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2009 (3) TMI 186 - HC - Income TaxTax Audit - Penalty u/s 271B - Audit u/s 44AB - inclusion of deemed turnover for the purpose of calculation of monetary limit of Tax Audit - The Assessing Officer was of the view that in terms of provisions of Section 44AB of the Income Tax Act, 1961 (the Act), the Assessee was under an obligation to get its accounts audited because the total amount of advances during the year under consideration constitute the turnover of the assessee which exceeded the stipulated limit of Rs.40 lacs. As the audit report had not been filed by the assessee, a show cause notice was issued on 05.11.1992. The assessee filed reply on 12.11.1992 contending that provisions of Section 44AB of the Act are not applicable in its case because the Gross Receipts did not exceed the sum of Rs.40 lacs. The said contention was not accepted by the Assessing Officer and penalty of Rs.72,451/- was levied under the provisions of Section 271B of the Act. - held that - In fact, on a reading of provisions of Section 44AB of the Act, it is a moot question as to which of the three phrases can be said to be applicable in a given case, and the same would depend on facts of each case and no straight jacket formula can be evolved in this context. Accordingly, the assessee was entitled to contend that when the terms Turnover and Gross Receipts are separated by the use of word or, the assessee would be entitled to bonafidely believe that Gross Receipts would constitute the basis for ascertaining the limit of Rs.40 lacs so as to attract Section 44AB of the Act.
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