STATE OF KERALA Vs. Y. KABEER

JUDGEMENT

(1.) THESE are revisions by the State and the assessee with respect to the assessment years 2006 -07 and 2007 -08. Essentially the question raised is with respect to apportionment of the turnover of the assessee as taxable and non -taxable. The State challenges the order of the Tribunal making such apportionment at 50%, as being without any material on record and hence perverse. While the State seeks restoration of the assessment order adopting the entire turnover of the assessee as taxable, the assessee in its revision prays for apportionment as per its books of accounts. The assessee is a dealer of fabrics and readymade garments. For the assessment year 2006 -07, while completing the assessment, the result of an inspection which led to the compounding of the offence by the assessee was taken into account for the purpose of rejecting the books of accounts and the return filed. The suppressed turnover found on inspection was added with equal addition. The taxable turnover was proposed at Rs.4,72,711/ - and assessed to tax at the rate of 4%. The balance turnover was exempted on the ground that it related to the sale of fabrics. Subsequently, on the assessee filing audited statements, the cost of goods manufactured was shown as Rs. 1,06,86,307/ - and the sale of finished goods was shown as Rs. 1,09,57,186/ -. On the strength of the disclosures in the audited statements, notice was issued for assessing the escaped turnover and the entire turnover was assessed at 4%. For the assessment year 2007 -08 also, based on the audited statements, the entire turnover of sale of finished goods as disclosed in the audited statement being Rs.99,38,134/ - was assessed to tax at the rate of 4%. The first appeal filed against both the said orders for the respective years were rejected and the dealer was before the Tribunal. The Tribunal, for the year 2006 -07, found the rejection of accounts to be proper. For both the years the Tribunal, on facts, found that on a verification of the records the manufacturing and trading business disclosed figures adopted by the Assessing Officer. Hence, the proceedings for bringing to tax the turnover that escaped assessment for the year 2006 -07 and the rejection of books of accounts for the year 2007 -08 were found to be perfectly in order. However, the Tribunal directed the bifurcation of the total turnover as taxable turnover and non -taxable turnover at one -half.

(2.) THE State challenges the modification made by the Tribunal as perverse; in the absence of any cogent evidence. The assessee claims for acceptance of his books of accounts. The Tribunal, on examination, found that the sale bills filed are not fully reliable, but still made the apportionment as stated above. The State's contention regarding lack of material seems to be correct. However, it is to be noticed that the original assessment for the year 2006 -07 was completed on a verification of the books of accounts and after rejecting the same, considerable turnover was allowed as exempted turnover. This would definitely reveal that the assessee had been involved in the sale of fabrics too; which is not taxable. The contention of the assessee that its books of accounts should be accepted and the turnover adopted in accordance with that cannot be accepted, since it was the audited statements filed by the assessee itself that led to the rejection of books of accounts. To our query, the only explanation offered is the mistake committed on audit. Essentially the questions raised are all on facts. The Tribunal cannot be said to have acted in a perverse manner in the facts and circumstances of the case. The order of the Tribunal does not give rise to any question of law.