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2011 (2) TMI 1399 - AT - Income TaxProvisions of section 44AB - penalty proceedings u/s 271B - In present case, AO from the search operation and the statement recorded u/s 132(4), noted that the modus operandi adopted by the assessee was that he first received cash from entry seekers which were deposited in the bank account of one of the group companies and after depositing the cash in the bank accounts, a cheque was issued and the equal amount in favour of entry seekers. The assessee thus returned the cash of the entry seekers in the guise of cheque after retaining commission. Since the assessee had failed to get its accounts audited and furnish a copy of the same before the specified date the AO initiated penalty proceedings u/s 271B by issuing the show-cause notice. He therefore levied the penalty. HELD THAT:- In case of the assessee he had himself received the money through the concerns in his control and in exchange thereof had issued cheques. Therefore the transaction was principle to principle basis and not as agent. Therefore in our view in case of the assessee gross amounts received in connection with entry business have to be considered for the purposes of ceiling of ₹ 40 lacs u/s 44AB. The circular No.452 of the CBDT relied upon by the assessee is also distinguishable as the same related to kachha arithia. The decision of the tribunal in case of R.Wadiwala & Co. Vs ACIT [2000 (11) TMI 277 - ITAT AHMEDABAD-B] is obviously distinguishable as the same related to share transactions and not accommodation bills. It may also be pointed out that the assessee has not raised any ground that he was not liable for audit u/s 44AB. Therefore, the case of the assessee was covered u/s 44AB and the accounts were required to be audited and audit reports were required to furnished within the prescribed date which had not been done. Penalties were therefore leviable and the same had been rightly levied by the authorities. The order of CIT(A) is accordingly upheld. all the appeals of the assessee stand dismissed.
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