Sale of gas cylinders to consumers was to be included in turnover for purpose of
Section 44AB when assessee was appointed as a distributor on principal-to-principal basis for sale of such cylinders.
Facts:
a) The assessee was a distributor of Indian Oil Cooking Gas and was also engaged in sale of gas stoves and spare parts.
b) The assessee did not include the turnover from sale of cylinders for computing the threshold limit prescribed under section 44AB. By including such sales, the turnover of assessee would exceed the threshold limit prescribed under section 44AB.
c) Thus, the Assessing Officer (AO) issued a show-cause notice to assessee on the ground that it did not get its accounts audited under section 44AB.
d) The assessee contended that it had sold gas cylinders on commission basis as the ownership of same remained with the Indian Oil Corporation. Therefore, sale of gas cylinders could not be included in its turnover to compute the threshold limit prescribed under section 44AB. The Assessing Officer did not agree with assessee's reply and imposed a penalty on it under
section 271B.
e) The appellate authorities affirmed the order of AO. Aggrieved assessee filed the instant appeal before the High Court.
