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Issues:
1. Penalty imposition under Section 16(2) of the Act on failure to include transfer of goods in monthly reports and annual statements. 2. Whether there was willful suppression of sales turnover warranting penalty imposition. Detailed Analysis: Issue 1: The appeals were filed against the orders of the Appellate Assistant Commissioner regarding transfer sales between two companies during the year 1969-70. The disputed turnover amounts were Rs. 4,553.56 and Rs. 41,606.84 in the respective appeals. The assessing officer imposed penalties under Section 16(2) of the Act on both companies for not including the value of goods transferred in their reports and statements, despite recording the transactions in their accounts. The penalties were later reduced by the AAC but were still contested in the present appeals. Issue 2: The main contention in both appeals was whether there was willful suppression of sales turnover justifying the penalty imposition. The companies argued that the transactions were mere transfers of goods between related entities and not actual sales, as they were treated as such only in the revised assessments under Section 16(2). They maintained that the entries were made in good faith, believing the turnover was not taxable. Citing legal precedents, the companies asserted that doubts about tax liability do not warrant penalty imposition, especially when the transactions were recorded in their books but not included in the reported turnover. The Tribunal found in favor of the companies, emphasizing the absence of willful non-disclosure and the genuine belief that the turnover was not subject to tax. In conclusion, the Appellate Tribunal allowed the appeals, setting aside the orders of the Appellate Assistant Commissioner and canceling the penalties imposed on the companies. The judgment highlighted the importance of bona fide belief and lack of willful suppression in determining the applicability of penalties for non-disclosure of turnover in tax assessments.
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