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TMI Blog2019 (2) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... 07/- levied by Ld. AO u/s 271B 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. 1.1 That, the Ld. CIT(A) has further erred in confirming the action of Ld. AO of including a sum of Rs. 38,40,500/-, alleging the same as undisclosed turnover, to determine the limit prescribed u/s 44AB by ignoring the fact that the said amount was not recorded in regular books of accounts thus could not be considered for levy of penalty u/s 44 AB of the Income Tax Act, 1961. 2. That the appellant craves the right to add, delete, amend or abandon any of the grounds of appeal either before or at the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .C. Vijayvargiya and therefore, the assessee's turnover as recorded and disclosed in the books of account was not exceeding the limits of Rs. 60.00 lacs as provided U/s 44AB of the Act. He has further submitted that the turnover has not been defined in the Act and hence the same has to be considered in commercial sense and in normal accounting principle. The turnover for the purpose of Section 44AB of the Act shall be the gross receipts or sale value of the transaction carried on by the assessee and recorded in the books. The Assessing Officer made the addition on the basis of the statement of third person and not on the basis of any unaccounted turnover found on the material or books of account of the assessee. The addition was made merel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r declared by the assessee in the books of account and return of income does not exceed the limit provided U/s 44AB of the Act and therefore, there was no mandatory requirement of books of account to be audited U/s 44AB of the Act. The Assessing Officer during the survey U/s 133A of the Act conducted in the case of one Shri P.C. Vijayvargiya and others on 06/11/2011 found that Shri P.C. Vijayvargiya was having bank deposits which according to him was sale consideration of marble traders of Kishangarh. The A.O.proposed to make the addition of 10% of the unaccounted sale of Rs. 38,40,000/- found to be belonging to the assessee. The assessee agreed to the addition of 10% of the said unaccounted sale in the assessment proceedings. Based on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO has accepted the income offered in the return of income filed under section 44AD of the Act and at the same time, has brought to tax the undisclosed business receipts of Rs. 43,34,064/- offered for taxation during the course of assessment proceedings. The AO has thus come to a conclusion that since the combined receipts exceed the prescribed threshold of Rs. 60 lacs, the assessee has failed to get his books of accounts audited. We find that by accepting the income offered under section 44AD(1), the AO has thus accepted the assessee's eligibility for presumptive 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 provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 course of business and where an admission is made by the assessee based on third party statement during the course of survey that the amount found deposited in the bank account belongs to the assessee, it cannot be said that regular books of accounts 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 the Coordinate Bench in case of Brij Lai Goyal vs. ACIT (supra) wherein it has been held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to hold that the sales of the assessee as referred in s. 44AB of the Act have exceeded to Rs. 40 lakhs and by not getting such accounts audited from 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 entirety of facts and circumstances of the case, the penalty levied under section 271B is hereby deleted. In the result, the appeal of the assessee is allowed." The addition made by the Assessing Officer during the assessment proceedings on the basis of unaccounted sale cannot be regarded as the turnover for the purpose of Section 44AB of the act because the documents relied upon by the A.O. are neither the part of books of account nor would sub ..... X X X X Extracts X X X X X X X X Extracts X X X X
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