Bharat Mohanlal Patel, Ahmedabad V. The ITO, Ward-4(1)(2), Ahmedabad

ITA 535/AHD/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 4582 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 28-03-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 271B; 44AB

Judgement Text

आयकर अपील य अ धकरण, अहमदाबाद यायपीठ । IN THE INCOME TAX APPELLATE TRIBUNAL, “SMC” BENCH, AHMEDABAD (Conducted Through Virtual Court) ] ] BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND T.R. SENTHIL KUMAR, JUDICIAL MEMBER ITA No.535/Ahd/2019 Assessment Year :2015-16 Bharat Mohanlal Patel 33, Haridarshan Bungalows Nr.CIMS Hospital Science City Road Sola, Ahmedabad 380 060. PAN : AKSPP 4231 E Vs The ITO, Ward-4(1)(2) Ahmedabad. (Applicant) (Responent) Assessee by : None Revenue by : Shri Alpesh Parmar, Sr.DR स ु नवाई क तार ख/D a t e o f H e a r i n g : 0 4 / 0 4 / 2 0 2 2 घोषणा क तार ख /D a t e o f P r o n o u n c e m e n t : 1 3 / 0 4 / 2 0 2 2 आदेश/O R D E R PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER This appeal is filed by the assessee against the order dated 05-03- 2019 passed by the Ld. Commissioner of Income Tax [Appeals]-4, Ahmedabad confirming the levy of penalty levied under section 271 B of the Income Tax Act, 1961 hereinafter called “the Act”) relating to the assessment year 2015-16. 2. Brief facts of the case is that the assessee is an individual, engaged in the business of trading in Agro commodities. For the assessment year 2015-16 the assessee filed its return of income declaring total income of Rs.3,98,570/- on 07-09-2015. The Assessing Officer on verification of the ITA No.535/Ahd/2019 2 details available on record found the assessee has entered into securities transaction through one M/s. Shah Investors Home Limited in respect of Future & Option segment as well as transactions of purchase and sale of shares. The assessee was requested to furnish details and source of payment made to the broker in respect of F & O loss of Rs.29,22,559/-. The assessee filed a revised statement of income along with a letter dated 31-12-2017, where in Business income of Rs.5,59,285/-; Profit from share Transaction Rs.4,20,708/-; Long Term Capital Gain on sale of property Rs.14,16,910/- and Income from Other sources of Rs. 1,094/- the same were set off against the F & O loss of Rs. 29,22,559/- and showing a net loss of Rs.5,24,562/-. The AO held that the above claims were not made in the original return of income u/s.139 [1] of the Act,hence the same were not allowed by filing only in a revised statement and therefore determined the total income at Rs.22,36,189/- and demanded tax thereon. 3. The AO further held that as the Securities transaction carried out by the assessee during the year is more than the limit prescribed under section 44AB of the Act and the assessee has not got his books audited under 44AB, penalty proceedings under section 271B was initiated by issuing notice duly served on him. The assessee has not responded to the penalty notice, since the business turnover of the assessee for the assessment year 2015-16 was more than the prescribed limit of Rs.60,00,000/= that he was liable to get his accounts audited in view of section 44AB of the Act, however the assessee failed to get his accounts audited, it is a fit case for levy of penalty under section 271 B of the Act, which is 0.5% of the total turnover and levied penalty of Rs.68,519/=. 4. Aggrieved against the penalty order the assessee filed an appeal before Ld. Commissioner of Income Tax [Appeals]- 4, Ahmedabad. The Ld. CIT[A] held that in the Profit and Loss account submitted from M/s. Shah Investors Home Limited indicates that the total purchase of shares amounts to Rs.68,27,343/= and the sale amount is Rs.67,65,703/= which ITA No.535/Ahd/2019 3 is above the prescribed limit of Under 44AB of the Act. The assessee failed to get his books audited under section 44AB against which penalty under section 271B is mandatory, there by the CIT[A] confirmed the levy of penalty of Rs.68,519/=. 5. When the above appeal listed for hearing None appeared for the assessee in spite of service of eleven notices to the assessee. Therefore, with the assistance of Ld DR and available materials on record, we proceed with the appeal. The grounds of appeal raised by the assessee is that the Ld CIT [A] erred in confirming the penalty of Rs. 68,516/- under section 271B in as much as when the assessee has not maintained any books of accounts, the question of levy of penalty under section 271B does not arise. 6. The Ld DR submitted that the grounds raised by the assessee itself is not correct. The assessee is required to maintain Books of Account as its turnover on sale and purchase of shares above 60 lacs during the financial year, that is mandatorily required to maintain books of accounts and get it Audited under section 44AB of the Act. The assessee before the Ld CIT[A] has only pleaded that the huge loss incurred on share transactions which has resulted in selling of his immovable property and therefore the levy of penalty is not warranted. The Ld DR further submitted that it's not the correct preposition of Law. Therefore the ld. CIT(A) has correctly confirmed the levy of penalty under section 271 B of the Act, which does not require any interference. 7. We have gone through the materials available on record and the submissions of the ldDR, the assessee has not made out a case that he his is not liable to maintain the books of account as per section 44AB of the Act. As rightly pointed out by the Ld DR and confirmed by the Ld CIT[A] the turnover of the sale of shares and purchase of shares were above Rs. 60 lacs which were required to maintain Books of Account and get it audited under section 44AB of the Act. Failure to do the same will attract the levy of penalty under section 271B of the Act. In the absence ITA No.535/Ahd/2019 4 of any material on record from the assessee, therefore we have no hesitation in confirming the levy of penalty levied under section 271B. Thus the ground of appeal raised by the assessee is hereby rejected and the appeal is dismissed. 8. In the result, appeal of the assessee is dismissed. Order pronounced in the Court on 13 th April, 2022 at Ahmedabad. Sd/- Sd/- (ANNAPURNA GUPTA) ACCOUNTANT MEMBER (T.R. SENTHIL KUMAR) JUDICIAL MEMBER Ahmedabad, dated 13/04/2022