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2016 (7) TMI 879 - KERALA HIGH COURT

2016 (7) TMI 879 - KERALA HIGH COURT - TMI - Estimation of sales turnover - demand of sales tax / VAT - suppressed sales - Held that:- though the basis of the estimation of the gross profit is the profit as disclosed in the sale bills, when this proposal was conveyed to the assessee in the show cause notice and thereafter, the assessee had the opportunity to produce his books of accounts, including the sale bills. Despite the availability of such opportunities at no stage of the proceedings, the .....

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ion, certain bills were recovered, which disclosed the average gross profit of 80% and its genuineness is not disputed. In such a situation, we are not prepared to find fault with the Revenue in estimating the turnover tax by taking the gross profit as disclosed in the bills that were recovered. Further, the assessee cannot have any grievance, since the gross profit has now been reduced to 50% against the declared gross profit of 41.32%. - Appeal dismissed - Decided against the assessee. - ST. R .....

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gh the penalty was sustained, addition of gross profit at 80% was modified and reduced to 50% on the purchase price. In the further appeal filed by the assessee before the Tribunal, the Tribunal passed Annexure C order dismissing the appeal. It is aggrieved by these orders, this revision has been filed. 2. We heard the learned Senior Counsel appearing for the revision petitioner and the learned Government Pleader appearing for the respondent. 3. The assessee conducts a bar attached hotel at Irit .....

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sale book etc., were not produced either at the time of inspection or at the time of verification of the books of accounts. On Verification of the statement of accounts, it was revealed that the gross profit reported was 41.32%. On verification of some of the bills recovered, it was disclosed that the average rate of gross profit was 80%. In such circumstances, after completing the procedural formalities, the Intelligence Officer added 80% towards the purchase price of the goods sold during the .....

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Act, the Officer did not have any power to fix taxable turnover. Though this contention, in principle, seems to be supported by the provisions of the Act and the decisions cited, on facts what we find is that the provisions or the judgments relied on have no relevance. As we have already stated, the reported gross profit was 41.32%. But, the verification of the recovered bills disclosed that the average rate of gross profit was 80%. On that finding, all that the Intelligence Officer has done is .....

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he Assessing Officer. 5. Further, if the contention now raised by the learned Senior Counsel is accepted, that would render Section 45A itself otiose and ineffective. Therefore, we reject the first contention raised by the learned counsel. 6. The second contention raised was mainly with respect to the manner in which the gross profit was arrived at 80%. According to the learned counsel, this percentage was arrived at merely with reference to few bills that were recovered during inspection. It is .....

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ade to Hotel Vallalar v. The Registrar, Tamil Nadu Taxation Special Tribunal, Chennai and others [2008] 15 VST 516 (Mad) of Madras High Court. This judgment also takes the view similar to the judgment in Hotel Ashok Bhavan (supra). He also contended that the law does not expect the traders to earn maximum profit out of their transactions and that on the basis of mere assumptions and presumptions, addition cannot be made. In this connection, the learned counsel placed reliance on the judgment of .....

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