must be based on some evidence on record." The said judgment is equally applicable to the facts of this case particularly in the light of the assessing authority passing an order based on admission, without taking note of the relevant mater ..... X X X X Extracts X X X X X X X X Extracts X X X X
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