Appeal details
Counselvise Citation
[2020] 111 COUNSELVISE.COM (IT) 4641 (ITAT-JAIPUR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 month(s) 28 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
17-02-2020
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
B
Assessment Year
2010-2011
Appeal Filed On
20-08-2019
Judgement Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,B JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 1052 TO 1054/JP/2019 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2010-11 SHRI SANJAY PRAKASH ADARSH MOHALLA, PIPAR CITY, BILARA, JODHPUR. CUKE VS. THE ITO, WARD-1, ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AZPPP 4151 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : NONE JKTLO DH VKSJ LS @ REVENUE BY : SHRI RUIPAL (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 04/02/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 17/02/2020 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THESE ARE THREE APPEALS FILED BY THE ASSESSEE AGAI NST THE RESPECTIVE ORDERS OF LD. CIT(A), ALWAR DATED 25.06. 2019 FOR THE ASSESSMENT YEAR 2010-11 WHEREIN HE HAS CONFIRMED TH E LEVY OF PENALTY BY THE ASSESSING OFFICER U/S 271A, 271B & 271(1)(B) OF THE IT ACT. 2. THE MATTER WAS INITIALLY FIXED FOR HEARING ON 26 .11.2019 AND NOTICE HAS BEEN SENT TO THE ASSESSEE THROUGH RPAD H OWEVER, NONE APPEARED ON BEHALF OF THE ASSESSEE THEREAFTER THE M ATTER HAS COME UP ITA NO. 1052 TO 1054 /JP/2019 SHRI SANJAY PARKASH VS. ITO 2 FOR HEARING ON 04.02.2020 WHEREIN AGAIN, THE NOTICE WAS SENT THROUGH RPAD AND THE ACKNOWLEDGEMENT HAS BEEN RECEIVED FROM THE POSTAL DEPARTMENT THAT NOTICE HAS BEEN DULY RECEIVED BY TH E ASSESSEE. HOWEVER, NONE HAS APPEARED ON BEHALF OF THE ASSESSE E NOT ANY WRITTEN SUBMISSIONS HAVE BEEN FILED. IT WAS ACCORDINGLY DE CIDED TO HEAR THE MATTER EX-PARTE QUA THE ASSESSEE AFTER HEARING THE LD. DR AND CONSIDERING THE MATERIAL AVAILABLE ON RECORD. 3. BRIEFLY THE FACTS OF THE CASE ARE THAT AS PER IN FORMATION AVAILABLE WITH THE TAX DEPARTMENT, IT WAS FOUND THAT THE ASSE SSEE WAS ENGAGED IN EXECUTING TRANSACTIONS ON NATIONAL/MULTI COMMODITY EXCHANGE AND THESE TRANSACTIONS WERE NOT VERIFIABLE FROM THE RET URN FILED BY THE ASSESSEE. ACCORDINGLY, NOTICE U/S 148 OF THE ACT WA S ISSUED HOWEVER, THERE HAS NOT BEEN COMPLIANCE TO THE SAID NOTICE NO R THE ASSESSEE HAS FILED ANY RETURN IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. FURTHER, NOTICE U/S 142(1) DATED 13.10.2017 WAS ALSO ISSUED TO THE ASSESSEE FOR FURNISHING THE DETAILS/INFORMATION HOWEVER, THERE H AS NOT BEEN ANY COMPLIANCE ON THE PART OF THE ASSESSEE. ACCORDINGLY , THE ASSESSMENT PROCEEDINGS WERE COMPLETED U/S 147 R.W.S. 143(3) OF THE ACT VIDE ORDER DATED 19.12.2017 WHEREIN INCOME OF RS. 2,03,603/- W AS BROUGHT TO TAX. SEPARATELY, PENALTY PROCEEDING U/S 271A FOR NON- MA INTENANCE OF BOOKS OF ACCOUNTS, U/S 271B OF THE ACT FOR NOT GETTING TH E BOOKS OF ACCOUNT AUDITED AND U/S 271(1)(B) FOR NON COMPLIANCE TO THE NOTICE U/S 142(1) DATED 13.10.2017 WERE INITIATED BY THE ASSESSING OF FICER. 