COMMISSIONER OF INCOME TAX Vs. SAKUNTALA DEVI KHETAN

JUDGEMENT

(1.) The Revenue is on appeal in respect of the assessment years 1998-1999 to 2002-2003. The following is the common substantial question of law raised in all these appeals :-

(2.) The assessee is doing business in turmeric trade under the name and style of Jagadambal Traders. The assessee filed the returns individually in respect of all those assessment years. However, the Assessing Officer believed that the income chargeable to tax had escaped assessment on the reason that the assessee had discounted drafts/cheques received from various parties including M/s.M.Periasamy Gounder & Co. This information was received by the Assessing Officer from the Deputy Director of Income Tax (Investigation), Erode based on the materials seized during the course of action under Section 132 of the Income Tax Act in the premises of M/s.M.Periasamy Gounder & Co. and one E.P.Thiyagarajan, the proprietor of the said firm. Therefore, the Assessing Officer found that there was excess turnover in all those assessment years. The assessee explained before the Assessing Officer that she was not maintaining any records and addition could not be made simply based on the statement obtained from third parties. It was also contended by the assessee that the sales tax Authorities have verified the assessee's purchases, sales, closing stock etc., in respect of each assessment year and accepted the return filed before them. However, the Assessing Officer did not accept the said contention of the assessee and consequently assessed the turnover as Rs.3,19,56,498/-, Rs.63,03,794/-, Rs.49,87,071/- Rs.1,84,75,086 and Rs. 4,06,88,037/- respectively for the assessment years 1998-1999 to 2002-2003 and accordingly applied G.P. rate accepted by the assessee. On appeal by the assessee as against these assessment orders, the Commissioner of Income Tax (Appeals) confirmed the order of the Asessing Officer. Further appeal was preferred before the Tribunal by the assessee. The Tribunal following the decision of this Court (Commissioner of Income Tax Vs. Anandha Metal Corporation, 2005 273 ITR 262 ), partly allowed the appeal and directed the Assessing Officer to adopt the figures of turnover finally assessed by the sales-tax Authorities and apply the G.P. rate accordingly. Aggrieved against the same, the present appeals are preferred by the Revenue with the common question of law as stated supra.

(3.) Learned counsel appearing for the Revenue submitted that the Assessing Officer was right in making the addition based on the information obtained from the said E.P.Thyagarajan, who is the proprietor of M/s.M.Periasamy Gounder & Co which shows that the assessee had discounted drafts/ cheques received from various parties including the said company. It is also contended that though the assessee was given sufficient opportunity to explain the discrepancies, she had not disproved the same and therefore the addition made by the Assessing Officer is correct.