Vinay Agrawal, Ujjain V. ITO-1 (2), Ujjain

ITA 933/Ind/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7147 (ITAT-INDORE)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 14-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S AMBEDKAR
• Keywords: Presumptive income; Business income; Document seized; Opportunity of cross examination; Third party statement; Documents seized; Set aside
• Section: 44AD; 143(2); 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.933/IND/2018 ASSESSMENT YEAR: 2011-12 VINAY AGRAWAL, SHOP NO.E-5, V.D. CLOTH MARKET, UJJAIN / VS. ITO-1(2) UJJAIN ( APPELLANT ) ( RE VENUE ) PAN: AKSPA0366K APPELLANT BY SHRI SHARAD JAIN, CA RE VENUE BY SHRI R.S. AMBEDKAR, SR. DR DATE OF HEARING: 23.10.2019 DATE OF PRONOUNCEMENT: 31.10.2019 / O R D E R PER MANISH BORAD, A.M: THIS APPEAL AT THE INSTANCE OF ASSESSEE PERTAINING TO A.Y. 2011-12 IS DIRECTED AGAINST THE ORDER OF COMMISSION ER OF INCOME TAX(APPEALS), UJJAIN, (IN SHORT CIT), DATED 26.09 .2018 WHICH IS ARISING OUT OF THE ORDER U/S 271B OF THE INCOME TAX ACT 1961(HEREINAFTER CALLED AS THE ACT) FRAMED ON 29. 06.2017 BY ITO, UJJAIN. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL: VINAY AGRAWAL ITANO.933/IND/2018 2 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) ERRED IN CONFIRMING PENALTY U/S 271B OF THE ACT AT RS.35,830/-. LEVIED BY THE LD. ITO-1(2) UJJAIN. 3. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECO RDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL RUNNING SOLE PROPRIETORSH IP CONCERN IN THE NAME OF M/S SHITLA TEXTILES ENGAGED IN THE BUSINESS CLOTH TRADING. ASSESSEES CASE WAS RE-OPENED BY ISSUANCE OF NOTICE U/S 148 OF THE ACT DULY SERVED UPON THE ASSESSEE ON 15.04.2015. IN RESPONSE THERETO, THE RETURN OF INCOME WAS FILED ON 15.05.20 15 DECLARING INCOME OF RS.1,79,130/-. NOTICE U/S 143(2) OF THE A CT DULY SERVED UPON THE ASSESSEE. THE ASSESSEE WAS ASKED TO EXPLAI N THE SOURCE OF CASH DEPOSIT OF RS. 49,48,9900/- IN THE SAME BANK A CCOUNT HOLD WITH IDBI BANK. THE ASSESSEE SUBMITTED THAT THE ALL EGED AMOUNT WAS COLLECTED FROM THE FERIWALAS AGAINST CLOTH SU PPLIED TO THEM AND COMMISSION @ 1% WAS EARNED ON PURCHASED CLOTHES . INCOME FROM COMMISSION HAS BEEN DULY OFFERED TO TAX. THE T OTAL TURNOVER OF THE ASSESSEE INCLUDING THE COMMISSION INCOME WAS BE LOW THE LIMIT OF TAX AUDIT PROVIDED U/S 44AB OF THE ACT. 4. LD. ASSESSING OFFICER, HOWEVER, BRUSHED ASIDE TH E SUBMISSIONS OF THE ASSESSEE AND COMPUTED NET PROFIT OF THE WHOLESA LE BUSINESS @9.1% ON THE UNDISCLOSED TURNOVER OF RS.49,48,900/- AND MADE ADDITION OF RS.4,50,350/-. 