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TMI Blog1971 (9) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the imposition of the penalty of Rs. 2,000 on the petitioner-firm is justified?" M/s. Tara Chand Hari Ram is a firm registered as a dealer under the Act. It carries on business at Rewari in the district of Gurgaon. The dealer filed quarterly returns for all the four quarters for the year 1964-65 in which the gross turnover was shown at Rs. 2,73,476.12. After claiming deductions permissible under the law, the taxable turnover was worked out at Rs. 2,60,371.10 on which a tax of Rs. 11,286.71 was deposited. The assessing authority was not satisfied with the return and inspected the premises of the assessee. It found many irregularities on inspection of the records. A number of loose parchas relating to certain transactions were taken int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. Allowing the necessary deductions, the total tax assessed came to Rs. 14,070.36 against the voluntary payment of Rs. 11,286.71. A penalty of Rs. 3,928.37 which was hundred per cent. of the tax involved under section 11(7) of the Act was imposed. New demand in a sum of Rs. 7,856.74 was thus created. The assessee took an appeal to the Deputy Excise and Taxation Commissioner who did not attach much value to the first two irregularities referred to above as he did not consider them to be in any way substantial. In his opinion, 11 transactions of sale mentioned at serial No. 3 above could not be supported and the total amount of these sales comes to Rs. 653.14 as appearing from the books of account. The appellate authority maintained th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealed any income. No authority is needed for the proposition that the best judgment assessment cannot be arbitrary. Even best judgment assessment implies and imports a legal and judicial consideration and the assessing authority cannot just base the same on some suspicions without there being any material on which it could rely. The assessing authority has just mentioned a figure at Rs. 51,523.88 but if it had fixed the increase at Rs. one lakh or any other amount, there was nothing to stop it. We are, therefore, satisfied that in the circumstances of the present case there is no evidence on which reliance could be placed to add a sum of Rs. 51,523.88 to the turnover. In the result, the first question referred to us is answered in the n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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