Penalty for alleged turnover suppression fails when books match and the factual basis for the addition is erroneous.

Penalty for alleged suppression of turnover was found unsustainable where the assessment order itself showed that the reported turnover tallied with the books of account, apart from a minor rounding difference of Rs. 3. The assessing officer failed to satisfactorily explain the alleged suppression figure of Rs. 3,56,161, and the basis for reaching that amount was found erroneous. As the factual foundation for levy of penalty was absent, the penalty was unjustifiable and the Tribunal's decision to set it aside was upheld.

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Issues: Whether the penalty imposed on the assessee for alleged suppression of turnover was sustainable in law.

Analysis: The assessment order itself recorded that the turnover reported by the assessee tallied with the books of account, save for a minor variation of Rs. 3 attributable to rounding off. The alleged suppression of Rs. 3,56,161 was not satisfactorily explained by the assessing officer, and the basis on which that figure was reached was found to be erroneous. In these circumstances, the factual foundation for levy of penalty was absent.

Conclusion: The imposition of penalty was unjustifiable and the Tribunal was right in setting it aside.

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