4. IN THE PENALTY ORDER PASSED U/S 271A DATED 27.06 .2018, THE ASSESSING OFFICER STATED THAT DURING THE REASSESSME NT PROCEEDINGS, IT ITA NO. 1052 TO 1054 /JP/2019 SHRI SANJAY PARKASH VS. ITO 3 WAS NOTICED THAT THE ASSESSEE WAS ENGAGED IN DAY-TO - DAY TRADING OF COMMODITY/SHARES AND HIS TOTAL TURNOVER OF SHARE TR ADING WAS RS. 27,26,87,233/- DURING THE YEAR UNDER CONSIDERAT ION AND THE ASSESSEE HAS FAILED TO PRODUCE BOOKS OF ACCOUNTS AN D OTHER DOCUMENTS AS REQUIRED U/S 44AB OF THE IT ACT. ACCORDINGLY A S HOW CAUSE WAS AGAIN ISSUED TO THE ASSESSEE DATED 08.06.2018 HOWEVER, TH ERE HAS BEEN NO COMPLIANCE ON THE PART OF THE ASSESSEE. THE ASSESSI NG OFFICER ACCORDINGLY HELD THAT THE ASSESSEE HAS FAILED TO PR ODUCE ITS BOOKS OF ACCOUNTS AND OTHER RELEVANT DOCUMENTS AND LEVIED PE NALTY OF RS. 5,000/- U/S 271A OF THE ACT. BEING AGGRIEVED THE AS SESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS CONF IRMED THE SAID LEVY OF PENALTY AS THERE HAS BEEN AGAIN NON-COMPLIANCE O N THE PART OF THE ASSESSEE EVEN DURING THE APPELLATE PROCEEDINGS BEFO RE THE LD. CIT(A). 5. SIMILARLY, THE ASSESSING OFFICER PASSED THE ORDE R U/S 271B DATED 27.06.2018 REITERATING THE FACTS AS NOTICED ABOVE A ND STATING THAT THE ASSESSEE WAS REQUIRED TO GET ITS ACCOUNTS AUDITED B UT THE ASSESSEE HAS FAILED TO SO, WHICH IS IN VIOLATION OF SECTION 44A B 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, T HE ASSESSEE FAILED TO FURNISH COPY OF AUDITED PROFIT & LOSS ACCOUNT AND BALANCE SHEET WHICH WAS REQUIRED TO BE AUDITED IN VIEW OF THE PROVISION S OF SECTION 44AB OF THE IT ACT. ACCORDINGLY, IN THE ABSENCE OF ANY REAS ONABLE AND TANGIBLE CAUSE FOR SUCH FAILURE, PENALTY U/S 271B AMOUNTING TO RS. 1,00,000/- WAS LEVIED ON THE ASSESSEE WHICH HAS SINCE BEEN CON FIRMED BY THE LD. CIT(A). ITA NO. 1052 TO 1054 /JP/2019 SHRI SANJAY PARKASH VS. ITO 4 6. IN THE PENALTY ORDER U/S 271(1)(B) OF THE ACT DA TED 27.06.2018, THE ASSESSING OFFICER HAS LEVIED PENALTY OF RS. 10, 000/- FOR NON COMPLIANCE TO THE NOTICE ISSUED U/S 142(1) DATED 13 .10.2017 WHICH HAS SINCE BEEN CONFIRMED BY THE LD. CIT(A). 7. WE HAVE HEARD THE LD DR WHO HAS RELIED ON THE O RDER OF THE LOWER AUTHORITIES AND ALSO PERUSED THE MATERIAL AVA ILABLE ON RECORD. IN OUR VIEW, FIRST AND FOREMOST MATTER TO BE EXAMINED IS THE NATURE OF TRANSACTION UNDERTAKEN BY THE ASSESSEE DURING THE F INANCIAL YEAR RELEVANT TO IMPUGNED ASSESSMENT YEAR AND BASIS THE SAME, WHAT CAN BE CONSTRUED AS TURNOVER FOR THE PURPOSES OF SECTION 44AA AND SECTION 44AB OF THE ACT. FOR THE PURPOSES, WE REFER TO THE ASSESSMENT ORDER DATED 19.12.2017 PASSED U/S 147/143(3) OF THE INCOM E TAX ACT WHICH READS AS UNDER: .DURING THE YEAR UNDER CONSIDERATION ASSESSEE HAS SHOWN INCOME FROM OTHER SOURCES OF RS. 1,33,603/- AND LOS S FROM SPECULATION BUSINESS OF RS. 3,59,770/-. AS PER ITS DETAILS SHARE TRANSACTION OF RS. 9,90,18,425/- IS SHOWN. FU RTHER AS PER INFORMATION RECEIVED FROM BROKER NIRMAL BANG COMMODITY PVT. LTD. ASSESSEE HAS MADE PURCHASE OF RS. 27,30,46,865.5/- AND SALES OF RS.27,26,87,233/- DURING F.Y. 2009-10 IN SHARE TRANSACTION (OPTION CLOSING) UPON WHICH LOSS OF RS. 3,59,632/- SHOWN. AS PER DETAILS OF SHARE TRANSACTION REPORT TURNOVER OF THE BUSINESS EXCEEDING THE LIMIT PRESCRIBED UNDER THE A CT FOR PENALTY PROCEEDING U/S 271A AND 271B OF THE I.T. AC T, AND AS ITA NO. 1052 TO 1054 /JP/2019 SHRI SANJAY PARKASH VS. ITO 5 PER BANK ACCOUNT ASSESSEE HAS MADE TOTAL CASH DEPOS IT OF RS. 1,94,093/-.DURING THE ASSESSMENT PROCEEDING ASS ESSEE WAS ASKED TO FURNISH SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNT AND EXPLAIN WHY PROCEEDINGS U/S 271A AND 27 1B SHOULD NOT BE INITIATED AS TURNOVER OF THE BUSINESS EXCEEDING THE LIMIT PRESCRIBED UNDER THE RELEVANT PROVISION O F THE ACT. IN RESPONSE THERETO THE ASSESSEE HAS FURNISHED WRIT TEN SUBMISSION AS UNDER:- 1. 'IN FY. 2009-10, ASSESSEE WAS AGED ABOUT 22 YEAR S OLD AND HE WAS ENGAGED IN INDEPENDENT ACCOUNTING WORK OF VARIO US SMALL TRADERS. THIS WAS HIS MAIN SOURCE OF INCOME. RATHER THAN THIS HE HAS MADE SOME SPECULATIVE TRANSACTION IN ONLINE COMMODITY MARKET (NCDEX/MCX) . OTHER THAN THESE HE HAS NOT ANY OTHER BUSINESS OF PROCESSION INCOME. CO PY OF 1TR AND COMPUTATION ATTACHED HEREWITH. 2. ASSESSEE HAS MADE TRANSACTION IN NCDEX/MCX VIA BROKER NAMED NIRMAL BANG SECURITIES, MUMBAI. WE ATTACHED HEREWITH COPY OF STATEMENT SHOWING TRANSACTIONS DURING F.Y. 2009-10. 3. WE ALSO ATTACHED HEREWITH COPY OF BANK PASS BOOK (A CCOUNT NO. -11880110002063) HAVING TRANSACTION IN F.Y. 200 9-10. 4. DURING THE YEAR ASSESSEE HAS INVESTED MONEY FROM ITS OWN SAVING AND INCOME. OTHER THAN THESE HE TOOK RS. 1,2 5,000/- FROM M/S MUTHA TRADING CO. BY CHEQUE NO. 24453 OF SBBJ P IPAR CITY BRANCH. DEAR SIR AS YOU AWARE THAT IN COMMODITY MAR KET IN VERY ITA NO. 1052 TO 1054 /JP/2019 SHRI SANJAY PARKASH VS. ITO 6 LESS MONEY ONE CAN MAKE BIG TRANSACTION HERE IS SAM E CASE AND ASSESSEE MADE MANY TRANSACTIONS IN WHOLE YEAR.' THE REPLY FURNISHED BY THE ASSESSEE HAS BEEN CONSID ERED AND NOT FOUND SATISFACTORY. TOTAL CASH DEPOSIT OF RS. 1 ,94,093/- MADE BY THE ASSESSEE DURING THE YEAR. BESIDES THIS INTEREST OF RS. 9,510/. FROM PARTIES RECEIVED BY THE ASSESSE E. THUS TOTAL CASH DEPOSIT/RECEIPTS OF THE YEAR COMES TO RS.2,03,603/-BUT ASSESSEE HAS SHOWN INCOME OF RS. 1,33,603/- WHICH IS RECEIVED FROM ACCOUNT WRITING R ECEIPTS, INTEREST FROM PARTIES AND INTEREST FROM BANK. ASSES SEE HAS NOT FURNISHED AND SOURCE OF ITS OWN SAVING WHICH IS INVESTED DURING THE YEAR. IN THESE CIRCUMSTANCES, DIFFERENCE OF RS. 70,000/- (2,03,603-1,33,603) IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THEREFORE THE TOTAL INCOME OF THE ASS ESSEE IS ASSESSED AT RS. 2,03,603/-. PENALTY PROCEEDING U/S 271(1)(B), 271A, 271B AND U/S 271(1)(C) ARE HEREBY INITIATED. 