SHRI VIJAY KUMAR JAIN, AJMER V. INCOME TAX OFFICER, WARD-1-2, AJMER

ITA 1115/JPR/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7060 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 27-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause; Speculative transactions
• Section: 273B; 143(3); 43(5); 271B; 44AB; 13

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH VC DB, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,O A 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. 1115/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2015-16. SHRI VIJAY KUMAR JAIN, 24/131, SAND BUILDING, BABU MOHALLA, KAISER GANJ, AJMER. CUKE VS. THE INCOME TAX OFFICER, WARD 1(2), AJMER. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AARPJ 5018 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : NONE JKTLO DH VKSJ LS@ REVENUE BY : MS CHANCHAL MEENA (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 26.08.2020. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 07/09/2020. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 30 TH JULY, 2018 OF LD. CIT (A), AJMER ARISING FROM THE PENALTY ORDER PASSED UNDER SECTION 271A OF THE IT ACT FOR THE ASSESSMENT YEAR 2015-16. NON E HAS APPEARED ON BEHALF OF THE ASSESSEE WHEN THIS APPEAL WAS CALLED FOR HEARING. S INCE THE ASSESSEE HAS ALREADY FILED THE WRITTEN SUBMISSIONS AND PAPER BOOK IN THI S CASE, THEREFORE, WE PROPOSED TO DECIDE THIS APPEAL ON THE BASIS OF WRITTEN SUBMISSI ONS FILED BY THE ASSESSEE AS WELL AS THE ARGUMENTS OF THE LD. D/R. THE ASSESSEE HAS R AISED THE FOLLOWING GROUNDS :- 1. THAT PENALTY UNDER SECTION 271A CONFIRMED BY L D. CIT (A) IS BAD IN LAW AND FACTS OF THE CASE AS 2 ITA NO. 1115/JP/2018 SHRI VIJAY KUMAR JAIN, AJMER. APPELLANT DERIVED INCOME ONLY FROM SHARES DERIVATIV E TRANSACTIONS. INCOME OF RS. 2,30,036/- WAS RETURNED BY APPELLANT (IN ACCORDANCE WITH DETAILS OF TRANSAC TIONS, LEDGER ACCOUNTS, BANK STATEMENTS, GAIN LOSS STATEME NTS AND CONTRACT NOTES, ETC. PROVIDED BY BROKER M/S. KOTAK SECURITIES). LD. A.O. ASSESSED INCOME AT RETURNED FIGURES VIDE ORDER UNDER SECTION 143(3) DA TED 19.09.2017. SECTION 44AA(2) ONLY MANDATES THAT EVERY PERSON SHA LL KEEP AND MAINTAIN SUCH BOOKS OF ACCOUNTS AND OTHER DOCUMENTS AS MAY ENABLE THE A.O. TO COMPUTE HIS TOT AL INCOME IN ACCORDANCE WITH THE PROVISIONS OF LAW. THE LD. AOS APPARENT ACT OF COMPUTING INCOME AT RETURNED INCOME FIGURES IS EVIDENCE OF THE APPROVAL AND OTHE R DOCUMENTS BY LD. A.O. AS THERE WAS NO FAILURE OF THE NATURE DESCRIBED IN SECTION 271A (READ WITH SECTION 44AA) PENALTY UNDER SECTION 271A NEEDS TO BE QUASHED. 2. THAT THE APPELLANT CARVES TO ADD, AMEND AND ALTE R THE GROUND OF APPEAL BEFORE OR AT THE TIME OF APPELLATE HEARING. THE HEARING OF THE APPEAL IS CONCLUDED THROUGH VIDE O CONFERENCE DUE TO PREVAILING CONDITION OF COVID 19 PANDEMIC. 