5. LD. AO ALSO INITIATED THE PENALTY PROCEEDINGS U/ S 271B OF THE ACT FOR NOT GETTING ACCOUNT U/S 44AB OF THE ACT SINCE T HE DECLARED VINAY AGRAWAL ITANO.933/IND/2018 3 TURNOVER OF THE ASSESSEE WAS INCREASED BY THE ALLEG ED TURNOVER OF CASH DEPOSIT IN THE BANK ACCOUNT. THE INSTANT APPEA L RELATES TO THE LEVY OF PENALTY OF RS.35,830/- LEVIED U/S 271B OF T HE ACT FOR NOT GETTING THE ACCOUNTS AUDITED U/S 44AB OF THE ACT. 6. AGAINST THIS LEVY OF PENALTY ASSESSEE COULD NOT SUCCEED IN THE APPEAL BEFORE THE LD. CIT(A) WHO CONFIRMED THE ADDI TION OBSERVING AS FOLLOWS: GROUND NOS.1,2,3 & 4:- THROUGH THESE GROUNDS OF AP PEAL THE APPELLANT HAS CHALLENGED THE IMPOSITION OF PENALTY AMOUNTING TO RS.35,830/- U/S 271B OF THE I.T. ACT. AS PER THE PR OVISIONS OF SECTION 44AB, EVERY PERSON CARRYING ON BUSINESS SHA LL, IF HIS TOTAL SALES, TURNOVER OR GROSS RECEIPTS, AS THE CAS E MAY BE, IN BUSINESS EXCEED OR EXCEEDS FORTY LAKHS RUPEES, GET HIS ACCOUNTS AUDITED BY AN ACCOUNTANT BEFORE THE SPECIFIED DATE AND FURNISHING BY THAT DATE THE REPORT OF SUCH AUDIT IN THE PRESCRIBED FORM DULY SIGNED AND VERIFIED BY SUCH ACCOUNTANT AN D SETTING FORTH SUCH PARTICULARS AS MAY BE PRESCRIBED. AS GRO SS RECEIPTS OF THE ASSESSEE EXCEEDS THE PRESCRIBED LIMIT GIVEN IN SECTION 44AB OF THE INCOME TAX ACT AND THE ASSESSEE FAILED TO CO MPLY WITH THE PROVISIONS OF SECTION 44AB READ WITH 271B, PENA LTY U/S 271B IS LEVIABLE IN THE CASE. THE CONTENTION OF THE APPELLANT THAT WHEN THE APPEL LANT IS NOT MAINTAINING BOOKS OF ACCOUNT PENALTY U/S 271B CANNO T BE LEVIED IS NOT ACCEPTABLE BECAUSE BOTH THE SECTIONS I.E. 44AB AND 44AA ARE TOGETHER DISTINCT AND SEPARATE. THERE IS N O PROVISIONS THAT THE LEVY OF ONE PENALTY SHALL EXCLUDE THE LEVY OF THE OTHER. THE PAIN READING OF SECTION 44AB MAKES IT VERY CLEA R THAT ITS PROVISIONS ARE MANDATORY. THE APPELLANT NOT ONLY TO GET HIS ACCOUNTS AUDITED BY AN ACCOUNTANT BEFORE THE SPECIF IED DATE BUT ALSO OBTAIN BEFORE THAT DATE THE REPORT OF SUCH AUD IT IN THE PRESCRIBED FORM DULY SIGNED AND VERIFIED BY SUCH AC COUNTANT. THEREFORE, THE AO IS JUSTIFIED IN IMPOSING THE PENA LTY. THEREFORE, THE PENALTY IMPOSED BY THE AO AMOUNTING TO RS.35,83 0/- IS VINAY AGRAWAL ITANO.933/IND/2018 4 CONFIRMED. THEREFORE, THE APPEAL ON THESE GROUNDS I S DISMISSED. 7. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L. 8. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE ACTUAL TURNOVER OF THE ASSESSEE WAS RS.21,66,291/- WHICH WAS NOT LIABLE FOR TAX AUDIT U/S 44AB OF THE ACT. LD. AO HA S WRONGLY CONSIDERED UNACCOUNTED TURNOVER AT RS.49,48,900/- F OR THE PURPOSE OF SECTION 44AB OF THE ACT. THE ASSESSEE WA S ENGAGED IN THE COMMISSION BASIS WORK AND HAS ALREADY OFFERED T HE INCOME OF COMMISSION OF RS.50,000/- BEING 1% OF THE ALLEGED D EPOSITS OF RS.49,48,9000/- TO TAX. RELIANCE WAS PLACED ON FOLL OWING DECISIONS: 1. BRIJ LAL GOYAL VS. ACIT (I.T.A.T., DEL) 88 ITD 413 (2004) 2. SHRI SATYA PRAKASH MUNDRA VS. ITO KISHANGARH ITA NO . 754/JP/2016 (I.T.A.T. JAIPUR) 3. SHRI NIRMAL KUMAR JOSHI VS. ITO KISHANGARH ITA NO.73/JP/2018 (I.T.A.T. JAIPUR) 4. SURAJMAL PARSURAM TODI VS. CIT ITR NO.27 OF 1993(GA UHATI HIGH COURT) 5. ACIT VS. ASHOK KUMAR MOHALLAL KOTHARI AND OTHERS IN ITANO.166 AND 167/NAG/1997(I.T.A.T. NAGPUR) 9. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. VINAY AGRAWAL ITANO.933/IND/2018 5 10. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD PLACED BEFORE US. THE SOLE GRIEVANCE OF THE ASSESSEE RELAT ES TO LEVY OF PENALTY U/S 271B OF THE ACT AT RS.35,830/-. THE UND ISPUTED FACTS REMAINS THAT IN THE RETURN OF INCOME, ASSESSEE HAS DISCLOSED TURNOVER OF RS.21,66,292/-. THE ASSESSEE ALSO DISCL OSED COMMISSION INCOME @1% OF THE TURNOVER OF RS.49,48,9 00/- BEING A TRANSACTIONS OF CASH DEPOSITED AND WITHDRAWAL RELAT ING TO PURCHASE OF CLOTHES FOR HAWKARS/FERIWALAS. THE ASSESSEE CLAI M WAS DENIED BY THE LD. AO AND THE ALLEGED AMOUNT OF RS.49,48,900/- WAS TREATED AS UNEXPLAINED TURNOVER. 11. IN THESE GIVEN FACTS WHERE THE ASSESSEE WAS IN A BONA FIDE BELIEF OF TREATING THE COMMISSION INCOME AS TURNOVER ALONG WITH OTHER TURNOVER ACCOUNTED IN THE BOOKS OF ACCOUNTS DURING THE YEAR WHICH WAS BELOW OF LIMIT U/S 44AB OF THE ACT, BUT LD. AO TREATED UNACCOUNTED TURNOVER AS PART OF TOTAL TURNOVER AND HOLDING THE ASSESSEE LIABLE FOR PAYING PENALTY U/S 271B OF THE ACT FOR NOT GETTING BOOKS OF ACCOUNT AUDITED, WE FIND THAT THE ISSUE STANDS SPUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE D ECISION OF THE COORDINATE BENCH, JAIPUR IN THE CASE OF SHRI SATYA PRAKASH MUNDRA VS. ITO VIDE ITANO.754/JP/2016 DATED 23.01.2019. FOR SAKE OF CONVENIENCE THE GROUNDS RAISED IN THE CASE OF SHRI SATYA PRAKASH MUNDRA( SUPRA) ARE MENTIONED BELOW: '1. ON THE FACTS AND CIRCUMSTANCE OF THE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY OF RS.31,607/- LEVI ED BY LD. AO U/S 271 B OF THE INCOME TAX ACT , WHEN THE TURNOVER DECLARED BY