Tax liability cannot be imposed solely on the basis of presumption. There must be cogent and positive evidence to link a transaction to the assessee.

JUDGMENT :

Alok Mathur, J.

1. Heard Sri Pradeep Agrawal, learned counsel for the revisionist as well as Sri Rohit Nandan Shukla, learned counsel appearing for the revenue.

2. Present revision under Section 11 of the U.P. Trade Tax Act, 1948, has been preferred against order dated 27.07.2007, passed by the Trade Tax Tribunal, Bench 2, Lucknow (hereinafter referred to as "the Tribunal") in Appeal No. 367 of 1993 for the assessment year 1984-85. Following questions of law are involved in the present revision :

I. Whether the Tribunal was justified in merely interpreting the facts in a different manner and holding that the revisionist is liable to be taxed with regard to a transaction which was recorded in the books of account of third party despite the fact that no co-relation between the third party and the revisionist could be established for the said transaction.

II. Whether the Tribunal was justified to assess the revisionist with regard to a transaction found in the books of account of a third party despite the specific finding that third party has been using the name of different parties to carry on business out of books of account for which he has been assessed on best judgment basis.

3. Facts in brief of this case are that revisionist is involved in sale and purchase of 'supari' and during course of business same was purchased from M/s Campco Ltd., Kanpur. In the assessment year 1984-85, in the books of account of M/s Campco Ltd., it is shown that revisionist has purchased 'supari' for an amount of Rs.16,70,552.25, while in the books of account of revisionist 'supari' worth Rs.8,44,552.50 is entered, but there was no entry relating to sale of remaining 'supari' worth Rs.8,25,999.75. It is stated that consignment of 'supari' worth Rs.8,25,999.75 was brought thorough Railways and was not entered into the books of account of the revisionist and the assessing officer assessed the revisionist and raised demand on the aforesaid amount, treating it to have been purchased by the revisionist.

4. The revisionist filed appeal against the aforesaid assessment before the first appellate authority, who after scrutinizing the accounts of revisionist and M/s Campco Ltd., came to the conclusion that there was no material which can relate the transaction of sale of 'supari' to the revisionist. The first appellate authority further recorded that it is the onus of the assessing authority to prove that a purchase has been made and therefore the assessing authority should obtain the necessary evidence against the assessee and if it is found that the assessee had made payment or any other evidence is found against the assessee then only the said transaction shall be liable to tax otherwise not.

5. It was assumed by the assessing authority that the revisionist had paid for the said transaction in cash holding that said portion of sale cannot be shown from the books of account of the revisionist. The first appellate authority came to the conclusion that there was no material or evidence from which it can be ascertained that the revisionist was involved in purchase of said 'supari' and allowed the appeal of the revisionist.

6. The order of first appellate authority was challenged by the revenue before the Tribunal and in the first round the matter was remanded back to the first appellate authority for reconsideration. After remand of the matter, the first appellate authority again came to same conclusion and passed order in favour of assessee-revisionist.

7. By means of impugned judgment and order, the Tribunal has recorded finding that books of account of M/s Campco Ltd. clearly indicate that said transaction relate to revisionist-assessee and only on the basis of books of account of M/s Campco Ltd., allowed the appeal of the revenue, attributing the said transaction to the assessee-revisionist and upheld the assessment order passed in the present case.

8. Learned counsel for the revisionist while assailing the order of Trade Tax Tribunal dated 27.07.2007,