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTED THAT THE ASSESSEE WAS HAVING THE TURNOVER FROM THE TRANSACTIONS OF PU RCHASE AND SALE OF SHARES OF RS. 47.86 CRORES BUT THE ASSESSEE IS NOT MAINTAINING PR OPER BOOKS OF ACCOUNT. ACCORDINGLY THE AO INITIATED THE PROCEEDINGS UNDER SECTION 271A AND 271B OF THE IT ACT FOR NON MAINTENANCE OF BOOKS OF ACCOUNT AND NOT AUDITING OF THE SAME. THE AO ALSO LEVIED PENALTY UNDER SECTION 271A AS WELL AS U NDER SECTION 271B OF THE IT ACT. THE ASSESSEE CHALLENGED THE LEVY OF PENALTY UNDER S ECTION 271A AND 271B BEFORE THE LD. CIT (A). THE LD. CIT (A) DELETED THE PENALTY M ADE UNDER SECTION 271B BUT 3 ITA NO. 1115/JP/2018 SHRI VIJAY KUMAR JAIN, AJMER. CONFIRMED THE PENALTY LEVIED UNDER SECTION 271A OF THE ACT. IN THE WRITTEN SUBMISSIONS, THE ASSESSEE HAS SUBMITTED THAT THE AO HAS TAKEN THE TURNOVER IN RESPECT OF DERIVATIVE TRANSACTION IN SHARES AND SEC URITIES BY CONSIDERING THE TOTAL AMOUNT INSTEAD OF CONSIDERING THE POSITIVE AND NEGA TIVE OUTCOME OF THE DERIVATIVE TRANSACTIONS. THE ASSESSEE HAS FURTHER POINTED OUT THAT EVEN THE LD. CIT (A) WHILE DELETING THE PENALTY LEVIED UNDER SECTION 271B HAS ACCEPTED THE FACT THAT THE ASSESSEE HAS ENTERED INTO DERIVATIVE/F & O TRANSACT IONS AND THE TURNOVER OF F & O TRANSACTIONS WAS ONLY RS. 53,54,967/- AND, THEREFOR E, THE ASSESSEE WAS NOT REQUIRED TO GET HIS ACCOUNTS AUDITED UNDER SECTION 44AB OF T HE ACT. 3. ON THE OTHER HAND, THE LD. D/R HAS RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THERE ARE NO SPECIFIC DETA ILS GIVEN BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS AS WELL AS PENALTY PROCE EDINGS TO SHOW THAT THE TURNOVER OF THE ASSESSEE IS ONLY RS. 28,20,974/- WH ICH WAS CLAIMED BY THE ASSESSEE. WHEREAS THE AO HAS NOTED THAT THE TURNOVER OF THE A SSESSEE IS RS. 47.86 CRORES. THE LD. D/R HAS SUBMITTED THAT THE EVIDENCE BROUGHT ON RECORD BY THE AO CANNOT BE IGNORED. HE HAS ALSO RELIED UPON A DECISION OF HON BLE DELHI HIGH COURT IN CASE OF SUMAN PODDAR VS. ITO, 112 TAXMAN.COM 329 (DEL.) AND SLP FILED BY THE ASSESSEE HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT REP ORTED IN 112 TAXMANN.COM 330 (SC). 4. AT THE OUTSET, WE NOTE THAT THIS TRIBUNAL HAS TA KEN A CONSISTENT VIEW THAT THE TURNOVER IN RESPECT OF DERIVATIVE TRANSACTIONS HAS TO BE COMPUTED BY TAKING THE TOTAL SUM OF POSITIVE AND NEGATIVE OUTCOME OF THE TRANSAC TIONS INSTEAD OF THE TOTAL AMOUNT OF TRANSACTION. IN CASE OF SANTOSH KUMAR VS . ITO IN ITA NO. 1093/JP/2019 VIDE ORDER DATED 03.07.2020 THIS TRIBUNAL HAS HELD AS UNDER :- 4 ITA NO. 1115/JP/2018 SHRI VIJAY KUMAR JAIN, AJMER. 