SUBHASH BHASKAR UTTURKAR, MUMBAI V. ITO 18(2)(2), MUMBAI

ITA 1365/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3545 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 05-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K KARDA M
• Assessee Lawyers: ASHOK SHAH
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH I, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NO. 1365/MUM/2015 (ASSESSMENT YEAR : 2008-09) SUBHASH BHASKAR UTTURKAR, 14-B, MEHTA APARTMENTS, PROF. AGASHE MARG, DADAR, MUMBAI 400 025 PAN: AAAPU 1559G ..... APPELLANT VS. THE ITO 18(2)(2). MUMBAI. .... RESPONDENT APPELLANT BY : SHRI ASHOK SHAH RESPONDENT BY : SHRI A.K.KARDAM DATE OF HEARING : 21/07/2016 DATE OF PRONOUNCEMENT : 17/08/2016 ORDER PER G.S.PANNU,A.M: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERTAIN ING TO ASSESSMENT YEAR 2008-09 IS DIRECTED AGAINST AN ORD ER PASSED BY CIT(A)- 33 MUMBAI DATED 10/12/2014, WHICH IN TURN ARISES OU T OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 271B OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 11/04/2012. 2 ITA NO. 1365/MUM/2015 (ASSESSMENT YEAR : 2008-09) 2. THE ONLY ISSUE IN THIS APPEAL IS WITH REGARD TO PENALTY IMPOSED UNDER SECTION 271B OF THE ACT OF RS.1.00 LAC FOR TH E FAILURE TO GET THE ACCOUNTS AUDITED IN TERMS OF SECTION 44AB OF THE ACT. 3. BRIEFLY PUT, THE RELEVANT FACTS ARE THAT THE ASS ESSEE IS AN INDIVIDUAL, WHO FIELD HIS RETURN OF INCOME ON 28/05 /2008 DECLARING AN INCOME OF RS.72,860/-. THE RETURN OF INCOME FILED BY THE ASSESSEE, INTER-ALIA, INCLUDED GAIN/LOSS ON SALE OF PURCHASE OF SHARES, WHICH WAS TREATED AS CAPITAL GAINS. THE ASSESSING OFFICER HO WEVER, TREATED THE TRANSACTION IN SALE OF SHARES AND SECURITIES AS A BUSINESS INCOME AND COMPUTED THE TOTAL INCOME AT RS.11,33,790/-. THE A FORESAID ASPECTS ARE NOT IN DISPUTE BEFORE US. SUBSEQUENT TO THE ASSESS MENT, THE ASSESSING OFFICER NOTED THAT SINCE THE TRANSACTIONS OF SALE A ND PURCHASE OF SHARES HAVE BEEN TREATED AS TRANSACTIONS OF BUSINESS, THE PROVISIONS OF SECTION 44AB OF THE ACT ARE ATTRACTED. IN TERMS OF SECTI ON 44AB OF THE ACT AN ASSESSEE HAS TO GET HIS ACCOUNTS AUDITED IF TURNOVE R OF THE BUSINESS EXCEEDS THE LIMITS SPECIFIED THEREIN. CONSIDERING THAT THE ASSESSEES TURNOVER OF THE TRANSACTIONS WAS IN EXCESS OF THE L IMIT PRESCRIBED IN SECTION 44AB OF THE ACT, THE ASSESSING OFFICER HELD THAT THE ASSESSEE WAS LIABLE TO GET HIS ACCOUNTS AUDITED UNDER SECTIO N 44AB OF THE ACT. FOR THE FAILURE TO GET THE ACCOUNTS AUDITED THE AS SESSING OFFICER HAS LEVIED PENALTY OF RS.1.00 LAC UNDER SECTION 271B OF THE ACT. THE LEVY OF PENALTY HAS SINCE AFFIRMED BY THE CIT(A), AGAINST W HICH ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL . 4. BEFORE US, THE LD. REPRESENTATIVE FOR THE ASSESS EE POINTED OUT THAT THE ASSESSEE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNT AS IT WAS 3 ITA NO. 1365/MUM/2015 (ASSESSMENT YEAR : 2008-09) NOT HAVING ANY BUSINESS INCOME. IT WAS POINTED OUT THAT ASSESSEE IS A RETIRED INDIVIDUAL, WHO WAS DERIVING INCOME FROM TH E SAVINGS HELD IN FIXED DEPOSITS, BONDS, DEBENTURES, MUTUAL FUNDS AND ALSO IN EQUITY SHARES. NO BOOKS OF ACCOUNT WERE MAINTAINED AND, T HEREFORE, THERE WAS NO REQUIREMENT OF CONSIDERING THE APPLICABILITY OF THE SECTION OF 44AB OF THE ACT. MOREOVER, IT WAS ALSO POINTED OUT THAT IT IS ONLY DURING THE ASSESSMENT PROCEEDINGS THAT THE TRANSACTIONS O F SALE AND PURCHASE OF SHARES HAVE BEEN TREATED AS A BUSINESS INCOME, W HEREAS ASSESSEE HAD TREATED THE SAME AS ASSESSABLE UNDER THE HEADS CAPITAL GAINS. 5. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE HAS JUSTIFIED THE LEVY OF PENALTY FOR THE REASONS ADVANCED BY THE ASSESSING OFFICER, WHICH WE HAVE ALREADY ADVERTED IN THE EARLIER PARAS AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. IN THE PRESENT CASE, IT IS QUITE EVIDENT THAT ASSESSEE IS NOT MAINTAINING ANY BOOKS OF ACCOUNT. OSTENSIBLY, THE FAILURE TO MAIN TAIN BOOKS OF ACCOUNT CAN LEAD TO LEVY OF PENALTY UNDER SECTION 271A OF T HE ACT AND PENALTY UNDER SECTION 271B OF THE ACT CANNOT BE LEVIED FOR FAILURE TO MAINTAIN BOOKS OF ACCOUNT. THE AFORESAID PROPOSITION HAS BE EN LAID DOWN BY THE HONBLE GAUHATI HIGH COURT IN THE CASE OF SURAJMAL PARSURAM TODI VS CIT, 222 ITR 691(GAU) AND IN OUR VIEW THE FACTS OF THE PRESENT CASE ARE FULLY COVERED BY THE SAID JUDGMENT. ACCORDINGLY, W E SET-ASIDE THE ORDER 4 ITA NO. 1365/MUM/2015 (ASSESSMENT YEAR : 2008-09) OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO D ELETE THE PENALTY OF RS.1.00 LACS IMPOSED UNDER SECTION 271B OF THE ACT. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 17/08/2016 SD/- SD/- (AMARJIT SINGH) (G.S. PANNU) JUDICIAL MEMBER ACCOCUNTANT MEMBER MUMBAI, DATED 17/08/2016 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI