Sri Ramu Furniture Company vs State of Tamil Nadu

Chitra Venkataraman, J.—The assessment year under consideration is 1996-97. Based on the inspection conducted in the business premises on March 6, 1997, the assessing officer passed best of judgment assessment on the assessee, apart from levying penalty. The assessee filed an appeal before the Appellate Assistant Commissioner, who deleted the equal time addition. Considering the fact that the inspection was at the fag end of the year; that there were no other materials to justify the equal time addition, the Appellate Assistant Commissioner cancelled the penalty levied u/s 12(3)(b) of the Tamil Nadu General Sales Tax Act. Aggrieved by the same, the Revenue came on appeal before the Sales Tax Appellate Tribunal. The only ground on which the Tribunal restored the equal time addition was the results of the inspection made on February 18, 1999, during the course of the subsequent assessment year 1997-98. Barring that, there were no other materials to restore the equal time addition. It is no doubt true that in the assessment year under consideration, there was an inspection done on March 6, 1997. Except for the deficiency in stock of goods not supported by purchase bills, there were no other materials, which warranted equal time addition towards probable omission. Taking note of the facts therein, the first appellate authority rightly cancelled the equal time addition. The fact that in the subsequent year, there was an inspection, which revealed suppression, by itself, would not be a good ground for sustaining the equal time addition in respect of the assessment year 1996-97. The materials available, hence, have to be looked at as relevant to the transaction to the assessment year under consideration alone. In the absence of any justification to draw inference from the subsequent year''s transaction, we do not find any good ground to uphold the order of the Tribunal. Consequently, the order of the Tribunal restoring the equal time addition stands set aside and the corresponding penalty also stands set aside. Accordingly, the appeal stands allowed. No costs.