2. WE HAVE HEARD THE LD. AR AS WELL AS LD. DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE ASSESSING OFFICER WHILE PASSING THE SCRUTINY ASSESSMENT U/S 143(3) R.W.S. 147 OF THE AC T HAS GIVEN THE FINING THAT THE ASSESSEE IS NOT MAINTAINING THE BOO KS OF ACCOUNT AND THE TURNOVER OF THE ASSESSEE IN RESPECT OF DERIVATI VE TRANSACTIONS ON MCX IS MORE THAN RS. 127 CR. THUS, THE AO AFTER FRA MING THE ASSESSMENT INITIATED PROCEEDING FOR LEVY OF PENALTY U/S 271A AS WELL AS 271B OF THE ACT. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT(A) AGAINST THE LEVY OF PENALTY U/S 271A AS WELL AS 271B OF THE ACT. THE LD. CIT(A) DELETED THE PENALTY LEVIED U/S 271A OF THE ACT WHILE PASSING EVEN DATED ORDER BUT CONFIRMED THE PE NALTY LEVIED U/S 271B OF THE ACT. WE NOTE THAT THE ASSESSING OFFICER HAS PROCEEDED ON BASIS THAT THE TURNOVER OF DERIVATIVE MORE THAN RS . 127 CR. WHEREAS TOTAL DIFFERENCE OF POSITIVE AND NEGATIVE OUTCOME O F SPECULATIVE TRANSACTIONS IS ONLY RS. 22,55,040/-. THE DETAILS O F THE SPECULATIVE TRANSACTIONS CARRIED OUT BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAVE BEEN REPRODUCED BY THE AO AT PAG E 3 AS UNDER:- SYMBOLS SALE PURCHASE DIFF IN QTY PROFIT/LOSS QTY AMOUNT QTY AMOUNT COPPER 410 126596650 410 126510850 0 85800 CRUDEOIL 80 27252700 80 27214100 0 38600 GOLD 31 51116300 31 51421400 0 - 305100 GOLDM 65 10826480 65 10989610 0 - 163130 LEAD 111 57909750 111 57706500 0 203250 NATURAL GAS 1168 336758750 1168 336731375 0 27375 NICKEL 535 116574650 535 117306600 0 - 731950 SOLVER 496 392820660 496 393569940 0 - 749280 SILVERM 1110 147462115 1110 147567695 0 - 105580 ZINC 5 2727250 5 2714750 0 12500 4011 1270045305 4011 1271732820 0 - 1687515 5 ITA NO. 1115/JP/2018 SHRI VIJAY KUMAR JAIN, AJMER. FROM THE ABOVE TABLE IT IS CLEAR THAT IF THE TOTAL SOME OF THE NEGATIVE AND POSITIVE OUTCOME OF THE SPECULATIVE TRANSACTION S IS TAKING INTO CONSIDERATION THE IT WOULD BE RS. 20,55,040/-. THOU GH THE TURNOVER IN CASE OF SPECULATIVE TRANSACTIONS IS NOT DEFINED IN THE INCOME TAX ACT FOR THE PURPOSE OF SECTION 44AA AND 44AB OF THE ACT AND HOWEVER, THE GUIDANCE NOTE ON TAX AUDIT U/S 44AB OF THE IT ACT I SSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANT OF INDIA (ICAI) W OULD BE RELEVANT ON THIS POINT. WE FIND THAT THIS TRIBUNAL IN CASE OF S HRI RAJJAK AHMED KHAN VS. ITO IN ITA NO. 1181/JP/2019 VIDE ORDER DATED 13 .01.2020 HAS CONSIDERED AN IDENTICAL ISSUE IN PARA 5 AS UNDER:- WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL A S THE RELEVANT MATERIAL ON RECORD. THE LIMITED DISPUTE I N THE CASE IN HAND IS WHETHER THE PROVISIONS OF SECTION 44AB ARE APPLICABLE IN THE CASE OF THE ASSESSEE WHEN THE ASSESSEE HAS DON E THE SHARE TRADING IN INTRADAY SEGMENT AND SOME OF THE TRANSAC