P T ANTONY Vs. UNION OF INDIA

JUDGEMENT

(1.) The business premises of the petitioner, a firm, a dealer in gold ornaments and an assessee under the Kerala General Sales Tax Act, 1963, hereinafter, the "KGST Act", for short, and the residence of its managing partner, were searched on November 20, 1990, by the competent authorities under Section 132(1) of the Income-tax Act, 1961, for short, the "IT Act", resulting in the seizure of certain documents, including two slips showing unaccounted sales. On the basis of the said slips, the Assessing Officer under the Income-tax Act inferred an average daily unaccounted sale at Rs. 1,50,000 and worked out the unaccounted sales for the year ending March 31, 1991, at Rs. 4.50 crores, since the showroom worked for 300 days. The profit on the turnover was worked out and the assessment under the Income-tax Act for the year 1991-92 was made under Section 143(3) of the said Act by making an addition of Rs. 38,74,500, on account of unaccounted sales.

(2.) The petitioner raised various objections and also filed appeal, but ultimately moved the Income-tax Settlement Commission, hereinafter referred to as "the Settlement Commission"; in terms of Chapter XIX-A of the Income-tax Act. The Settlement Commission issued exhibit P1 order, settling the case of the petitioner in respect of the year 1991-92 by reckoning the profit on the unaccounted turnover at Rs. 18 lakhs.

(3.) In exercise of suo motu revisional power under Section 35 of the KGST Act, exhibit P2 assessment order under that Act, for the year 1990-91, was reopened as per exhibit P3 order dated March 20, 2000, by the competent authority, with prior notice and after hearing the petitioner, on the ground of suppressed turnover, having been established on the basis of the suppressed business income determined by the Settlement Commission, as per exhibit P1 order. The file was remanded, resulting in consequential issuance of exhibit P9 revised assessment order dated March 29, 2005, by the assessing authority, for the year 1990-91.