9911796707
TMI Blog2019 (11) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... NISH BORAD, A.M: This appeal at the instance of Assessee pertaining to A.Y. 2011-12 is directed against the order of Commissioner 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 appeal: That on the facts and circumstances of the case, the Ld. CIT(A) erred in confirming penalty u/s 271B of the Act at ₹ 35,830/-. Levied by the Ld. ITO-1(2) Ujjain. 3. Briefly stated facts as culled out from the records are that the assessee is an individual running sole proprietorship concern in the name of M/s Shitla Textiles engaged in the business cloth trading. Assessee s 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 15.05.2015 declaring income of ₹ 1,79,130/-. Notice u/s 143(2) of the Act duly served upon the assessee. The assessee was asked to explain the source of cash deposit of ₹ 49,48,9900/- in the same bank account hold with IDBI bank. The assessee submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the specified date but also obtain before that date the report of such audit in the prescribed form duly signed and verified by such accountant. Therefore, the AO is justified in imposing the penalty. Therefore, the penalty imposed by the AO amounting to ₹ 35,830/- is confirmed. Therefore, the appeal on these grounds is dismissed. 7. Now the assessee is in appeal before the Tribunal. 8. At the outset, Ld. counsel for the assessee submitted that the actual turnover of the assessee was ₹ 21,66,291/- which was not liable for tax audit u/s 44AB of the Act. Ld. AO has wrongly considered unaccounted turnover at ₹ 49,48,900/- for the purpose of section 44AB of the Act. The assessee was engaged in the commission basis work and has already offered the income of commission of ₹ 50,000/- being 1% of the alleged deposits of ₹ 49,48,9000/- to tax. Reliance was placed on following 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 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds 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 follows: We have considered the rival submissions as well as relevant material on record. There is no dispute that the assessee has declared the turnover of ₹ 24,80,995/- and the income was declared U/s 44AD of the Act in the return of income. The turnover 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 ₹ 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 said addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipts, he shall be required to maintain books of accounts and also get them audited and furnish a report as required 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 turnover or gross receipts, he will be required to maintain books of accounts and get them audited. Corresponding provisions are provided 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 reported turnover of ₹ 48,98,269. In such a situation, having not disturbed the said position under section 44AD, it cannot be said that the assessee has failed to get his books of accounted where undisclosed business receipts of ₹ 43,34,064/- are brought to tax during the course of assessment proceedings and whereby the prescribed turnover threshold has been breached. Had the Revenue rejected the assessee's claim under section 44AD of the Act and ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the AO to hold that the sales of the assessee as referred in s. 44AB of the Act have exceeded to ₹ 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 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 business cannot be substituted by the material gathered by the Assessing Officer in the course of some survey in the case of third party though the said material may be relevant evidence for making the addition to the income of the assessee. Hence, in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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