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2020 (3) TMI 171 - AT - Income TaxDetermination of turnover - Penalty u/s 271A and 271B- violation of provisions of section 44AA and 44AB - failure to maintain books of accounts - failure to get accounts audited - speculative transactions on NCDEX/MCX commodity exchange - turnover of about 27 crores - net loss is about 3.60 lacs - HELD THAT:- In case of speculative transactions, in absence of term “turnover” defined in the Act, as per the guidance note issued by ICAI, the turnover has to be determined by taking the aggregate of both positive and negative differences arising from such speculative transactions and as an outcome of settlement of such contracts during the year which in the instant case comes to ₹ 3.60 lakhs. Where turnover is less than the threshold provided under section 44AA of the Act, the assessee was not required to maintain his books of accounts in respect of such transactions. On same analogy, where the books of accounts are not required to be maintained, the question of getting the same audited doesn’t arise for consideration and in any case, the turnover is less than the prescribed threshold under section 44AB of the Act. In such a scenario, there is no basis to hold that there was any violation of provisions of section 44AA and section 44AB of the Act and consequently, the penalty levied u/s 271A and 271B is hereby deleted and the orders of the lower authorities are set-aside. Levy of penalty U/s 271(1)(b) - non compliance to the notice issued U/s 142(1) dated 13.10.2017 - We find that there is nothing on record in terms of any explanation furnished by the assessee for non-compliance to the said notice. Therefore, levy of penalty u/s 271(1)(b) of the Act in absence of any reasonable cause shown by the assessee is hereby confirmed.
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