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Sholamal Zalim Singh vs Commissioner Of Sales Tax

High Court Of Judicature at Allahabad|27 March, 1974

JUDGMENT / ORDER

JUDGMENT Satish Chandra, J.
1. The assessee is a dealer in utensils and scrap. For the assessment year 1968-69 he disclosed his sales at Rs. 1,09,828.68. The assessing officer disbelieved the accounts and determined the turnover at Rs. 3,00,000. In appeal the turnover was fixed at Rs. 2,50,000. The assessee then went up in revision. The revising authority rejected several of the grounds upon which the departmental authorities had rejected the assessee's books of account. It held that the parcha, which is paper No. 18 of the seized documents at the survey held on 26th November, 1968, did not represent a completed transaction and the explanation furnished by the assessee was acceptable. The same was the case with the other six parchas which related to polish expenses. The revising authority upheld the rejection of the account books on the ground that there was shortage in the till by Rs. 1,600 as compared to the cash shown in the account books. With respect to this discrepancy the explanation of the assessee was that on the previous day he had taken the entire cash to his house, had left Rs. 1,600 there and had brought back only the balance to his shop on that day. The Judge (Revisions) held :
I find the explanation of the assessee unsatisfatory. The account books do not show that the assessee had taken any amount to his house. The account books should show every transaction of cash. It may be pointed out that the contention of the department that a sum of Rs. 1,600 was utilised for suppressed transaction cannot be ruled out.
2. On this view the revision was dismissed. At the instance of the assessee the following questions of law have been referred for opinion to this court:
(1) Whether there was any material for rejecting the assessee's account books ?
(2) Whether there was any material for the assessment of turnover at Rs. 2,50,000 ?
3. The revising authority does not refer to any rule or any commercial practice under which it is obligatory for a businessman to note down the amount of cash that he was taking to his home and bringing the same back. It has not been found that it was the general practice adopted by the assessee in the past. The fact that the account books did not show that the assessee took any amount to his house was, in our opinion, irrelevant. The account books are not required to show the taking of the money at the end of the day and thereafter being brought back to the shop the next day. The view that the account books should show every transaction of cash and that the sum of Rs. 1,600 was utilised for suppressed transaction at the shop is irrelevant. The contention of the department that a sum of Rs. 1,600 was utilised for suppressed transaction does not have any material in its support and is a pure guess work. In our opinion, this contention had no relevance to the credibility of the account books as such. The account books could not validly be rejected on such hypothetical grounds.
4. Our answer to the first question is in the negative, in favour of the assessee and against the department. In view of this answer, question No. (2) does not arise and is left unanswered. The assessee is entitled to costs which we assess at Rs. 100. Reference answered accordingly.
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Title

Sholamal Zalim Singh vs Commissioner Of Sales Tax

Court

High Court Of Judicature at Allahabad

JudgmentDate
27 March, 1974
Judges
  • S Chandra
  • H Seth