Sales turnover enhancement fails where alleged book discrepancies are plausibly explained and no suppression of sales is shown.

Enhancement of sales turnover was not sustained because the alleged book discrepancies were plausibly explained. The purchase entries and payment entries related to transactions within the same assessment year, the date variation was minor and did not indicate false accounting, and the apparent sales mismatch was resolved by including finance commission and sales to registered dealers. As no suppression of sales was established, the basis for the revised tax assessment failed and the turnover addition could not be upheld.

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Issues: Whether the enhancement of sales turnover and the consequential tax assessment could be sustained on the basis of alleged discrepancies in the books of account.

Analysis: The disputed additions rested on three alleged discrepancies: the dating of purchase entries, a minor difference in the date of payment entry, and a mismatch in sales figures at the 5% rate. The explanation for each discrepancy was accepted as plausible. The entries were shown to relate to transactions and payments made within the same assessment year, the variation in one entry was held to be minor and not indicative of false accounting, and the apparent sales discrepancy disappeared when finance commission and sales to registered dealers were taken into account. No suppression of sales was found and the basis for enhancing turnover was not established.

Conclusion: The enhancement of sales turnover could not be upheld and the appeal was allowed.

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