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2019 (6) TMI 1095 - AT - Income TaxPenalty u/s 271B - non-maintenance of books of accounts, for assessee’s failure to get the accounts audited as required u/s 44AB - Assessee had received the sale proceeds from the sale of disputed property and paid the advance tax - assessee filed the return of income declaring Nil income and claimed the refund of the entire amount of advance taxes paid along with detailed note on long term capital gains - AO treated the receipt as business income and the receipts exceeded the specified limit of ₹ 40,00,000/-, the AO initiated penalty proceedings u/s 271B - HELD THAT:- From the penalty order of the AO, it is observed that the assessee made only single transaction which is stated to be advance for purchase of land and property and there were no series of transactions. The assessee was under the impression that the advance received by the assessee was not taxable in the impugned assessment year since the transaction was not finalized. Even if it is to be taxed, the same is to be taxed under the head ‘capital gains’, but not under the head ‘business income’. That was the reason that the assessee did not get his accounts audited as required u/s 44AB of the Act. There is no dispute that the transaction was single transaction. No other expenditure was also claimed by the assessee. The AO did not bring any other material to support that the assessee has carried on the business in the earlier year or subsequent year in the assessment order. There is no issue of complexity involved in the receipts of the assessee. The assessee is a mechanical engineer, as observed from the assessment order and he is not engaged in the business, there are no other business transaction carried on by the assessee as brought out by the AO in the assessment order. Therefore, we hold that the assessee did not get the accounts audited since he was under the bonafide impression that sale transaction of litigated land as capital gains but not business and the same appears to be reasonable cause as required u/s 271B. Accordingly, we hold that there is reasonable cause for not getting the accounts audited - Decided in favour of assessee.
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