Appellant wins appeal, tax & penalty annulled for inaccurate turnover calculation under Income Tax Act.

The appellant, engaged in the grocery and controlled goods business, was assessed for turnover by the assessing officer, leading to tax and penalty imposition. The court upheld the assessment, emphasizing thorough investigation. Despite the first appellate court's dismissal of the appeal, subsequent arguments against fertiliser sales inclusion in turnover calculation led to the appellate tribunal annulling the assessment under section 12(5) of the Income Tax Act. The tribunal ordered a refund of tax and penalty, as the liability for tax was deemed inaccurately determined due to lack of concrete evidence on fertiliser sales.

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Issues:
1. Assessment of turnover for the appellant's business in grocery and controlled goods.
2. Discrepancy regarding the turnover calculation including fertiliser sales.
3. Appeal against the assessment and imposition of tax and penalty.
4. Dispute over the liability for tax based on fertiliser sales estimation.
5. Legal validity of the assessment under section 12(5) of the Income Tax Act.

Detailed Analysis:
1. The appellant, engaged in the grocery and controlled goods business, was assessed by the assessing officer based on the average daily sales and turnover of the business. The assessing officer determined the turnover for the year, leading to the imposition of tax and penalty on the appellant.

2. The first appellate court directed further inquiry into the assessment for the year 1969-70, specifically focusing on the turnover related to fertilisers. The assessing officer estimated the turnover of fertilisers for the appellant, which significantly impacted the overall turnover calculation. The court upheld the assessment, emphasizing the need for thorough investigation in such cases.

3. The appellant, dissatisfied with the assessment, filed an appeal challenging the findings and the imposition of tax and penalty. The first appellate court dismissed the appeal, affirming the assessing officer's assessment and observations regarding the turnover calculation.

4. In the subsequent appeal, the appellant's counsel argued against the evidence presented regarding the sale of fertilisers and disputed the inclusion of fertiliser sales in the turnover calculation. The appellant contended that without concrete evidence of fertiliser sales, the liability for tax should not apply, leading to a request for the assessment to be quashed.

5. The core issue revolved around whether the appellant indeed conducted business in fertilisers during the relevant period. The appellant's statement regarding the purchase of fertilisers for personal land usage raised doubts about the actual sale of fertilisers for business purposes. The absence of definitive evidence and estimation for fertiliser sales during the assessment year led to the conclusion that the liability for tax was not accurately determined. Consequently, the appellate tribunal allowed the appeal, annulling the assessment under section 12(5) and ordering the refund of tax and penalty paid by the appellant.

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