TMI Blog2018 (9) TMI 783X X X X Extracts X X X X X X X X Extracts X X X X ..... step was not taken by the assessee. In the absence of any details, we are of the view that the ld.CIT(A) has rightly exercised his discretion of estimating the profit. We find that no error in the order of the ld.CIT(A). Thus, ground of appeal is rejected. It is pertinent to observe that profit has been estimated qua sale of mobile recharge vouchers only. This is a limited rejection of books on one issue, which has been upheld by the CIT(A). With regard to the regular source of business i.e. trading in pan masala and gutkha, books have not been rejected. The profit declared by the assessee has been accepted. The closing balance difference on that activity requires to be added separately. The ld.CIT(A) has rightly confirmed this addition. We do not find any merit in this ground of appeal. It is rejected. Penalty u/s 271B - Held that:- We find that penalty under Section 271B of the Act is imposable under the Act, if any person fails to get his accounts audited in respect of any previous year and fails to furnish report thereof to the AO. The threshold limit as provided under the Act, require the assessee to compulsorily get his accounts audited before the specific date. Admitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arefully, the submissions made by the appellant and the assessment order passed by the assessing officer. Assessment order passed u/s. 143(3) when passed, it-is noticed that the appellant has transacted a business of ₹ 1,24,65,192 on account of trading in the mobile vouchers apart from his other business activities of wholesale trading in pan masala, gutkha cigarettes etc. In the books of accounts produced by the appellant, he has shown only the business pertaining to pan masala, gutkha cigarettes but not pertaining to the business of trading in mobile vouchers. The turnover from the business of pan masala/gutkha/cigarettes was shown at ₹ 21,20,440 against which the gross profit of 2,07,100 was declared. Therefore, the sale transactions amounting to ₹ 1,24,65,192 pertaining to mobile vouchers remained undisclosed from the Department. Notwithstanding the fact that the appellant for the first time on 20.12.2010 during the course of assessment proceedings has admitted and disclosed the sale transactions pertaining to mobile vouchers which hitherto kept outside the books of accounts, the assessing officer has more than reasonable in computing profits from the unac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t out the defects in the accounts of Assessee and required to seek explanation of the Assessee qua those defects. If the assessee failed to explain the defects than on the basis of the book result, income cannot be determined and Assessing Officer would compute the income according to his estimation keeping in view the guiding factor for estimating such income. 8. It is pertinent to note that that section 144 would suggest that in order to estimate income, learned Assessing Officer has to exercise his discretion which should be in consonance with best of his judgment. We are conscious of the fact that in various authoritative pronouncements, it has been propounded that in making a best judgment assessment, the Assessing Officer must not act dishonestly or vindictively or capriciously. He must make, what he honestly believe to be a fair estimate of the proper figure of assessment and for this purpose he must be able to take into consideration, local knowledge, reputation of the assessee about his business, the previous history of the assessee or the similarly situated assessee. It is also pertinent to mention that judgment is a faculty to decide matter with wisdom, truly and lega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is rejected. 13. Next we take ITA no.76/RJT/2014. 14. In this appeal, grievance of the assessee is that theld.CIT(A) has erred in confirming the penalty of ₹ 72,928/- which was imposed by the AO under section 271B of the Income Tax Act. 15. As observed earlier while dealing with ITA No.60/RJT/2014 we found that the assessee has only accounted transactions qua pan masala and gutka, but did not disclose transaction qua sale of mobile recharge vouchers to the tune of ₹ 1.25 crores in his books of accounts. The AO observed that as per the provisions of section 44AB of the Income Tax Act, the assessee requires to get his accounts audited since the total turnover of the assessee exceeded ₹ 40 lakhs, which the assessee failed to do so. AO accordingly initiated proceedings under section 271B for his failure to get accounts audited and issued show cause notice. Explanation of the assessee was not found acceptable to the AO. Accordingly, the AO levied a penalty of ₹ 72,928/- under section 271B of the Act. In appeal before the first appellate authority, the action of the AO for imposing penalty under section 271B was upheld. The discussions made by the ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 21,20,440 from the trading in Panmasala/gutkha/cigarettes etc. in the return of income filed and the books of accounts produced before the assessing officer for A.Y.2008-09. the total turnover of both disclosed and undisclosed business comes to ₹ 1,45,85,632. much more than ₹ 40,00,000, accordingly attracts the provisions of compulsory audit u/s.44AB of the IT Act, 1961. To tfiat extend, the appellant is liable for penalty u/s.271B of the IT Act, 1961. Coming to the aspect that the AR raised, that the trading in mobile recharge vouchers undertaken by the appellant do not constitute purchase and sale is far from convincing. This activity is nothing but the sale of services akin to a software that 'enable communication through the mode of satellite by virtue of spectrum owned by the companies having telecom licenses in a given area. In view of this, the appellant since failed to get his accounts audited is liable for penalty u/s.271B of the IT Act, 1961. The penalty levied at ₹ 72,928 U/S.271B of the IT Act, 1961 for A.Y.2008-09 stands confirmed. 16. We find that penalty under Section 271B of the Act is imposable under the Act, if any person fails to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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