8. THE UNDISPUTED FACTS WHICH ARE, THEREFORE, EMERG ING FROM THE RECORDS ARE THAT THE ASSESSEE HAS MADE SPECULATIVE TRANSACTIONS ON NCDEX/MCX COMMODITY EXCHANGE THROUGH NIRMAL BANG SE CURITIES, MUMBAI WHEREIN THE ASSESSEE HAS MADE PURCHASES OF RS. 27,30,46,865.5/- AND SALES OF RS.27,26,87,233/- AND HAS THUS INCURRED A LOSS OF RS. 3,59,632/-. IN CASE OF SPEC ULATIVE TRANSACTIONS, IN ABSENCE OF TERM TURNOVER DEFINED IN THE ACT, AS PER THE GUIDANCE NOTE ISSUED BY ICAI, THE TURNOVER HAS TO BE ITA NO. 1052 TO 1054 /JP/2019 SHRI SANJAY PARKASH VS. ITO 7 DETERMINED BY TAKING THE AGGREGATE OF BOTH POSITIVE AND NEGATIVE DIFFERENCES ARISING FROM SUCH SPECULATIVE TRANSACTI ONS AND AS AN OUTCOME OF SETTLEMENT OF SUCH CONTRACTS DURING THE YEAR WHICH IN THE INSTANT CASE COMES TO RS 3,59,632/-. SIMILAR V IEW HAS BEEN TAKEN RECENTLY BY THIS BENCH IN CASE OF SHRI RAJJAK AHMED KHAN VS. ITO (ITA NO. 11181/JP/2019 DATED 13.01.2020) WHEREIN THE RELEVANT FINDINGS READ AS UNDER:- 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD. THE LIMITED DISPUTE IN THE CAS E IN HAND IS WHETHER THE PROVISIONS OF SECTION 44AB ARE APPLICABLE IN TH E CASE OF THE ASSESSEE WHEN THE ASSESSEE HAS DONE THE SHARE TRAD ING IN INTRADAY SEGMENT AND SOME OF THE TRANSACTIONS ARE DELIVERY B ASED TRANSACTIONS TO THE EXTENT OF RS. 53,498/-. THERE IS NO DISPUTE REGARDING THE TURNOVER IN RESPECT OF THE TRANSACTIONS OF THE SHAR ES WHICH ARE DELIVERY BASED. HOWEVER, THE DISPUTE IS REGARDING THE TURNO VER IN RESPECT OF THE INTRADAY TRANSACTIONS CARRIED OUT BY THE ASSESS EE. THE AO HAS TAKEN THE TOTAL VALUE OF THE TRANSACTIONS AT RS. 2, 43,62,720/- IN THE INTRADAY NON-DELIVERY BASED TRADING SEGMENT. THERE IS NO QUARREL THAT THE TRANSACTIONS CARRIED OUT BY THE ASSESSEE IN INT RADAY NON-DELIVERY BASED SEGMENT ARE SPECULATIVE TRANSACTIONS AS PER S ECTION 43(5) OF THE ACT. THIS FACT IS ALSO ACCEPTED BY THE LD. CIT (A) IN HIS FINDING IN PARA 2.3 AS UNDER :- GROUND NO. 01 AND 02 ARE BEING TAKEN UP TOGETHER WHICH ARE INTERRELATED. I HAVE PERUSED THE FACTS OF THE CASE , THE PENALTY ORDER AND THE SUBMISSIONS OF THE APPELLANT. IT IS S EEN THAT THE ASSESSING OFFICER IMPOSED PENALTY UNDER SECTION 271 B FOR NOT ITA NO. 1052 TO 1054 /JP/2019 SHRI SANJAY PARKASH VS. ITO 8 GETTING THE ACCOUNTS AUDITED. THERE IS NO DISPUTE A S TO THE FACT 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 THES E TRANSACTIONS OF STOCK RELATED TO INTRADAY ACTIVITIE S/NON-DELIVERY BASED TRANSACTIONS. THEREFORE, THE SAME DID NOT REQ UIRE AUDIT UNDER SECTION 44AB. ASSESSEE CLAIMED THAT THE TRANSACTIONS ARE NON DELI VERY BASED AND DAILY DIFFERENCE (BY IGNORING THE SIGNS) BE TAK EN AS TURNOVER. THIS PLEA CANNOT BE ACCEPTED AS IT IS APP LICABLE FOR TRANSACTION OF DERIVATIVES WHEREAS ASSESSEE TRANSAC TED IN CASH SECURITIES WHERE NON DELIVERY BASED TRANSACTIONS AR E CLASSIFIED