PARVATHI BHAVAN SWEETS Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) TWO substantial questions of law are raised in this tax case : One with regard to the legality and validity of three times addition of the estimated suppression and that too on the basis of the assessment relating to previous assessment year, and two, whether the penalty imposed under Section 12(3)(b) on the estimated suppression is sustainable.

(2.) THE assessee is a dealer in sweets and savouries. The present case relates to the assessment year 1998 -99. Place of business was inspected by the authorities on October 26, 1998 and several discrepancies were found. Actual suppression detected from the records recovered at the time of inspection was Rs. 1,31,892. The assessing authority found that for the year 1997 -98, there was suppression of sales turnover of Rs. 9,18,762, whereas the dealer had recorded turnover of only Rs. 3,09,233. On this basis, three times estimated suppression was calculated and addition of penalty was also imposed.

(3.) THE learned Counsel submitted that there was no basis for three times addition and under Section 12(3)(b), penalty can be imposed only on a specific concealment and not on estimated suppression and since the actual suppression was fixed at Rs. 1,31,892, penalty should also be calculated based on that.