The High Court of Allahabad held that non-presentation of the books of accounts at the time of the survey cannot be the sole reason for rejection of the books of accounts.
For the assessment year, 2008–09 the assessee filed returns, however, the Assessing Authority rejected the books of accounts and assessed the assessee on the basis of a survey report.
The revisionist being aggrieved by the assessment order preferred the First Appeal before the Additional Commissioner (Appeals) Commercial Tax. The First Appellate Authority allowed the appeal in-part deleting the turnover in respect of alleged purchase and sale of coal made from unregistered dealers on the ground that there was no material whatsoever to make the additions as was made by the assessing authority in this regard. The First Appellate Authority, however, maintained the average selling rate which was fixed by the assessing authority as well as the order with regard to the rejection of the books of accounts.
Against the order passed by the Additional Commissioner (Appeals) Commercial Tax, Ghaziabad, the assessee as well as the Revenue preferred a Second Appeal before the Commercial Tax Tribunal. The tribunal has allowed the appeal in part filed by the assessee, upholding the rejection of books of accounts and the estimate of turnover, but on the other hand, reduced the net turnover.
The Tribunal has upheld the rejection of books of accounts, considering the fact that at the time of survey no books of accounts were produced and further that stock of Coal weighing 7-8 tonnes which were found could not be verified from the account books.
The single-judge bench of Justice Alok Mathur observed that though the Tribunal has recorded that the books of accounts were duly presented when the show cause notice was given to the assessee, and no discrepancy was found in the same, but non-presentation of the books of accounts at the time of survey cannot be the sole reason for rejection of the books of accounts.
“Though the Tribunal has recorded that the books of accounts were duly presented when the show cause notice was given to the assessee, and no discrepancy was found in the same, but non-presentation of the books of accounts at the time of survey cannot be the sole reason for rejection of the books of accounts. The order of the Tribunal in this regard deserves to be set aside and be remanded to it for fresh adjudication,” the bench said.
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