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TMI Blog2009 (8) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... 27,586 on the ground that the assessee had paid huge amount of compounding fee for not carrying the bill is legally sustainable? (ii) Whether the reduction of second penalty by the Tribunal is valid in law? The assessee was engaged in manufacturing of silver anklets. The assessee reported a total and taxable turnover of Rs. 4,88,592 in form I for the assessment year 1994 to 1995. As against the assessee, the enforcement wing officials registered a case for transportation of 40.140 kgs of silver anklets which were not supported by any records and collected tax surcharge and compounding fee. When the enforcement wing officials inspected the place of business of the assessee on September 7, 1994, various defects were noted, including an exce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Government Advocate appearing for the State contended that compounding fee having not been reduced by the revisional authority, taking note of the equal addition and the consequent tax liability, there should have been no further indulgence shown to the assessee in the matter of equal addition. According to the learned Government Advocate, when the assessee failed to maintain the statutory account books and other records as expected of it, there was only justification for the assessing authority to have made an equal addition in order to ensure that there was no falsification of the accounts. The learned Government Advocate referred to the decision reported in Commissioner of Sales Tax, Madhya Pradesh v. H.M. Esufali, H.M. Abdulali [1973] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereunder: ". . . While making reassessments on the basis of the information gathered from the bill book seized, the Sales Tax Officer rejected the accounts maintained by the assessee as unreliable and assessed the assessee on the basis of his 'best judgment'. The distinction between a 'best judgment' assessment and assessment based on the accounts submitted by an assessee must be borne in mind. Sometime there may be innocent or trivial mistakes in the accounts maintained by the assessee. There may be even certain unintended or unimportant omissions in those accounts; but yet the accounts may be accepted as genuine and substantially correct. In such cases, the assessments are made on the basis of the accounts maintained ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration local knowledge and repute in regard to the assessee's circumstances, and his own knowledge of previous returns by and assessments of the assessee, and all other matters which he thinks will assist him in arriving at a fair and proper estimate; and though there must necessarily be guess-work in the matter, it must be honest guess-work." A reading of the principles set out by the honourable Supreme Court will make it clear that even while rejecting the account placed by the assessee as unreliable, while at the same time when the assessing officer gather very many details from the accounts as well as from other materials on which the assessing officer could place his hands, apart from gathering other information relating to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,09,600 to which the taxable turnover reported by the assessee was added and the total taxable turnover was estimated at Rs. 15,98,191. When the aid action of the assessing officer was examined by the Tribunal, the Tribunal, at the outset, noted that there was no incident of the assessee carrying goods without any bills in the past. In other words, the Tribunal found that there was no continuous pattern of suppression adopted by the assessee which warrants imposition of any additional amount, much less equal addition over and above the estimated suppression made by the assessing officer. In our considered opinion, such an approach made by the Tribunal was perfectly justified and consequently, the scaling down of the amount towards probable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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