IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN WEDNESDAY, THE 30TH SEPTEMBER 2009 / 8TH ASWINA 1931 ITA.No. 1300 of 2009() ---------------------- ITA.534/COCH/2004 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/REVENUE ------------------------------------- THE COMMISSIONER OF INCOME TAX, CALICUT. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): RESPONDENT/ASSESSEE ---------------------------------- M/S.HILL WOOD INDUSTRIES C/O.NATIONAL TIMBER TRADERS, FEROKE,CALICUT. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 30/09/2009, ALONG WITH ITA NO. 1343 OF 2009 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR & V.K. MOHANAN, JJ. -------------------------------------------- I.T.A. No.1300 & 1343 OF 2009 -------------------------------------------- Dated this the 30th day of September, 2009 JUDGMENT Ramachandran Nair, J. Heard senior standing counsel appearing for the appellant. The common issue that arises in the connected appeals is whether the Tribunal was justified in confirming the order of the CIT (Appeals) directing the assessing officer for estimation of income at 8% of the suppressed turnover. The department's case is based on detection of stock variation during sales tax inspection. The finding of the sales tax authorities is that the assessee suppressed stock as well as sales. Before the sales tax authorities, the assessee accepted the offence and compouned the offence by remitting compounding fee. Based on the data collected by the sales tax authorities the assessing officer under the I.T. Act assessed the entire value of suppressed stock as unaccounted income. However, the CIT (Appeals) noticed that the assessee practised only unaccounted sales to avoid sales tax and consequently he estimated the income of suppressed sales at 8% which was confirmed by the Tribunal. 2. Even though senior standing counsel submitted that the value 2 of suppressed stock is to be taken as income of the assessee, we do not find any such presumption available under the Act or any justification to assume that unaccounted stock was purchased with unaccounted income of the assessee. Since the assessee practised suppression in sales, addition is estimated only for the estimated profit from such income. We therefore do not find any justification to interfere with the finding of the CIT (Appeals) confirmed by the Tribunal. Consequently the finding on the common issue raised in both the appeals does not warrant any interference by this Court. The other issue raised pertains to assessee's claim for higher rate of depreciation on lorries. On facts, the lower authorities found that the trucks were used not only for own business but also hired out by them. Since part of the operation entitles the assessee for higher rate of depreciation on lorries, we do not find any justification to interfere with the finding of the CIT (Appeals) confirmed by the Tribunal. Consequently both the appeals are dismissed. (C.N.RAMACHANDRAN NAIR) Judge. (V.K. MOHANAN) Judge. kk 3