Smt. Radha K. Gopan vs Commissioner of Agricultural Income Tax

K.S. Paripoornan, J.—At the instance of an assessee to agricultural Income Tax, the Agricultural Income Tax Appellate Tribunal, Additional Bench, Kottayam; has referred the following two questions of law for the decision of this court :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in sustaining the estimate made by the lower authorities on the basis of the details available in the records of C. M. C., Vandenmedu ?

Whether, on the facts and in the circumstances of the case, the Tribunal is justified in finding that the records kept in the auction centre are in the ordinary course of business and there is no reason to disbelieve the same ?"

The respondent is the Revenue. We are concerned with the assessment year 1980-81. The assessee did not maintain any accounts. The Income Tax Officer came to know that the assessee sold 101.300 kgs. of cardamom on October 17, 1979, for Rs. 16,504.30 as per the extract of records kept by the C. M. C., Vandenmedu. Rejecting the return submitted, the assessing authority estimated double the crop that was sold through the C. M. C., Vandenmedu, as the sale for the rest of the period. The total income was fixed at Rs. 37,460 and the tax was determined at Rs. 9,180. The assessee did not file any reply to the pre-assessment notice proposing the estimate. The estimate was made to the best of judgment of the officer. In appeal, the Appellate Assistant Commissioner held that the yield may be fixed at 2 1/2 times totally, found from the extract of records kept by the C. M. C., Vandenmedu. To this extent, quantum relief was given. In second appeal, the Appellate Tribunal held that the assessee kept no accounts, did not file any reply to the pre-assessment notice and the estimate of the yield based on the extract from the C. M. C., Vandenrnedu, as modified by the Appellate Assistant Commissioner was justified on facts. The Appellate Tribunal took the view that the records of the C.M.C., Vandenmedu, show that the assessee sold 101.300 kgs. of cardamom on October 17, 1979, for Rs. 16,504.30, that the above records are kept in the ordinary course of business and in the absence of the accounts of the assessee the material relied on for the best judgment assessment was fair and reasonable. The appeal filed by the assessee was dismissed by order dated August 14, 1987. It is. thereafter at the instance of the assessee that the two questions of law, referred to hereinabove, have been referred for the decision of this court.

We heard counsel. The main plea urged before us was that the copy of the extract obtained by the assessing authority from the C. M. C., Vandenmedu, was not made available to the assessee and the estimate made on that basis is illegal and unreasonable.

We are of the view that there is no force in this plea. The assessee had no accounts. The assessee did not file any reply to the pre-assessment notice. The C. M. C., Vandenmedu, carries on business in cardamom in the usual course of business. Their, records are prima facie acceptable. It showed that the assessee sold 101.300 kgs. of cardamom on October 17, 1979. On knowing this, the assessing authority alerted the assessee and invited objections, if any. The assessee did not reply. A best judgment assessment was made based on the extract for the whole year. We are of the view that, on the facts, in a case where the assessee even failed to send a reply to the pre-assessment notice, the best judgment assessment made on the basis of the details available from the C. M. C., Vandenmedu, was justified. The assessee did not object to the estimate proposed. There is no material to show that the estimate is in any way unfair or unreasonable. The Appellate Tribunal was justified in sustaining the best judgment assessment on the basis of the records kept by the C. M. C., Vandenmedu.

We, therefore, answer question No. 1 in the affirmative, against the assessee and in favour of the Revenue.

This is a case where the assessee was informed by the officer about the records obtained from the C. M. C., Vandenmedu, as the basis of the estimate. The assessee did not file any reply. The officer made the estimate as per the extracts obtained from the C. M. C., Vandenmedu, which showed that the assessee had sold 101.300 kgs. of cardamom on October 17, 1979. There is no error in adopting such a course.

In the light of the above facts, it is unnecessary to answer question No. 2 in the way in which it has been formulated. Suffice it to say that on the facts of this case, the records obtained from the C. M. C., Vandenmedu, formed sufficient material for the best judgment assessment and the assessing authority was justified in relying on the same, especially in the absence of a reply to the pre-assessment notice. We decline to answer question No, 2 in the form in which it is formulated ; but hold the view that the records kept in the C. M. C., Vandenmedu, and which formed the basis for the best judgment assessment, are a valid piece of material which was properly relied on by the assessing authority.

The reference is answered as above.

A copy of this judgment under the. seal of this court and the signature of the Registrar shall be sent to the Kerala Agricultural Income Tax and Sales Tax Appellate Tribunal, Additional Bench, Kottayam.