Best judgment penalty applies only where the assessment itself is made on best judgment, not on accepted account-based turnovers.

Penalty under the best judgment penalty provision was confined to turnover items actually assessed on best judgment, and a merely incomplete or incorrect return did not by itself attract penalty. Items 1 and 3 were accepted from the assessee's own account books without estimation, so they fell outside the statutory field for penalty and no penalty was sustainable on those turnovers. Item 2 was assessed on best judgment after the assessee invited that method, bringing it within the provision; penalty was valid only for that item.

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Issues: Whether penalty could be levied under the penalty provision for all items of turnover when only one item was assessed on best judgment and the other items were accepted on the basis of the assessee's accounts.

Analysis: Penalty under the relevant provision was held to be available only where the assessment itself fell within the scope of the best judgment assessment provision. A mere filing of an incomplete or incorrect return was not enough by itself. For the first and third items, the turnovers were taken from the assessee's own account books and no estimate or best judgment was applied; those items therefore did not fall within the ambit of the best judgment provision. For the second item, the assessee invited the assessing authority to determine the turnover by best judgment, and the assessment on that item was in fact made on that basis, bringing it within the statutory field for penalty.

Conclusion: Penalty was not sustainable in respect of items 1 and 3, but it was valid in respect of item 2.

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