S PERIANNA VATHIAR Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THE assessee is manufacture and dealer in gold and jewellery. For the asst. yrs. 1960-61 1961-62 he reported a taxable turnover of rs. 9, 70, 699-34 and Rs. 11, 99, 784-16 respectively. During the asst yr. 1961-62, on 13th June, 1961, on a surprise inspection, certain account books maintained by two of the goldsmiths employed by the petitioner were recovered. THEy showed that during the asst. yr. 1960-61, the petitioner had entrusted 331 sovereigns to one of the goldsmiths but in the account books of the assessee, only 170 sovereigns had been accounted for. Even these, the AO considered, represented different transactions and not the 331 sovereigns which had been shown in the account books recovered, from the goldsmiths. In view of the large difference, the account books disbelieved and the AO made an addition of 2/3 rds of the turnover returned in lieu of the suppressed sales turnover. In respect of the asst. yr. 1961-62 the account books of the goldsmiths showed that they were entrusted with 61 sovereigns whereas the petitioner had accounted only for 31 sovereigns. Because of this difference, the account books for 1961-62 also were not relied on and so far as the addition towards suppressed turnover was concerned, the AO considered that an addition of 1/3rd of the turnover returned would meet the ends of justice. Accordingly he made the additions in both the years. In respect of these years, the assessee also claimed a small turnover as second sale not liable for tax. On a check of the accounts, the AO considered that the purchase and sales of gold had not been properly accounted for and that the assessee had not established that they represented second sales. Accordingly he rejected that claim of exemption on the ground of second sales. THEse orders were confirmed by the AAC. On a further appeal, the Tribunal also confirmed the finding that the petitioner had not established second sales of bullion and that the accounts of the petitioner were not reliable. So far as the addition was concerned, the Tribunal thought that for 1960-61, an addition of 50 per cent would meet the ends of justice but confirmed the addition so far as 1961-62 is concerned.

(2.) IN this revision, the learned counsel for the petitioner challenges both the findings. The learned counsel was not able to substantiate that the turnover claimed by him as second sales of bullion really related to second sales. The purchase and sale account of bullion had been found to be defective and there was no possibility of determining whether this sales turnover which the petitioner claimed as second sale is really second sale at all. No material also has been placed before us to show that it related to second sales. We accordingly confirm the finding of the Tribunal.