PRAKASH AUTOMOBILES Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) HEARD Counsel for the appellant and standing Counsel for the respondent. We do not find any of the questions raised is a question of law, much less any substantial question of law. Assessments involved are for the assessment years 1994 -95 to 1997 -98. Even though assessee is an automobile dealer and obviously registered under the KGST Act, the assessee maintained the stand for several years that it is not in the habit of keeping books of account. Income -tax returns were filed for all these years on estimation basis by the assessee. Since the assessee has no case that it had maintained books of account, it had no right to challenge the assessment based on estimation basis. In the absence of books of account the Assessing Officer is free to conduct enquiry and estimate income on a rational basis under Section 144 of the Income -tax Act. In this case, instead of collecting information, the Assessing Officer adopted the turnover fixed for the year 1988 -89 at Rs. 16 lakhs, which has become final, as the basis for completion of assessments. He made a progressive addition to the turnover at the rate of Rs. 2 lakhs each for every year and estimated the income at 8 per cent, of the turnover. The Commissioner of Income -tax (Appeals) was very considerate because he reduced the addition from Rs. 2 lakhs every year to Rs. 1 lakh for every year. On further appeal, the Tribunal still showed leniency and fixed the turnover at Rs. 15 lakhs for all the years which is less by Rs. 1 lakh from the turnover finally assessed for 1988 -89. Even though counsel for the appellant contended that the assessee's business was in automobiles and new generation of vehicles have rendered his business unviable and there was fall in turnover, we are surprised to note that still the assessee did not choose to maintain books of account probably because it suits them. In our view, it would be virtually impossible for a dealer under Section KGST Act to carry on business in automobiles spares without registration and without maintaining books of account because goods are brought from outside Kerala, and transported across the State for sale. We see no reason why the assessee could not produce books of account maintained before the income -tax authorities. We, therefore, do not find any justification to interfere with the order of the Tribunal. Even though counsel for the appellant submitted that for sales tax verification certain books of account are maintained and the same should have been relied on, we do not think there is any merit in this claim because accounts are one and the same, whether it be for sales tax or income -tax of the assessee. The assessee admittedly does not maintain proper books of account. We therefore reject these appeals.