STATE OF TAMIL NADU Vs. INDUSTRIAL DIESEL ENGINEERS

JUDGEMENT

(1.) IN spite of service of notice, there is no appearance on behalf of the respondent -assessee either in person or through counsel. Hence, after hearing the Revenue and going through the records, the present order is passed in this tax case revision relating to the assessment year 1996 -97. The Revenue has filed this tax case revision, as against the order of the Tribunal, raising the following substantial question of law:

(2.) IT is seen from the facts herein that the place of business of the assessee was inspected by the officers of the Enforcement Wing on August 20, 1996. During the course of inspection, the inspecting officers found that there was no cash balance for the year 1996 -97 from the beginning of the year up to the date of inspection and the goods purchased from local as well as outside the State from the registered dealers, were not kept separately. The physical verification of the goods purchased from outside the State and available at the time of inspection with reference to the stock of those goods as per stock register, revealed stock discrepancy to the tune of Rs. 88,465 at purchase value, indicating, first sales suppression. The assessing officer also found other defects, warranting computation of gross profit at 12 per cent for the stock difference. Thus, the assessment officer estimated stock difference to the tune of Rs. 99,081 and also made addition, equal time for probable omission and arrived at the estimated suppression to the tune of Rs. 1,98,162 at 11 per cent That apart, penalty at 150 per cent under section 12(3)(b) was imposed.

(3.) A reading of the order of the Tribunal shows that the Tribunal found that the assessee's claim of second sales exemption was rejected by applying formula, on the basis of stock variation found and the varying gross profit. The assessee explained that the higher gross profit in second sales was due to the price increase effected by M/s. Greaves Engineering Ltd. Apart from that, the assessing officer has not pinpointed out any misclassification in the accounts of the assessee. Thus, on the ground that varying gross profit would not be sufficient for invoking the formula for estimation of first sales, the Tribunal set aside the addition of Rs. 14,83,003 and also deleted the penalty levied. Aggrieved by this, the present appeal by the Revenue before this court. Satisfied of the reasons given by the assessee for varying gross profit in second sales, the Tribunal had deleted the addition. In that process, the Tribunal also found that there was no specific allegation, pinpointing any misclassification of goods in the accounts of the assessee, warranting addition. Thus, on the facts found, the order of the Tribunal does not call for any interference by this court. Consequently, the tax case revision is dismissed. No costs.