TMI Blog2019 (11) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER PER MANISH BORAD, A.M: This appeal at the instance of Assessee pertaining to A.Y. 2011-12 is directed against the order of Commissioner of Income Tax(Appeals), Ujjain, (in short CIT ), dated 26.09.2018 which is arising out of the order u/s 271B of the Income Tax Act 1961(hereinafter called as the Act ) framed on 29.06.2017 by ITO, Ujjain. 2. The assessee has raised following grounds of appeal: That on the facts and circumstances of the case, the Ld. CIT(A) erred in confirming penalty u/s 271B of the Act at ₹ 35,830/-. Levied by the Ld. ITO-1(2) Ujjain. 3. Briefly stated facts as culled out from the records are that the assessee is an individual running sole proprietorship concern in the name of M/s Shitla Textiles engaged in the business cloth trading. Assessee s case was re-opened by issuance of notice u/s 148 of the Act duly served upon the assessee on 15.04.2015. In response thereto, the return of income was filed on 15.05.2015 declaring income of ₹ 1,79,130/-. Notice u/s 143(2) of the Act duly served upon the assessee. The assessee was asked to explain the source of cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the levy of the other. The pain reading of section 44AB makes it very clear that its provisions are mandatory. The appellant not only to get his accounts audited by an accountant before the specified date but also obtain before that date the report of such audit in the prescribed form duly signed and verified by such accountant. Therefore, the AO is justified in imposing the penalty. Therefore, the penalty imposed by the AO amounting to ₹ 35,830/- is confirmed. Therefore, the appeal on these grounds is dismissed. 7. Now the assessee is in appeal before the Tribunal. 8. At the outset, Ld. counsel for the assessee submitted that the actual turnover of the assessee was ₹ 21,66,291/- which was not liable for tax audit u/s 44AB of the Act. Ld. AO has wrongly considered unaccounted turnover at ₹ 49,48,900/- for the purpose of section 44AB of the Act. The assessee was engaged in the commission basis work and has already offered the income of commission of ₹ 50,000/- being 1% of the alleged deposits of ₹ 49,48,9000/- to tax. Reliance was placed on following decisions: 1. Brij La ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Ld. AO of including a sum of ₹ 38,40,500/-, alleging the same as undisclosed turnover, to determine the limit prescribed u/s 44AB by ignoring the fact that the said amount was not recorded in regular books of accounts thus could not be considered for levy of penalty u/s 44 AB of the Income Tax Act, 1961. 2. That the appellant craves the right to add, delete, amend or abandon any of the grounds of appeal either before or at the time of hearing of appeal. 12. The above grounds were adjudicated by the I.T.A.T., Jaipur Bench in favour of the assessee observing as follows: We have considered the rival submissions as well as relevant material on record. There is no dispute that the assessee has declared the turnover of ₹ 24,80,995/- and the income was declared U/s 44AD of the Act in the return of income. The turnover declared by the assessee in the books of account and return of income does not exceed the limit provided U/s 44AB of the Act and therefore, there was no mandatory requirement of books of account to be audited U/s 44AB of the Act. The Assessing Officer during the survey U/s 133A of the Act conducted in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led to get his books of accounts audited. We find that by accepting the income offered under section 44AD(1), the AO has thus accepted the assessee's eligibility for presumptive basis of taxation under section 44AD. Once the said eligibility is accepted, if we read the provisions of section 44AD and in particular sub-section (5), it clearly provides that an eligible assessee who claims his income from the eligible business is below the presumptive rate of 8% of total turnover or gross receipts, he shall be required to maintain books of accounts and also get them audited and furnish a report as required under section 44AB of the Act. Therefore, only in a scenario, where such a claim is made by the assessee whereby he claims that his income to be lower than 8% of total turnover or gross receipts, he will be required to maintain books of accounts and get them audited. Corresponding provisions are provided in section 44AA(2)(iv) of the Act as well. In the instant case, the assessee has not made any such claim in his return of income. Further, the Revenue has accepted the claim of the assessee as being eligible for such presumptive taxation where the assessee has re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, sanctity is attached to the books of accounts, if the books are indeed account books , i.e., in original if they show on their face, that they are kept in the 'regular course of business'. So, the accounts under s. 34 of Indian Evidence Act means accounts which are maintained in the regular course of business. Accordingly we are satisfied that the record carrying entries from which the appellant admits of additional sales are not the accounts as referred to under s. 44AB of the Act. On that basis it was not open to the AO to hold that the sales of the assessee as referred in s. 44AB of the Act have exceeded to ₹ 40 lakhs and by not getting such accounts audited from an accountant, the appellant has committed a default. Such a finding arrived at by the AO is reversed. 10. In light of above discussions and in the entirety of facts and circumstances of the case, the penalty levied under section 271B is hereby deleted. In the result, the appeal of the assessee is allowed. The addition made by the Assessing Officer during the assessment proceedings on the basis of unaccounted sale cannot be regarded as the turnover for the purpose of Section 44AB of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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