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2016 (8) TMI 1115 - ALLAHABAD HIGH COURT

2016 (8) TMI 1115 - ALLAHABAD HIGH COURT - TMI - Best judgment assessment - Rejection of accounts - Held that:- Assessing authority did not lay its hand or rest his estimation on any material that may have been found in the possession of the assessee. While it was open to him to undertake an assessment to the best of his judgment consequent to the rejection of account, the same could not have been based on surmises and conjectures. It is settled law that while a best judgment assessment necessar .....

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based on any material or evidence that may have been collected or which may have been found during the course of assessment. Such an assessment far from being characterized as one having been made to the best of the judgment of the authority, can only be described as capricious and whimsical. The orders in the opinion of this Court cannot be sustained - Sales/Trade Tax Revision No. 2314 of 2005 - Dated:- 8-7-2016 - Hon'ble Yashwant Varma, J. For the Applicant : Piyush Agrawal For the Opposi .....

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r the U.P. Trade Tax Act, 1948 1948 act. In the absence of the said mandatory account being maintained the assessing authority proceeded to reject the books of account of the assessee. Consequently, proceeding to undertaking a best judgment assessment the purchases effected by the assessee for the relevant year which were disclosed as ₹ 19,993 was enhanced to ₹ 2,00,000. Similarly, the disclosed sale of ₹ 2,13,600 was enhanced to ₹ 3,00,000. It becomes relevant to note th .....

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on. It is his submission that neither the assessing authority nor for that matter the first appellate authority nor the Tribunal have based their estimation on any contemporaneous material which may have been found in the possession of the assessee. He has further drawn the attention of the Court to the findings of the Tribunal which clearly recorded that there was no material or evidence which could have tended to indicate that the revisionist had sought to evade tax and to the circumstance tha .....

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a best judgment assessment can be undertaken in case the assessee fails to maintain a manufacturing account register as mandatorily required under Section 12. This was so held by a Division Bench of the Court in M/S. Agarwal Plastic Industries, Modi Nagar, Ghaziabad v. Commissioner of Sales Tax [1989 U.P.T.C. ­1281. But at the same time, and what the Division Bench also held, the rejection of books of account does not necessarily or invariably command the assessing authority to enhance the .....

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