TIONS ARE DELIVERY BASED TRANSACTIONS TO THE EXTENT OF RS. 53 ,498/-. THERE IS NO DISPUTE REGARDING THE TURNOVER IN RESPECT OF THE TRANSACTIONS OF THE SHARES WHICH ARE DELIVERY BASED . HOWEVER, THE DISPUTE IS REGARDING THE TURNOVER IN RESPECT OF THE INTRADAY TRANSACTIONS CARRIED OUT BY THE ASSESSEE. THE AO H AS 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 AS SESSEE IN INTRADAY NON-DELIVERY BASED SEGMENT ARE SPECULATIVE TRANSACTIONS AS PER SECTION 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 6 ITA NO. 1115/JP/2018 SHRI VIJAY KUMAR JAIN, AJMER. ASSESSING OFFICER IMPOSED PENALTY UNDER SECTION 271 B FOR NOT 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 TAKEN A S TURNOVER. THIS PLEA CANNOT BE ACCEPTED AS IT IS APPLICABLE FOR TRANSACT ION OF DERIVATIVES WHEREAS ASSESSEE TRANSACTED IN CASH SECURITIES WHER E NON DELIVERY BASED TRANSACTIONS ARE CLASSIFIED AS SPECULATIVE TR ANSACTIONS AS PER SECTION 43(5) OF THE I.T. ACT, 1961. ACCORDINGLY AS SESSEE IS LIABLE TO GET HIS ACCOUNTS AUDITED. LOOKING TO THESE FACTS, PENAL TY UNDER SECTION 271B IMPOSED BY THE ASSESSING OFFICER IS CONFIRMED. THESE GROUNDS OF 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 R ESPECT OF THESE TRANSACTIONS HAS TO BE DETERMINED AS PER THE GUIDAN CE NOTE ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTS OF INDIA. FOR READY REFERENCE, 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. 7 ITA NO. 1115/JP/2018 SHRI VIJAY KUMAR JAIN, AJMER. 5.14. THE TURNOVER OR GROSS RECEIPTS IN RESPECT OF TRANSACTIONS IN SHARES, SECURITIES AND DERIVATIVES MAY BE DETERMINE D 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 PERIODIC ALLY OR ULTIMATELY SETTLED OTHERWISE THAN BY THE ACTUAL DELIVERY OR TR ANSFER OF THE COMMODITY OR SCRIPS. THUS, IN A SPECULATIVE TRANSA CTION, THE CONTRACT FOR SALE OR PURCHASE WHICH IS ENTERED INTO IS NOT COMPLETED BY GIVING OR RECEIVING DELIVERY SO AS TO RESULT IN THE SALE AS PER VALUE OF CONTRACT NOTE. THE CONTRACT IS SETTLED OTH ERWISE AND SQUARED UP BY PAYING OUT THE DIFFERENCE WHICH MAY B E POSITIVE OR NEGATIVE. AS SUCH, IN SUCH TRANSACTION THE DIFFEREN CE AMOUNT IS TURNOVER. IN THE CASE OF AN ASSESSEE UNDERTAKING SPECULATIVE TRANSACTIONS THERE CAN BE BOTH POSITIVE AND NEGATIV E DIFFERENCES ARISING BY SETTLEMENT OF VARIOUS SUCH CONTRACTS DUR ING 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 DIFFERENCE. IN SUCH TRANSACTIONS THOUGH THE CONTRACT NOTES ARE ISSUED FOR FULL VALUE OF THE PURCHASED OR SOLD ASSET THE ENTRIES IN THE BOOKS OF ACCOUNT A RE MADE ONLY FOR THE DIFFERENCES. ACCORDINGLY, THE AGGREGATE OF BOT H POSITIVE AND NEGATIVE DIFFERENCES IS TO BE CONSIDERED AS THE TUR NOVER OF SUCH TRANSACTIONS FOR DETERMINING THE LIABILITY TO AUDIT VIDE SECTION 44AB. 