AS SPECULATIVE TRANSACTIONS AS PER SECTION 43(5) OF THE I.T. ACT, 1961. ACCORDINGLY ASSESSEE IS LIABLE TO GET HIS ACC OUNTS AUDITED. LOOKING TO THESE FACTS, PENALTY UNDER SECTION 271B IMPOSED BY THE ASSESSING OFFICER IS CONFIRMED. THESE GROUNDS O F APPEAL ARE DISMISSED. ONCE THESE TRANSACTIONS ARE NON-DELIVERY BASED INTR ADAY TRANSACTIONS AND CLASSIFIED AS SPECULATIVE TRANSACTION AS PER TH E PROVISIONS OF SECTION 43(5) OF THE IT ACT, THEN THE TURNOVER IN RESPECT O F THESE TRANSACTIONS HAS TO BE DETERMINED AS PER THE GUIDANCE NOTE ISSUE D BY THE INSTITUTE OF CHARTERED ACCOUNTS OF INDIA. FOR READY REFERENC E, WE REPRODUCE THE RELEVANT PART OF THE GUIDANCE NOTE IN PARA 5.14 AS UNDER :- GUIDANCE NOTE ON TAX AUDIT UNDER SECTION 44AB OF THE INCOME-TAX ACT, 1961. ITA NO. 1052 TO 1054 /JP/2019 SHRI SANJAY PARKASH VS. ITO 9 5.14. THE TURNOVER OR GROSS RECEIPTS IN RESPECT OF TRANSACTIONS IN SHARES, SECURITIES AND DERIVATIVES MAY BE DETERM INED IN THE FOLLOWING MANNER :- (A) SPECULATIVE TRANSACTION : A SPECULATIVE TRANSACTION MEANS A TRANSACTION IN WHICH A CONTRACT FOR THE PURCHASE OR SALE OF ANY COMMODITY, INCLUDING STOCKS AND SHARES, IS PERI ODICALLY OR ULTIMATELY SETTLED OTHERWISE THAN BY THE ACTUAL DELIVERY OR TRANSFER OF THE COMMODITY OR SCRIPS. THUS, IN A SP ECULATIVE TRANSACTION, THE CONTRACT FOR SALE OR PURCHASE WHIC H IS ENTERED INTO IS NOT COMPLETED BY GIVING OR RECEIVIN G DELIVERY SO AS TO RESULT IN THE SALE AS PER VALUE OF CONTRAC T NOTE. THE CONTRACT IS SETTLED OTHERWISE AND SQUARED UP BY PAY ING OUT THE DIFFERENCE WHICH MAY BE POSITIVE OR NEGATIVE. A S SUCH, IN SUCH TRANSACTION THE DIFFERENCE AMOUNT IS TURNOVER . IN THE CASE OF AN ASSESSEE UNDERTAKING SPECULATIVE TRANSAC TIONS THERE CAN BE BOTH POSITIVE AND NEGATIVE DIFFERENCES ARISING BY SETTLEMENT OF VARIOUS SUCH CONTRACTS DURING THE YEAR. EACH TRANSACTION RESULTING INTO WHETHER A POSITIVE OR NEGATIVE DIFFERENCE IS AN INDEPENDENT TRANSACTION. FURTHER, AMOUNT PAID ON ACCOUNT OF NEGATIVE DIFFERENCE PAID IS NOT RELATED TO THE AMOUNT RECEIVED ON ACCOUNT OF POSITIVE DIFFEREN CE. IN SUCH TRANSACTIONS THOUGH THE CONTRACT NOTES ARE ISS UED FOR FULL VALUE OF THE PURCHASED OR SOLD ASSET THE ENTRI ES IN THE BOOKS OF ACCOUNT ARE MADE ONLY FOR THE DIFFERENCES. ACCORDINGLY, THE AGGREGATE OF BOTH POSITIVE AND NEG ATIVE DIFFERENCES IS TO BE CONSIDERED AS THE TURNOVER OF SUCH TRANSACTIONS FOR DETERMINING THE LIABILITY TO AUDIT VIDE SECTION 44AB. ITA NO. 1052 TO 1054 /JP/2019 SHRI SANJAY PARKASH VS. ITO 10 THE TURNOVER HAS NOT BEEN DEFINED IN THE IT ACT AND PARTICULARLY IN RESPECT OF THE SPECULATIVE TRANSACTIONS IN SHARES A ND SECURITIES. THEREFORE, THE GUIDANCE NOTE OF ICAI IS A RELEVANT AND PROPER GUIDANCE FOR DETERMINING THE TURNOVER IN RESPECT OF SUCH SPECULATIVE TRANSACTIONS. AS IT IS CLEAR FROM THE GUIDANCE NOT E ISSUED BY THE ICAI THAT THE TURNOVER IN RESPECT OF NON-DELIVERY BASED SPECULATIVE TRANSACTIONS INCLUDING STOCK AND SHARES HAS TO BE D ETERMINED BY TAKING THE AGGREGATE OF BOTH POSITIVE AND NEGATIVE DIFFERE NCES ARISING FROM SUCH TRANSACTIONS AND AS AN OUT-COME OF SETTLEMENT OF SUCH CONTRACTS DURING THE YEAR. WE FIND THAT THE ASSESSEE HAS PRO DUCED THE DETAILS OF THE SPECULATIVE TRANSACTIONS AS WELL AS DELIVERY BA SED 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 TR ANSACTIONS OF SHARES TO THE TUNE OF RS. 