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2018 (3) TMI 429 - AT - Income TaxAddition u/s 40A(3) -variation in the recording of entries in assessee’s ledger - genuineness of the payment by the assessee and identity of the sellers - relationship of a principal and agent - Held that:- The provisions of section 40A(3) are not intended to restrict the business activities but to caution that payments exceeding ₹ 20,000/- are made in cheque/draft. The provisions of section 40A(3) of the Act are to be in consonance with business expediency trade practice and other genuine relevant factors. In this present case, the assessee has intimated the circumstances under which the assessee was compelled to make the cash payments and also the genuineness of payment and the identity of the payee is not doubted. Considering business expediency and judicial decisions dealt above, we are of the substantive view that the provisions of section 40A(3) shall not be a hindrance in the business operation of the assessee, who has been following such pattern from earlier years and on the principle of going concern which the revenue has not doubted. - Decided in favour of assessee Levy of penalty u/s 271B - not obtaining the audit report as required under section 44AB - efault committed by the assessee - Held that:- As find from the income tax returns for the assessment years 2012-13 and 2013-14 filed by the assessee that the assessee has shown business income from the sale of recharge vouchers and not shown as turnover. Perusal of the order in the case of Anoop Kumar Beri (2004 (7) TMI 305 - ITAT DELHI-F ) find that the assessee was under bonafide belief that receipts from commission were not to be included for the purpose of determining the obligation of audit under section 44AB and same constituted a reasonable cause for not getting the accounts audited. In the present case, the income shown by the assessee is from the commission on sale of recharge vouchers, which alone can be treated as assessee’s turnover. Thus the default committed by the assessee in not presenting the audit report is exonorable and we do not find any mala fide on the part of the assessee in this way. Hence, we delete the penalty imposed u/s.271B - Decided in favour of assessee
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