VAT Dept cannot Suspect Purchases Due to Minor Discrepancies in Books: Allahabad HC [Read Order]

The Allahabad High Court, in a recent ruling, held that the VAT department cannot suspect the genuineness of the purchases due to minor discrepancies in the Books of Accounts.

The assessee, M/S Jaiswal Machinery Stores contended that a survey was conducted by SIB Unit on 21.06.2011. On the basis of the survey so made, assessing authority rejected the books of accounts of the assessee and made an addition of tax of Rs.10,34,000/-. Against the assessment order, a first appeal was preferred which was dismissed by the first appellate authority. The order of the first appellate authority was upheld by the Commercial Tax Tribunal.

Before the Single bench, the assessee contended that the Tribunal on the one hand accepted the fact that there was no major discrepancy from the loose papers found during survey with the books of accounts so submitted by the assessee during the assessment but only partly allowed the appeal and reduced the quantum of tax to Rs.2,82,125/-. According to them, once the Tribunal had recorded a finding that there was no discrepancy in the books of accounts, it was not justified in partly allowing the appeal and entire tax as imposed by the assessing authority should have been set aside.

Justice Rohit Ranjan Agarwal held that “It is not in dispute that the Tribunal has reduced the quantum of tax imposed by the assessing authority from Rs.10,34,000/- to Rs.2,82,125/-. From the perusal of the order passed by the Tribunal, it is apparent that finding recorded is contradictory. On the one hand, the Tribunal has accepted that there were minor discrepancies in the books of accounts submitted by the assessee from the survey report and on the other hand, had accepted the partial finding recorded by the assessing authority. Once the Tribunal has recorded finding that there was a minor discrepancy in the stock which was there at the time of survey and it tallied with the books of accounts then there was no occasion to take a different view.”

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates