Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2024 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (3) TMI 423 - ITAT RAJKOTLevy of penalty u/s 271B - failure to get accounts audited in terms of provisions of section 44AB - Determination of turnover in the context of a share broker's income for the purpose of Tax Audit - HELD THAT:- As the assessee is admittedly a share broker, therefore, the decision in the case of Hasmukh M. Shah [2002 (3) TMI 199 - ITAT AHMEDABAD-A] will clearly apply to the present case, following which we hold that the sale consideration of the shares sold by the assessee, on which it earned commission/brokerage is not turnover, and cannot be constitute its turnover. It is only the commission income earned by it which can be rightly treated as its turnover and the income in the present case falling well below the limit prescribed by section 44AB of the Act for subjecting the Books of accounts to audit, amounting to Rs. 1,55,614/- only, there was no case for the assessee to have got its books audited in terms of provisions of the said section. In the light of the same, therefore, we find that there is no case for levy of penalty under section 271B of the Act for not getting its books audited u/s 44AB of the Act. Exception to the applicability of the main section - Where the majority of the transactions are through transparent banking channel, the requirement of getting books audited gets diluted to a certain extent, and therefore, the proviso raises the limit of getting audit done from the turnover of rupees one crores to rupees five cores. The basic plank for audit to be done, where the “turnover” exceeds a particular limit, is not taken away by the proviso. It only raises the bar from rupees one crores to rupees five crores. Therefore, the contentions of the ld.DR that the proviso refers to the aggregate of receipts, is an incorrect understanding of the provision. Therefore, the contention of the ld.DR, we find is of no merit, and is rejected. The penalty levied in the present case therefore is not sustainable and we direct deletion of the same. Decided in favour of Assessee.
|