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 8 ITA NO. 1115/JP/2018 SHRI VIJAY KUMAR JAIN, AJMER. 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 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 9 ITA NO. 1115/JP/2018 SHRI VIJAY KUMAR JAIN, AJMER. 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. THUS, IN THE ABOVE CASE ON IDENTICAL ISSUE THE TRIB UNAL HAS CONSIDERED THE GUIDANCE NOTE OF ICAI IN RESPECT OF THE TAX AUD IT U/S 44AB OF THE ACT WHEREIN THE TURNOVER OR GROSS RECEIPT IN RESPEC T OF SPECULATIVE TRANSACTIONS HAS BEEN CONSIDERED AS SOME TOTAL OF P OSITIVE AND NEGATIVE OUTCOME OF THE SPECULATIVE TRANSACTIONS. T HIS TRIBUNAL IN A SUBSEQUENT DECISION DATED 17.02.2020 IN CASE OF SHR I SANJAY PRAKASH VS. ITO IN ITA NO. 1052 TO 1054/JP/2019 HAS AGAIN C ONSIDERED THE SAID THIS ISSUE AND BY FOLLOWING THE EARLIER DECISION AC CEPTED THE CONTENTION OF THE ASSESSEE THAT TURNOVER IN RESPECT OF THE SPE CULATIVE TRANSACTIONS SHALL BE POSITIVE AND NEGATIVE DIFFERENCES OF THE T RANSACTIONS AND NOT VOLUME OF THE SPECULATIVE TRANSACTIONS. ACCORDINGLY IN VIEW OF THE CONSIST VIEW TAKEN BY THIS TRIBUNAL THE TURNOVER OF THE ASSESSEE WOULD NOT EXCEED THE LIMIT AS PROVIDED U/S 44AB, THE PENA LTY LEVIED U/S 271B IS DELETED. ACCORDINGLY, WHEN THE TURNOVER HAS TO BE COMPUTED O NLY BY TAKING THE POSITIVE AND NEGATIVE OUTCOME OF THE TRANSACTIONS AND NOT THE EN TIRE VOLUME OF THE TRANSACTIONS, THE TURNOVER OF THE ASSESSEE IS WRONGLY CONSIDERED BY THE AO WHILE LEVYING THE PENALTY UNDER SECTION 271A OF THE ACT. EVEN OTHERW ISE, WHEN THE ISSUE OF TURNOVER IN CASE OF DERIVATIVE TRANSACTIONS IS A DEBATABLE I SSUE, THEN THE ASSESSEE CANNOT BE PENALIZED FOR NOT MAINTAINING THE BOOKS OF ACCOUNT AS THE CASE WOULD DEFINITELY FALL UNDER THE PROVISIONS OF SECTION 273B OF THE IT ACT WHICH CONTEMPLATES THAT NO 10 ITA NO. 1115/JP/2018 SHRI VIJAY KUMAR JAIN, AJMER. PENALTY SHALL BE IMPOSABLE ON A PERSON OR THE ASSES SEE FOR ANY FAILURE INTER ALIA ATTRACTING THE PROVISIONS OF SECTION 271A IF HE PRO VES THAT THERE WAS A REASONABLE CAUSE FOR THE SAID FAILURE. THE SHOWING OF THE TUR NOVER BY THE ASSESSEE FROM A DERIVATIVE TRANSACTION IS A BONAFIDE EXPLANATION. A CCORDINGLY, THE PENALTY LEVIED UNDER SECTION 271A OF RS. 25,000/- IS DELETED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER IS PRONOUNCED IN THE OPEN COURT ON 07/09 /2020. SD/- SD/- ( FOE FLAG ;KNO ) ( FOT; IKY JKWO (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 07/09/2020. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI VIJAY KUMAR JAIN, AJMER. 2. THE RESPONDENT THE ITO WARD 1(2), AJMER. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 1115/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR