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2018 (4) TMI 648

incriminating records recovered from the residence of one of the partners pertain to the transactions in jewellery and it is not proved by the department that the partner himself did such business. - Held that: - there is no material irregularity or illegality in appreciation of the evidence, both by the Appellate Authority and Tribunal - Respondent is not a dealer of Silver and Gold Jewellery. - Assessing Officer has assessed the turnover, relating to silver and gold, as if they relate to the business of the respondent dealer. There is no perversity in the finding. There is no irregularity or illegality, warranting reversal of the order of the Tribunal. - Tax case revision dismissed. - T. C. (R). No. 44 of 2018 - Dated:- 16-3-2018 - S. Manikumar And V. Bhavani Subbaroyan, JJ. For Petitioner : Mr.V.Haribabu ORDER ( Made by S. Manikumar, J. ) Tax Case Revision is filed to revise the order of the Sales Tax Appellate Tribunal (Additional Bench) Chennai, dated 11.03.1997 passed in Tribunal Appeal Number 688/96 and Tribunal Miscellaneous Petition number 22/97. 2. Short facts leading to the Tax Case Revision are that the respondent, Tvl. Aditya Enterprises, dealers in Electri .....

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m, it is for the respondent to explain as to how the records came to be recovered from the residence of the partner. 9. Heard the learned Additional Government Pleader (Taxes) and perused all the materials available on record. 10. The Appellate Assistant Commissioner (CT) - II, Madras, vide order dated 01.12.1995, discussed and answered the issues and modified the order of the Assessing Authority, as hereunder:- 9. The first issue in this appeal pertains to the actual suppression. The actual suppression is based on the records recovered during the course of inspection and sales of jewellery by the appellant. Though the appellant had denied that they had done any transaction in jewellery as they dealt basically in electrical goods only. But, nevertheless, the transactions noted in the slips had been cross verified by the Enforcement Wing Officer as well as the assessing authority and in as much as records were recovered from the place of business and residence of the partner of the appellant firm there is no gain saying in the fact by the appellant that they have no connection with the recovered records. In fact, they failed to offer convincing explanation as to how the records came .....

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on for the ensuring period as the inspection period covered both the financial years in full and in 92-93 the period left after inspection was very little so as to suggest probable suppression apart from what has been suppressed in the incriminating records. 13. Further, another point needs for consideration is the nature of business of the appellant. The appellant were basically dealers in electrical goods and they had been assessed on electrical goods accordingly. The incriminating records showed the case of gold and silver articles. Though the appellant denied any nexus with the recovered slips but the plea could not be accepted by the assessing officer since the recovery of the records was made from the residence of one of the partners and the liability had to be fastened on the appellant firm. There is no corroborative evidence to suggest that the appellant had similar unreflected transactions in such goods other than what had been found in the incriminating records so as to make the case for probable omission. 14. It is further point that the recovery of records was sequal to search of residence of Thiru.S.Prabhakara Rao, partner of the appellant firm i.e. Aditya Enterprises. .....

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ust be possible first to come to the conclusion that there was actually the turnover which was not disclosed. The mere fact of best judgment assessment particularly when the assessment is based on the interference from the inability the purpose of imposition of penalty is of a much higher order than that required for the purpose of making best judgment assessment. 18. So far as the levy of penalty is concerned, the assessing authority is justified as the incriminating records had been scrutinesned and were brought forth the turnovers suppressed and the case of undisclosed turnover cannot be 1st off lightly. The need to invoke the penalty provisions of the Act stands justified. But so far as the quantum of penalty imposed is concerned it needs interference as the assessing authority had imposed in penalty notwithstanding the fact that the transactions business activity of the appellants and that the records recovered were not from the business premises but only from the residence of the partner. In the case reported in 69 STC 170 and 77 STC 118 it was laid down by the Courts of Law that the quantum of penalty should depend upon the gravity of offence and circumstances of the case, s .....

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number of records were recovered. The transaction as per the books marked A, B,C,D,E,F,G and H were duly accounted for in the accounts of the appellants. Those transaction relate to business of electrical goods. But the book 'C' constrains transactions in silver and gold jewellery. The appellants are not dealers in jewellery. Without proper investigation and probe, the assessing officer assessed the turnover relating to the gold and silver jewelleries as if they relate to their business. He further submitted as the turnover does not relate to the business penalty levied under Section 16(2) is also not legally valid. He has also filed detailed counter to the Enhancement Petitions. 5. We have heard the arguments of both sides and perused the connected records. 6. The assessing officer revised the assessment based on the details of the transactions as seen from book marked 'C'. The appellant deals the transactions. We have perused the records and found that book marked 'C' is nothing but bundle of slips. There are 22 slips. All the slips contain the transaction of gold and silver articles. These slips also certain expenses payment to various persons including l .....

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did huge business clandestinely. Even on the above assumption the assessing office did not probe and investigate. The only reason relied on for the assessment is that the records recovered from the residence of Thiru.Prabahar Rao partner of the above firm. The appellants from the beginning stated that the guests who attended their family function would have left these papers. In the absence of investigation by the department we find that there is a force in the argument of the appellant. The assessing officer did not take any steps of efforts to connect the transaction as per the slips to the transactions dealt by the appellants. The appellants are exclusively dealing in electrical goods. So it is highly imaginery to come to the conclusion that the electrical dealers would have done such huge business in jewelleries without any infrastructure. In the absence of any categorical investigation, probe and enquiry, we are unable to accept the assessment made by the lower authorities on the basis of the records which contain different transactions not connected with the regular business of the appellants. We, therefore delete the assessment made in the revision proceedings for both year .....

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