P K KUNJUMON Vs. STATE OF KERALA

JUDGEMENT

(1.) The assessee is the revision petitioner. He is a dealer in timber. For the assessment year 1989-90 the accounts and return submitted by the assessee were rejected and the turnover was estimated. Based on the stock variation and other discrepancies found out in the inspection conducted on January 1, 1989 the assessing authority estimated the taxable turnover at Rs. 26,03,515. This amount is arrived at inter alia by making an addition of a turnover of Rs. 12,10,446. The first appellate authority noted that this addition of Rs. 12,10,446 is made up of the turnover of unaccounted purchases and the turnover of unaccounted sales. He felt that there was no justification in including the turnover of unaccounted purchase as well as the turnover of unaccounted sales since according to him the unaccounted sales turnover must be from the unaccounted purchases. In that view of the matter the first appellate authority took the unaccounted purchases from two sources amounting to Rs. 2,49,534.42, added 20 per cent gross profit and added a further amount of Rs. 1,86,720 on account of stock variation noticed. Thus the actual turnover of unaccounted transactions came to Rs. 5,09,321.26. Taking two times the said amount it came to Rs. 10,18,642.52. The first appellate authority sustained the addition to the above extent as against Rs. 12,10,446 made by the assessing authority. Aggrieved by the order of the first appellate authority the assessee and the State filed appeals before the Tribunal. The appeal filed by the assessee was dismissed and the appeal filed by the State was allowed with regard to this addition and restored the order of the assessing authority in the matter. This revision is filed against the order of the Tribunal allowing the appeal filed by the department and restoring the addition made by the assessing authority.

(2.) Dr. K.B. Mohammed Kutty, learned Counsel appearing for the assessee, submitted that the Tribunal was not justified in interfering with the order of the first appellate authority. For, according to the counsel, the first appellate authority has found that there is no justification in making an addition of unaccounted sales when unaccounted purchases for higher amounts was added. Counsel also submits that the Tribunal found fault with the first appellate authority stating that unaccounted purchases relate to firewood and jungle wood whereas the unaccounted sales was of timber. Counsel pointed out that jungle wood is also timber and therefore, the Tribunal was not justified in taking the view that unaccounted sales relates to different commodity, namely timber. In short, counsel submits that jungle wood is also timber and the very basis for interfering with the order of the appellate authority goes.

(3.) Learned Government Pleader appearing for the respondent, on the other hand, submits that the Tribunal had verified the assessment records and found that the unaccounted purchases relate to firewood and jungle wood. He also submitted that jungle wood is the same as wood without much value whereas the item unaccounted sales relate to timber. The Government Pleader also submitted that the decision of the Tribunal did not rest on that ground alone.