Ita/1300/2009 Of The Commissioner Of Income Tax Calicut v. M/S. Hill Wood Industries Feroke Calicut

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN WEDNESDAY, THE 30TH SEPTEMBER 2009 / 8TH ASWINA 1931 ITA.No. 1300 of 2009() ---------------------- ITA.534/COCH/2004 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/REVENUE ------------------------------------- THE COMMISSIONER OF INCOME TAX, CALICUT. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): RESPONDENT/ASSESSEE ---------------------------------- M/S.HILL WOOD INDUSTRIES C/O.NATIONAL TIMBER TRADERS, FEROKE,CALICUT. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 30/09/2009, ALONG WITH ITA NO. 1343 OF 2009 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: -------------------------------------------- I.T.A. No.1300 & 1343 OF 2009 -------------------------------------------- Dated this the 30th day of September, 2009 JUDGMENT Ramachandran Nair, J. Heard senior standing counsel appearing for the appellant. Thecommon issue that arises in the connected appeals is whether theTribunal was justified in confirming the order of the CIT (Appeals)directing the assessing officer for estimation of income at 8% of thesuppressed turnover. The department's case is based on detection ofstock variation during sales tax inspection. The finding of the sales taxauthorities is that the assessee suppressed stock as well as sales. Beforethe sales tax authorities, the assessee accepted the offence andcompouned the offence by remitting compounding fee. Based on thedata collected by the sales tax authorities the assessing officer under theI.T. Act assessed the entire value of suppressed stock as unaccountedincome. However, the CIT (Appeals) noticed that the assesseepractised only unaccounted sales to avoid sales tax and consequently heestimated the income of suppressed sales at 8% which was confirmedby the Tribunal. 2. Even though senior standing counsel submitted that the value of suppressed stock is to be taken as income of the assessee, we do not find any such presumption available under the Act or any justificationto assume that unaccounted stock was purchased with unaccountedincome of the assessee. Since the assessee practised suppression insales, addition is estimated only for the estimated profit from suchincome. We therefore do not find any justification to interfere with thefinding of the CIT (Appeals) confirmed by the Tribunal. Consequentlythe finding on the common issue raised in both the appeals does notwarrant any interference by this Court. The other issue raised pertainsto assessee's claim for higher rate of depreciation on lorries. On facts,the lower authorities found that the trucks were used not only for ownbusiness but also hired out by them. Since part of the operation entitlesthe assessee for higher rate of depreciation on lorries, we do not findany justification to interfere with the finding of the CIT (Appeals)confirmed by the Tribunal. Consequently both the appeals are dismissed. (C.N.RAMACHANDRAN NAIR) Judge. (V.K. MOHANAN) Judge.