High Court Of Kerala
Prakash Automobiles vs. CIT
Section 44AA, 144,
Asst. Year 1994-95, 1995-96, 1996-97, 1997-98
C.N. Ramachandran Nair & V.K. Mohanan, JJ.
IT Appeal Nos. 1753 to 1756 of 2009
5th November 2009
Counsel Appeared :
C. Kochunny Nair & S. Arun Raj, for the Appellant : P.K.R. Menon & Jose Joseph, for the Respondent
JUDGMENT
C.N. Ramachandran Nair, J. :
Heard counsel for the appellant and standing counsel for the respondent. We do not find any of the questions raised is a question of law, much less any substantial question of law. Assessments involved are for the asst. yrs. 1994-95 to 1997-98. Even though assessee is an automobile dealer and obviously registered under the KGST Act, the assessee maintained the stand for several years that it is not in the habit of keeping books of accounts. IT returns were filed for all these years on estimation basis by the assessee. Since the assessee has no case that it had maintained books of accounts, it had no right to challenge the assessment based on estimation basis. In the absence of books of accounts, the AO is free to conduct enquiry and estimate income on a rational basis under s. 144 of the IT Act. In this case, instead of collecting information, the AO adopted the turnover fixed for the year 1988-89 at Rs. 16 lakhs, which has become final, as the basis for completion of assessments. He made a progressive addition to the turnover at the rate of Rs. 2 lakhs each for every year and estimated the income at 8 per cent of the turnover. CIT(A) was very considerate because he reduced the addition from Rs. 2 lakhs every year to Rs. 1 lakh for every year. On further appeal, the Tribunal still showed leniency and fixed the turnover at Rs. 15 lakhs for all the years, which is less by Rs. 1 lakh from the turnover finally assessed for 1988-89. Even though counsel for the appellant contended that the assessee’s business was in automobile and new generation of vehicles have rendered his business unviable and there was fall in turnover, we are surprised to note that still the assessee did not choose to maintain books of accounts probably because it suits them. In our view, it would be virtually impossible for a dealer under the KGST Act to carry on business in automobile spares without registration and without maintaining books of accounts because goods are brought from outside Kerala, and transported across the State for sale. We see no reason why the assessee could not produce books of accounts maintained before the IT authorities. We therefore do not find any justification to interfere with the orders of the Tribunal. Even though counsel for the appellant submitted that for sales-tax verification certain books of accounts are maintained and the same should have been relied on, we do not think there is any merit in this claim because accounts are one and the same, whether it be for sales-tax or income-tax of the assessee. The assessee admittedly does not maintain proper books of accounts. We therefore reject these appeals.
[Citation : 322 ITR 435]
