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M/S Ram Swaroop Radha Raman Kanpur v. The Commissioner, Of Trade Tax U.P. - SALES/TRADE TAX REVISION DEFECTIVE No. 1607 of 1998  RD-AH 3062 (19 September 2005)
TRADE TAX REVISION NO.(1607) of 1998
TRADE TAX REVISION NO.(1609) of 1998
TRADE TAX REVISION NO.(1616) of 1998
M/S Ram Swaroop Radha Raman, Kanpur. Applicant
The Commissioner, Trade Tax, U.P., Lucknow. Opp.party
Hon'ble Rajes Kumar, J.
Present three revisions under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") are directed against the order of Tribunal dated 7th August, 1998 relating to the assessment years, 1973-74, 1974-75 and 1975-76.
The applicant claimed that it was carrying on the business of scrap only and was not carrying on any business of utensils. For the assessment year1973-74, the applicant had been assessed to tax under section 7 of the Act on the disclosed turnover of metal scrap. A survey was made on 09.12.1974 by the Sales Tax Officer, SIB at the shop of the applicant. Apart from the other books of account one small diary was seized in which the sale of utensils for the assessment years 1973-74 and 1974-75 were found. It was also found that the rent of Rs. 75/- was paid to one Dr. P.D. Agrawal in respect of the godown situated at 67/73, Daulatganj, Kanpur. Thus, on the basis of the seized diary, proceeding under section 21 of the Act was initiated for the assessment year 1973-74 and regular assessment proceeding was initiated for the assessment year 1974-75. The dealer was confronted with the diary seized during the course of assessment proceeding. The dealer did not deny that the alleged diary was seized from the business premises of the shop. However, he had stated that it did not belong to it and some enemy might have left at the Godown. In support of his contention, he filed an affidavit. The assessing authority made enquiry from Dr. P.D.Agrawal and also made survey at the shop situated at 67/73, Daulatganj, Kanpur on 31st March, 1974 in which the old utensils and scrap were found. The enquiry was also made from Dr. P.D. Agrawal in which he has also admitted to have given the godown on rent to Sri Ram Swaroop. On the basis of these materials, it had been inferred that the alleged diary belongs to the applicant and the godown was taken on rent, which had not been disclosed by the applicant. The assessing authority found that in the diary, there was an entry of opening stock of utensils at Rs.1,03,200/-, cash balance of Rs. 7,400/- and the deposit of Rs.55,000/- and Rs.49,000/- in the name of Ram Ashrey and Ram Swaroop respectively. It was also found that for the eight months relating to the assessment years, 1974-75, there was entries of sales of utensils for Rs.3,03,286.30 paise and scrap for Rs.1,81,228.85 paise. On the basis of these materials, the assessing authority estimated the suppressed turnover at Rs.7 lacs consisting of turnover of utensils at Rs. 5 lacs and scrap at Rs. 2 lacs for the assessment year 1973-74. For the assessment year 1974-75, the assessing authority estimated the turnover at Rs.8 lacs consisting of turnover of utensils at Rs.5 lacs and scrap at Rs.3 lacs. For the assessment year, 1975-76, as against the disclosed turnover of scrap at Rs.24,005/-, the assessing authority estimated the taxable turnover at Rs.3 lacs consisting of turnover of utensils at Rs. 2 lacs and scrap at Rs.1 lac. Applicant filed appeals before the Assistant Commissioner (Judicial), Sales Tax, Kanpur who had allowed all the appeals in part. The appellate authority has sustained the turnover of the scrap estimated by the assessing authority for all the three years but deleted the turnover of utensils for all the years. The appellate authority held that in the diary there were entries in the name of Ram Swaroop and Ram Ashrey which shows that the business of utensils had been carried in partnership by Ram Swaroop and Ram Ashrey and not in a proprietorship of the Ram Swaroop and, accordingly, the turnover of utensils estimated by the assessing authority had been deleted. The first appellate authority further found that the godown situated at 67/70 Daulatganj, Kanpur belongs to the applicant, which had not been disclosed. Against the order of the first appellate authority, applicant as well as Commissioner of Trade Tax filed appeals before the Tribunal. Tribunal by the impugned order rejected the appeals of the applicant and allowed the appeals of the Commissioner of Trade Tax. The Tribunal has set aside the order of the first appellant authority and restored back the order of the assessing authority.
Heard counsel for the parties.
Learned counsel for the applicant submitted that the Tribunal has erred in treating the diary belonging to the applicant business and holding that the applicant was involved in carrying on the business of utensils while at the time of various surveys, stock of utensils were never found. He further submitted that the alleged diary did not belong to the applicant business and has been illegally treated as relating to the business of the applicant. He further submitted that the alleged godown situated at 67/73, Daulatganj, Kanpur was also not of the applicant and it has been illegally treated as belonging to the applicant and the estimate of the turnover is highly excessive. For the assessment year 1975-76, he submitted that there was no material on record to show that the applicant had carried on the business of utensils. The business has been closed on 24.10.1975, therefore, the estimate of turnover of utensils for the assessment year 1975-76 is without any basis. Learned Standing Counsel relied upon the order of the Tribunal.
I have perused the order of the Tribunal and the authorities below. I do not find any substance in the argument of the learned counsel for the applicant that the alleged diary found at the time of survey did not belong to the applicant. Admittedly, the alleged diary was found from the business premises of the applicant, therefore, burden lies upon the applicant to prove that the said diary did not belong to him. No evidence has been adduced to prove that it did not relates to the applicant while in the diary, the name of the applicant was found. The deposit of Rs.49,000/- was found in the name of Ram Swaroop. Further in the diary, there was an entry relating to the payment of rent at Rs.75/- for premises situated at 67/73, Daulatganj, Kanpur which was related to Dr. P.D.Agrawal and on enquiry from Dr. P.D. Agrawal, it was found that the said premises was given on rent to the applicant and at the time of survey stock of old utensils and scrap were also found. The finding of the Tribunal and the assessing authority that the alleged diary belongs to the applicant and relate to the business of the applicant cannot be said to be unjustified. First appellant authority has illegally, on the basis of deposits in the name of Ram Swaroop and Ram Ashrey held that the business of utensils was carried on in partnership of Ram Swaroop and Ram Ashrey. While it was not the case of the applicant that any business in partnership had been carried on in the name of Ram Ashrey and Ram Swaroop. Further merely on the basis of deposit of the amount in the name of Ram Ashrey and Ram Swaroop, it could not be inferred that the business in partnership by Ram Ashrey and Ram Swaroop had been carried on. The Tribunal has rightly set aside the finding recorded by the first appellate authority in this regard.
Now coming to the estimate of the turnover. So far as assessment years 1973-74 and 1974-75 are concerned, I do not find any error in the estimate of turnover. The estimate of the turnover is in consonance with the entries found in the diary and also the material found at the time of survey.
So far as assessment year 1975-76 is concerned, there appears to be some substance that there was no material that the applicant had carried on the business of utensils. The business of utensils had been inferred on the basis of the diary in which there was no entry relating to the assessment year 1975-76. Therefore, in my view, the estimate of turnover of utensils for the assessment year 1975-76 is not justified.
In the result, revisions nos. 1616 of 1998 relating to the assessment year 1973-74, 1609 of 1998 relating to the assessment year 1974-75 are dismissed and Revision No.1607 of 1998 relating to the assessment year 1975-76 is allowed in part. Tribunal is directed to pass appropriate orders under section 11 (8) of the Act deleting the turnover of utensils. However, there shall be no order as to costs.
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