TMI Blog2020 (3) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... hold under section 44AB of the Act. In such a scenario, there is no basis to hold that there was any violation of provisions of section 44AA and section 44AB of the Act and consequently, the penalty levied u/s 271A and 271B is hereby deleted and the orders of the lower authorities are set-aside. Levy of penalty U/s 271(1)(b) - non compliance to the notice issued U/s 142(1) dated 13.10.2017 - We find that there is nothing on record in terms of any explanation furnished by the assessee for non-compliance to the said notice. Therefore, levy of penalty u/s 271(1)(b) of the Act in absence of any reasonable cause shown by the assessee is hereby confirmed. - ITA. No. 1052 to 1054/JP/2019 - - - Dated:- 17-2-2020 - Shri Vijay Pal Rao, JM And Shri Vikram Singh Yadav, AM For the Assessee : None For the Revenue : Shri Ruipal (JCIT) ORDER PER: VIKRAM SINGH YADAV, A.M. These are three appeals filed by the assessee against the respective orders of ld. CIT(A), Alwar dated 25.06.2019 for the assessment year 2010-11 wherein he has confirmed the levy of penalty by the Assessing officer u/s 271A, 271B 271(1)(B) of the IT Act. 2. The matter was initially fixed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther relevant documents and levied penalty of ₹ 5,000/- U/s 271A of the Act. Being aggrieved the assessee carried the matter in appeal before the ld. CIT(A) who has confirmed the said levy of penalty as there has been again non-compliance on the part of the assessee even during the appellate proceedings before the ld. CIT(A). 5. Similarly, the Assessing Officer passed the order U/s 271B dated 27.06.2018 reiterating the facts as noticed above and stating that the assessee was required to get its accounts audited but the assessee has failed to so, which is in violation of Section 44AB of the Act. A show cause notice was issued dated 08.06.2018 but there has been non compliance to the said issued notice accordingly, the assessee failed to furnish copy of audited Profit Loss account and balance sheet which was required to be audited in view of the provisions of Section 44AB of the IT Act. Accordingly, in the absence of any reasonable and tangible cause for such failure, penalty U/s 271B amounting to ₹ 1,00,000/- was levied on the assessee which has since been confirmed by the ld. CIT(A). 6. In the penalty order U/s 271(1)(b) of the Act dated 27.06.2018, the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during F.Y. 2009-10. 3. We also attached herewith copy of bank pass book (account no. -11880110002063) having transaction in F.Y. 2009-10. 4. During the year assessee has invested money from its own saving and income. Other than these he took ₹ 1,25,000/- from M/s Mutha Trading Co. by cheque no. 24453 of SBBJ pipar city Branch. Dear Sir as you aware that in commodity market in very less money one can make big transaction here is same case and assessee made many transactions in whole year. The reply furnished by the assessee has been considered and not found satisfactory. Total cash deposit of ₹ 1,94,093/- made by the assessee during the year. Besides this interest of ₹ 9,510/. from parties received by the assessee. Thus total cash deposit/receipts of the year comes to ₹ 2,03,603/-but assessee has shown income of ₹ 1,33,603/- which is received from account writing receipts, interest from parties and interest from bank. Assessee has not furnished and source of its own saving which is invested during the year. In these circumstances, difference of ₹ 70,000/- (2,03,603-1,33,603) is added to the total income of the assessee. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the turnover of the assessee is more than the limit prescribed under section 44AB and the assessee has not got his accounts audited. Assessee has taken plea that these transactions of stock related to intraday activities/non-delivery based transactions. Therefore, the same did not require audit under section 44AB. Assessee claimed that the transactions are non delivery based and daily difference (by ignoring the signs) be taken as turnover. This plea cannot be accepted as it is applicable for transaction of derivatives whereas assessee transacted in cash securities where non delivery based transactions are classified as speculative transactions as per section 43(5) of the I.T. Act, 1961. Accordingly assessee is liable to get his accounts audited. Looking to these facts, penalty under section 271B imposed by the Assessing Officer is confirmed. These grounds of appeal are dismissed. Once these transactions are non-delivery based intraday transactions and classified as speculative transaction as per the provisions of section 43(5) of the IT Act, then the turnover in respect of these transactions has to be determined as per the Guidance Note issued by the Institute of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of settlement of such contracts during the year. We find that the assessee has produced the details of the speculative transactions as well as delivery based transactions and also given the computation of the turnover as under :- Intraday Positive or favorable differences (sheet enclosed for this) 109092.10 Intraday Negative or unfavorable differences (sheet enclosed for this) 152689.69 Sale of delivery based transactions 53498.9 315280.69 There is no dispute regarding the delivery based transactions of shares to the tune of ₹ 53,498.90. We have verified the computation of the turnover in respect of intraday non-delivery based transactions and the positive and negative differences of these speculative transactions given in the above table. Therefore, by taking the aggregate of the positive and negative differences as well as the turnover of the delivery based transactions, the total turnover of the assessee comes to ₹ 3,15,280.69. Hence, when the turnover of the assessee is less than ..... X X X X Extracts X X X X X X X X Extracts X X X X
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