ASSESSEE WAS MERELY RS.24,80,995/-, I.E. BELOW THE LIMIT PRESCRIBED U/S 44AB OF THE ACT. APPELLANT PRAYS THE PENALTY SO LEVIED MAY PLEASE BE DELETED. VINAY AGRAWAL ITANO.933/IND/2018 6 1.1 THAT, THE LD. CIT(A) HAS FURTHER ERRED IN CONFI RMING THE ACTION OF LD. AO OF INCLUDING A SUM OF RS.38,40,500/-, ALLEGING T HE SAME AS UNDISCLOSED TURNOVER, TO DETERMINE THE LIMIT PRESCR IBED U/S 44AB BY IGNORING THE FACT THAT THE SAID AMOUNT WAS NOT RECORDED IN REGULAR BOOKS OF ACCOUNTS THUS COULD NO T BE CONSIDERED FOR LEVY OF PENALTY U/S 44 AB OF THE INC OME TAX ACT, 1961. 2. THAT THE APPELLANT CRAVES THE RIGHT TO ADD, DELE TE, AMEND OR ABANDON ANY OF THE GROUNDS OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF APPEAL.' 12. THE ABOVE GROUNDS WERE ADJUDICATED BY THE I.T.A .T., JAIPUR BENCH IN FAVOUR OF THE ASSESSEE OBSERVING AS FOLLOW S: WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE AS SESSEE HAS DECLARED THE TURNOVER OF RS. 24,80,995/- AND THE IN COME WAS DECLARED U/S 44AD OF THE ACT IN THE RETURN OF INCOM E. THE TURNOVER DECLARED BY THE ASSESSEE IN THE BOOKS OF A CCOUNT AND RETURN OF INCOME DOES NOT EXCEED THE LIMIT PROVIDED U/S 44AB OF THE ACT AND THEREFORE, THERE WAS NO MANDATORY REQUI REMENT OF BOOKS OF ACCOUNT TO BE AUDITED U/S 44AB OF THE ACT. THE ASSESSING OFFICER DURING THE SURVEY U/S 133 A OF THE ACT CONDUCTED IN THE CASE OF ONE SHRI P.C. VIJAYVARGIY A AND OTHERS ON 06/11/2011 FOUND THAT SHRI P.C. VIJAYVARG IYA WAS HAVING BANK DEPOSITS WHICH ACCORDING TO HIM WAS SAL E CONSIDERATION OF MARBLE TRADERS OF KISHANGARH. THE A.O.PROPOSED TO MAKE THE ADDITION OF 10% OF THE UNA CCOUNTED SALE OF RS. 38,40,000/- FOUND TO BE BELONGING TO TH E ASSESSEE. THE ASSESSEE AGREED TO THE ADDITION OF 10% OF THE S AID UNACCOUNTED SALE IN THE ASSESSMENT PROCEEDINGS. BAS ED ON THE SAID ADDITION, THE ASSESSING OFFICER WAS OF THE VIE W THAT THE ASSESSEE'S TURNOVER HAS EXCEEDED THE LIMIT OF RS. 6 0.00 LACS AS PROVIDED U/S 44AB OF THE ACT AND CONSEQUENTLY THE A SSESSEE HAS VIOLATED THE MANDATORY CONDITION OF HIS BOOKS O F ACCOUNT TO BE AUDITED. THE PENALTY U/S 271B OF THE ACT HAS BEE N LEVIED BY THE ASSESSING OFFICER DUE TO THE REASON THAT THERE WAS AN VINAY AGRAWAL ITANO.933/IND/2018 7 ADDITION ON ACCOUNT OF UNACCOUNTED SALE. THUS, IT I S CLEAR THAT AT THE TIME OF PREPARING THE BOOKS OF ACCOUNT, THE TUR NOVER OF THE ASSESSEE WAS ONLY RS. 24,80,995/- AND CONSEQUENTLY IT WAS NOT NECESSARY TO GET THE BOOKS OF ACCOUNT AUDITED A S REQUIRED U/S 44AB OF THE ACT. THE A.O. HAS MADE THE ADDITION BASED ON THE SURVEY CONDUCTED IN THE CASE OF ONE SHRI P.C. V IJAYVARGIYA, HOWEVER, NO CORRESPONDING MATERIAL IN THE POSSESSIO N OF THE ASSESSEE WAS FOUND BY THE ASSESSING OFFICER TO SHOW THAT AT THE TIME OF PREPARING THE BOOKS OF ACCOUNT, THE ASS ESSEE'S TURNOVER WAS EXCEEDING THE LIMIT OF RS. 60.00 LACS AS PROVIDED U/S 44AB OF THE ACT. HENCE, THE REQUIREMENT OF AUDI T OF THE BOOKS OF ACCOUNT AS PER SECTION 44AB OF THE ACT IS ONLY IN THE CASE WHEN THE ASSESSEE ON ITS OWN DECLARED THE TURN OVER OF MORE THAN THE MINIMUM AMOUNT PRESCRIBED U/S 44AB OF THE ACT. THE COORDINATE BENCH OF THIS TRIBUNAL IN THE C ASE OF NIRMAL KUMAR JOSHI & ANR. VS ITO (SUPRA) WHILE CONSIDERING THE IDENTICAL ISSUE HAS HELD IN PARA 9 AND 10 AS UNDER: '9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE AO H AS ACCEPTED THE INCOME OFFERED IN THE RETURN OF INCOME FILED UN DER SECTION 44AD OF THE ACT AND AT THE SAME TIME, HAS BROUGHT TO TA X THE UNDISCLOSED BUSINESS RECEIPTS OF RS.43,34,064/- OFF ERED FOR TAXATION DURING THE COURSE OF ASSESSMENT PROCEEDING S. THE AO HAS THUS COME TO A CONCLUSION THAT SINCE THE COMBIN ED RECEIPTS EXCEED THE PRESCRIBED THRESHOLD OF RS 60 LACS, THE ASSESSEE HAS FAILED TO GET HIS BOOKS OF ACCOUNTS AUDITED. WE FIN D THAT BY ACCEPTING THE INCOME OFFERED UNDER SECTION 44AD(1) , THE AO HAS THUS ACCEPTED THE ASSESSEE'S ELIGIBILITY FOR PRESUM PTIVE BASIS OF TAXATION UNDER SECTION 44AD . ONCE THE SAID ELIGIBILITY IS ACCEPTED, IF WE READ THE PROVISIONS OF SECTION 44AD AND IN PARTICULAR SUB-SECTION (5), IT CLEARLY PROVIDES THA T AN ELIGIBLE ASSESSEE WHO CLAIMS HIS INCOME FROM THE ELIGIBLE BU SINESS IS BELOW THE PRESUMPTIVE RATE OF 8% OF TOTAL TURNOVER OR GROSS RECEIPTS, HE SHALL BE REQUIRED TO MAINTAIN BOOKS OF ACCOUNTS AND ALSO GET THEM AUDITED AND FURNISH A REPORT AS REQUI RED UNDER SECTION 44AB OF THE ACT. THEREFORE, ONLY IN A SCENARIO, WHERE SUCH A CLAIM IS MADE BY THE ASSESSEE WHEREBY HE CLAIMS THAT HIS INCOME TO BE LOWER THAN 8% OF TOTAL TURNOV ER OR GROSS VINAY AGRAWAL ITANO.933/IND/2018 8 RECEIPTS, HE WILL BE REQUIRED TO MAINTAIN BOOKS OF ACCOUNTS AND GET THEM AUDITED. CORRESPONDING PROVISIONS ARE PROV IDED IN SECTION 44AA(2)(IV) OF THE ACT AS WELL. IN THE INSTANT CASE, THE ASSESSEE HAS NOT MADE ANY SUCH CLAIM IN HIS RETURN OF INCOME. FURTHER, THE REVENUE HAS ACCEPTED THE CLAIM OF THE ASSESSEE AS BEING ELIGIBLE FOR SUCH PRESUMPTIVE TAXATION WHERE THE ASSESSEE HAS REPORTED A NET PROFIT OF 8.09% ON TOTAL REPORTE D TURNOVER OF RS 48,98,269. IN SUCH A SITUATION, HAVING NOT DISTU RBED THE SAID POSITION UNDER SECTION 44AD , IT CANNOT BE SAID THAT THE ASSESSEE HAS FAILED TO GET HIS BOOKS OF ACCOUNTED WHERE UNDI SCLOSED BUSINESS RECEIPTS OF RS. 43,34,064/- ARE BROUGHT TO TAX DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND WHEREBY TH E PRESCRIBED TURNOVER THRESHOLD HAS BEEN BREACHED. HA D THE REVENUE REJECTED THE ASSESSEE'S CLAIM UNDER SECTION 44AD OF THE ACT AND THEREAFTER, TAKING INTO CONSIDERATION T HE DECLARED TURNOVER OF RS 48,98,269 AND UNDISCLOSED BUSINESS R ECEIPTS OF RS 43,34,064, HAD COME TO A POSITION THAT THE ASSES SEE HAS FAILED TO GET OFFERED HIS BOOKS OF ACCOUNTED, THAT IN A SUCH A SCENARIO, THE CONTENTION OF THE REVENUE COULD HAVE BEEN ACCEPTED. FURTHER, WHAT HAS BEEN REFERRED IN SECTION 44AB IS THE BOOKS OF ACCOUNTS MAINTAINED IN THE REGULAR COU RSE OF BUSINESS AND WHERE AN ADMISSION IS MADE BY THE ASSE SSEE BASED ON THIRD PARTY STATEMENT DURING THE COURSE OF SURVEY THAT THE AMOUNT FOUND DEPOSITED IN THE BANK ACCOUNT BELO NGS TO THE ASSESSEE, IT CANNOT BE SAID THAT REGULAR BOOKS OF A CCOUNTS ARE MAINTAINED EVEN IN RESPECT OF UNACCOUNTED SALES OR BUSINESS RECEIPTS AND THE PENALTY CAN BE LEVIED UNDER SECTION 271B OF THE ACT. IN THIS REGARD, WE REFER TO THE DECISION OF TH E COORDINATE BENCH IN CASE OF BRIJ LAI GOYAL VS. ACIT (SUPRA) WHEREIN IT HAS BEEN HELD AS UNDER: '11. IT IS EVIDENT FROM THE AFORESAID OBSERVATION T HAT BOOKS OF ACCOUNT MAINTAINED IN REGULAR COURSE ONLY MAKE THE ASSESSEE ELIGIBLE FOR GRANT OF IMMUNITY FROM PENALTY AND NOT WITH REFERENCE TO ANY OF SUCH BOOKS, WHICH HAVE NOT BEEN MAINTAINED IN THE REGULAR COURSE OF BUSINESS. ADMITTEDLY, THE ADDITIONAL SALES FOUND AS A RESULT OF SEARCH, WAS NOT RECORDED IN THE BOOKS OF ACCOUNT REGULARLY KEPT IN THE COURSE OF BUSINESS BY THE APPELLANT. MERELY BECAUSE THE APPELLANT ACCEPTED TH E ADDITIONAL VINAY AGRAWAL ITANO.933/IND/2018 9 SATES FOR THE PURPOSE OF ASSESSMENT OF THE RELEVANT YEAR ON THE BASIS OF ENTRIES IN THE SEIZED DOCUMENTS, THE SAME WOULD NOT CONSTITUTE ACCOUNTS OF THE APPELLANT MAINTAINED IN THE REGULAR COURSE OF BUSINESS AND ON THAT BASIS ALONE LIABILIT Y CANNOT BE FASTENED ON THE ASSESSEE BY HOLDING HIM TO HAVE COM MITTED THE DEFAULT. FURTHERMORE, THE WORD 'ACCOUNTS' HAS NOT B EEN DEFINED UNDER THE IT ACT HOWEVER, UNDER S. 34 OF THE INDIAN EVIDENCE ACT, 1872, SANCTITY IS ATTACHED TO THE BOOKS OF ACC OUNTS, IF THE BOOKS ARE INDEED 'ACCOUNT BOOKS', I.E., IN