9911796707
|
Home
Issues involved: Appeal against order of CIT(A) confirming penalty u/s 271B, Applicability of section 44AB for audit, Nature of assessee's trading in shares.
Issue 1: Penalty u/s 271B The assessee appealed against the order confirming penalty u/s 271B of the Income Tax Act, 1961 at Rs. 1,00,000, contending that the penalty was imposed without basis as the assessee, being a dealer/trader in shares, was not required to maintain books of account. The counsel for the assessee argued that since no books of account were maintained, penalty u/s 271B could not be imposed, suggesting that penalty u/s 271A for violation of section 44AA could be applicable instead. Issue 2: Applicability of section 44AB The assessee claimed that as an investor and trader in shares, involved in day-to-day trading and the F & O segment without taking delivery of shares, the accounts were not liable for audit under section 44AB of the Income-tax Act, 1961. However, the authorities found that the assessee failed to establish before them that he was not a dealer in shares and had not taken delivery of shares, leading to the decision that the matter required further investigation by the Assessing Officer (AO) to determine the applicability of section 44AB. Issue 3: Nature of assessee's trading in shares The assessee's counsel presented documentary evidence to support the claim that the assessee was engaged in day trading of shares without maintaining books of account. Despite the arguments made, the authorities found that the assessee had not proven that he was solely an investor and not a dealer in shares, necessitating a more thorough examination by the AO to ascertain the nature of the assessee's trading activities. In conclusion, the Appellate Tribunal allowed the appeal for statistical purposes, setting aside the matter to the file of the AO for a fresh decision after affording the assessee a reasonable opportunity to establish the nature of trading activities and the applicability of audit requirements under section 44AB.
|