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 SPECULAT IVE TRANSACTIONS GIVEN IN THE ABOVE TABLE. THEREFORE, BY TAKING THE AGGREGATE OF THE POSITIVE AND NEGATIVE DIFFERENCES AS WELL AS THE TU RNOVER OF THE DELIVERY BASED TRANSACTIONS, THE TOTAL TURNOVER OF THE ASSES SEE COMES TO RS. 3,15,280.69. HENCE, WHEN THE TURNOVER OF THE ASSES SEE IS LESS THAN THE THRESHOLD LIMIT PROVIDED UNDER SECTION 44AB, TH EN THE ASSESSEE IS ITA NO. 1052 TO 1054 /JP/2019 SHRI SANJAY PARKASH VS. ITO 11 NOT REQUIRED TO GET ITS BOOKS OF ACCOUNT AUDITED IN TERMS OF SECTION 44AB OF THE IT ACT AND CONSEQUENTLY THE PENALTY PRO VISION OF SECTION 271B OF THE IT ACT IS NOT ATTRACTED. EVEN OTHERWIS E, WHEN THIS ISSUE OF TURNOVER IS A DEBATABLE ISSUE AND THE ASSESSEE HA S CLAIMED THIS TURNOVER AS RS. 3,15,280.69 IF COMPUTED IN TERMS O F THE GUIDANCE NOTE OF ICAI, THEN THE SAID EXPLANATION OF THE ASSE SSEE WOULD BE REGARDED AS REASONABLE AND BONAFIDE AS PER THE PROV ISIONS OF SECTION 273B OF THE IT ACT AND CONSEQUENTLY NO PENALTY UNDE R SECTION 271B IS LEVIABLE. ACCORDINGLY, THE PENALTY LEVIED UNDER SE CTION 271B IS DELETED. 9. THUS, WHERE TURNOVER IS LESS THAN THE THRESHOLD PROVIDED UNDER SECTION 44AA OF THE ACT, THE ASSESSEE WAS NOT REQUIRED TO MAINTAIN HIS BOOKS OF ACCOUNTS IN RESPECT OF SUCH T RANSACTIONS. ON SAME ANALOGY, WHERE THE BOOKS OF ACCOUNTS ARE NOT R EQUIRED TO BE MAINTAINED, THE QUESTION OF GETTING THE SAME AUDITE D DOESNT ARISE FOR CONSIDERATION AND IN ANY CASE, THE TURNOVER IS LESS THAN THE PRESCRIBED THRESHOLD 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. 10. REGARDING LEVY OF PENALTY U/S 271(1)(B) OF THE ACT FOR 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 EXP LANATION FURNISHED BY THE ASSESSEE FOR NON-COMPLIANCE TO THE SAID NOTICE. THEREFORE, LEVY OF ITA NO. 1052 TO 1054 /JP/2019 SHRI SANJAY PARKASH VS. ITO 12 PENALTY U/S 271(1)(B) OF THE ACT IN ABSENCE OF ANY REASONABLE CAUSE SHOWN BY THE ASSESSEE IS HEREBY CONFIRMED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO. 1052/JP/19 AND 1053/JP/19 ARE ALLOWED AND APPEAL IN ITA NO. 10 54/JP/19 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17/02/2020. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 17/02/2020. * SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI SANJAY PARKASH, JODHPUR. 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD-1, ALWAR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 1052 TO 1054/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR.
