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TMI Blog2016 (3) TMI 1010X X X X Extracts X X X X X X X X Extracts X X X X ..... nsactions cannot be held as turnover as the assessee is eligible only to income or loss and delivery of the commodities is not exchanged. Thus find force in the contentions of the ld. AR of the assessee that ITAT Mumbai Bench in the case of Anahaita Nalin Shah Vs. DCIT [2014 (1) TMI 1582 - ITAT MUMBAI] has not considered these two published decisions in the cases of ITAT Pune Bench in the case Banwari Sitaram Pasari HUF vs. ACIT and Growmor Exports Ltd. vs. Asstt.Commissioner (supra). The contention of the ld. AR of the assessee is that when there are two views on same issue, the issue favorable to the assessee should be considered for which the ld. AR of the assessee relied on the decisions of CIT vs. Vegetable Products Ltd. [1973 (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... returns of income were filed without annexing audit reports. The assessment was completed by accepting speculative income declared in respective returns. The AO however was of the view that accounts should have been audited u/s 44AB and initiated penalty proceedings u/s 271B of the Act where the assessee filed detailed submissions replying as under:- (i) The transactions of commodities through NCDEX do not involve any delivery. Therefore, the entire notional value cannot be treated as a part of turnover. (ii) The word turnover is not defined in the I.T. Act and the definition thereof is given in Schedule VI, Part II, item 31)(a) of Companies Act and it is as under:- The turnover, that is, the aggregate amount for which sales ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansactions in questions are not under the provisions of Section 44AB of the Act (iv) The assessee was under bona fide belief that assessee having received only speculative profit or incurred speculative loss, it was not liable for audited the account as the turnover did not exceed ₹ 40 lacs in all these assessment years. The bona fide belief is based on legitimate considerations. (v) Reliance was placed of ITAT Pune Bench dated 22-11-2012 in the assessee of Banwari Sitaram Pasari HUF vs. ACIT (ITA No. 1489(Pune) of 2011 for the assessment year 2006-07) wherein the order of ITAT Mumbai Bench in the case of Growmor Exports Ltd. vs. Asstt. Commissioner (2001) 78 ITD 95 was followed by ITAT Pune Bench deleting the penalty u/s 271B, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nover indicate the aggregate price of the commodities received by an assessee's during the course of his trading or business activities. It does not differentiate between commodities sold under the head speculative business / normal business. Transfer of immovable or movable property by way of investment is not included by the provisions of Section 44AB of the Act. Provisions of the Act are clear that all revenue receipts are covered by the words turnover , wherever capital receipts are not to be considered a part of the turnover for the purpose of the said section. In other words, receipts which are not relatable to business and may fall under the expression income to be subjected to tax as income from sources do not form part of tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erused the materials available on record. The facts as mentioned above are not controverted and only the issue which remains to be decided is whether the assessee's speculative transaction on NCDEX can be considered as actual transaction liable for provision of audit u/s 44AB read with Section 271B or they are mere speculative profit and transaction value and the entire notional transaction value cannot be treated as turnover of the assessee. ITAT Pune Bench in the case Banwari Sitaram Pasari HUF vs. ACIT and Growmor Exports Ltd. vs. Asstt. Commissioner (supra) have held that the notional value of such speculative transactions cannot be held as turnover as the assessee is eligible only to income or loss and delivery of the commodities i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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