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TMI Blog2012 (7) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 143(3), held such income as "Business income" instead of "capital gain" claimed by the assessee. As the sale proceeds exceeded the monetary limit of Rs.40.00 lakh prescribed u/s 44AB, the AO imposed penalty u/s 271B at Rs.1 lakh. No relief was allowed in the first appeal. 3. We have heard the rival submissions and perused the relevant material on record. Section 44AB provides that every person 'carrying on business' shall, if his total sales, turnover or gross receipts as the case may be, 'in business' exceed Rs.40 lakh in any previous year, then such person is required to be get his account audited before the specified date and furnish such report in the prescribed form. Section 271B talks of imposition of penalty if any person fails ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted as such by the department. Similarly for the assessment year 2008-2009 also, the assessee disclosed similar income under the head 'Capital gains' which was accepted by the AO as it as. The assessee filed certain additional evidence before the Tribunal to bring home its point that the shares were liable to be considered as investment and not stock-in-trade. Considering all these facts the Tribunal set aside the order of the CIT(A) and restored the issue to the file of AO with a direction to decide it afresh. From the above narration of facts it is evident that the income of the assessee from sale of shares in the immediately preceding year under similar circumstances was declared and accepted as capital gain. Same position continued for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance by the Revenue of income from sale of shares as capital gain in the immediately preceding year constituted a bona fide ground for the assessee to entertain a belief that such income was liable to be taxed under the head capital gain and not as business income. Once this view is accepted, then failure of the assessee to get its account audited and furnish the audit report, constitutes reasonable cause for default. In our considered opinion the present circumstances warrant the acceptability of the reasonable cause for the failure to get the account audited and furnish the report in due time. We, therefore, accept the assessee's contention of there being a reasonable cause within the meaning of section 273B, in the failure to comply with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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