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Sh. Ramesh Chander Gupta Versus Income Tax Officer

2016 (4) TMI 161 - ITAT DELHI

Penalty u/s 271B - non comply with the provisions of Section 44AB - Held that:- It appears that the assessee got his accounts audited relating to regular business of manufacturing of GLS Lamps. However, no audit was got conducted in respect of the transaction relating to sale and purchase of shares. In the instant case, this contention of the assessee that the transaction relating to purchase and sale of shares resulted into short term capital loss and the transaction was involving capital asset .....

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business income and that the shares sold by the assessee were kept as a stock-in-trade. Therefore, the provisions of Section 44AB of the Act were not applicable to the transaction relating to sale & purchase of shares and the penalty u/s 271B of the Act levied by the AO and sustained by the ld. CIT(A) was not justified, therefore, the same is deleted. - Decided in favour of assessee - ITA No. 4996/Del/2013 - Dated:- 26-2-2016 - N K Saini, AM And Beena Pillai, JM For the Petitioner : Ms Neha Sapr .....

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₹ 3,19,850/-which was subsequently revised on 20.10.2008 at the same income. However, assessment was completed ex-parte at an income of ₹ 32,18,840/- u/s 144 of the Act. The assessee was engaged in the business of trading of shares and manufacturing of GLS Lamps under the proprietorship M/s R.S. Electrical. The AO during the course of assessment proceedings noticed that the assessee apart from the business of M/s R.S. Electrical had entered into another business activity of sale and .....

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e ld. CIT(A) and submitted that it was not a case where absolutely no compliance had been made u/s 44AB of the Act but was a case where compliance u/s 44AB of the Act could not be made with respect to one segment of business, therefore, provisions of Section 271B of the act were not applicable. It was further stated that the assessee had considered the sale and purchase of shares as transaction involving capital assets and therefore, it remained outside the purview of tax audit. 5. The ld. CIT(A .....

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e and sale transactions of the shares were treated by him in the books of accounts i.e. whether the shares were held as stock in trade or as an investment. The ld. CIT(A) held that the assessee's accounts relating to the business activity of trading in shares were not audited as required under the provisions of Section 44AB of the Act. He accordingly confirmed the penalty levied by the AO. 6. Now the assessee is in appeal. The ld. Counsel for the assessee reiterated the submissions made befo .....

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