ORIGINAL IF THEY SHOW ON THEIR FACE, THAT THEY ARE KEPT IN THE 'REGULAR C OURSE OF BUSINESS'. SO, THE ACCOUNTS UNDER S. 34 OF INDIAN EVIDENCE ACT MEANS ACCOUNTS WHICH ARE MAINTAINED IN THE REGULAR COURSE OF BUSINESS. ACCORDINGLY WE ARE SATISFIED THAT THE REC ORD CARRYING ENTRIES FROM WHICH THE APPELLANT ADMITS OF ADDITION AL SALES ARE NOT THE ACCOUNTS AS REFERRED TO UNDER S. 44AB OF THE ACT. ON THAT BASIS IT WAS NOT OPEN TO THE AO TO HOLD THAT THE SA LES OF THE ASSESSEE AS REFERRED IN S. 44AB OF THE ACT HAVE EXCEEDED TO RS. 40 LAKHS AND BY NOT GETTING SUCH ACCOUNTS AUDITED F ROM AN ACCOUNTANT, THE APPELLANT HAS COMMITTED A DEFAULT. SUCH A FINDING ARRIVED AT BY THE AO IS REVERSED.' 10. IN LIGHT OF ABOVE DISCUSSIONS AND IN THE ENTIRE TY OF FACTS AND CIRCUMSTANCES OF THE CASE, THE PENALTY LEVIED UNDER SECTION 271B IS HEREBY DELETED. IN THE RESULT, THE APPEAL OF TH E ASSESSEE IS ALLOWED.' THE ADDITION MADE BY THE ASSESSING OFF ICER DURING THE ASSESSMENT PROCEEDINGS ON THE BASIS OF UNACCOUN TED SALE CANNOT BE REGARDED AS THE TURNOVER FOR THE PURPOSE OF SECTION 44AB OF THE ACT BECAUSE THE DOCUMENTS RELIED UPON BY TH E A.O. ARE NEITHER THE PART OF BOOKS OF ACCOUNT NOR WOULD SUBSTITUTE THE BOOKS OF ACCOUNT OR CONSTITUTE THE BOOKS OF ACCOUNT OF THE ASSESSEE REGULARLY MAINTAINED. THEREFORE, THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE IN REGULAR COURSE OF BUS INESS CANNOT BE SUBSTITUTED BY THE MATERIAL GATHERED BY T HE ASSESSING OFFICER IN THE COURSE OF SOME SURVEY IN T HE CASE OF THIRD PARTY THOUGH THE SAID MATERIAL MAY BE RELEVAN T EVIDENCE FOR MAKING THE ADDITION TO THE INCOME OF THE ASSESS EE. HENCE, IN VIEW OF THE FACTS AND CIRCUMSTANCES AND FOLLOWING T HE EARLIER DECISION OF THIS TRIBUNAL, THE PENALTY LEVIED U/S 2 71B OF THE ACT IS DELETED. VINAY AGRAWAL ITANO.933/IND/2018 10 13. AFTER GOING THROUGH THE ABOVE DECISION OF THE C OORDINATE BENCH, WE ARE OF THE CONSIDERED VIEW THAT THE ISSUE RAISED BEFORE US IS SQUARELY COVERED BY THE DECISION OF COORDINATE BENC H AND THE IMPUGNED PENALTY OF RS.35,830/- LEVIED U/S 271B OF THE ACT IS THUS LIABLE TO BE DELETED. FINDING OF THE LD. CIT(A) IS THUS SET ASIDE AND APPEAL OF THE ASSESSEE IS ALLOWED. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE STAND S ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 31 .1 0.2019. SD/- (KUL BHARAT) SD/- (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE; DATED : 31 /10/2019 CTX? P.S/. . . COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR