9911796707
TMI Blog2020 (9) TMI 571X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly, the penalty levied under section 271A is deleted. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment proceedings as well as penalty proceedings to show that the turnover of the assessee is only ₹ 28,20,974/- which was claimed by the assessee. Whereas the AO has noted that the turnover of the assessee is ₹ 47.86 crores. The ld. D/R has submitted that the evidence brought on record by the AO cannot be ignored. He has also relied upon a decision of Hon'ble Delhi High Court in case of Suman Poddar vs. ITO, 112 taxman.com 329 (Del.) and SLP filed by the assessee has been dismissed by the Hon'ble Supreme Court reported in 112 taxmann.com 330 (SC). 4. At the outset, we note that this Tribunal has taken a consistent view that the turnover in respect of derivative transactions has to be computed by taking the total sum of positive and negative outcome of the transactions instead of the total amount of transaction. In case of Santosh Kumar vs. ITO in ITA No. 1093/JP/2019 vide order dated 03.07.2020 this Tribunal has held as under :- " 2. We have heard the ld. AR as well as ld. DR and considered the relevant material on record. The Assessing Officer while passing the scrutiny assessment U/s 143(3) r.w.s. 147 of the Act has given the fining that the assessee is not main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicable in the case of the assessee when the assessee has done the share trading in intraday segment and some of the transactions are delivery based transactions to the extent of ₹ 53,498/-. There is no dispute regarding the turnover in respect of the transactions of the shares which are delivery based. However, the dispute is regarding the turnover in respect of the intraday transactions carried out by the assessee. The AO has taken the total value of the transactions at ₹ 2,43,62,720/- in the intraday non-delivery based trading segment. There is no quarrel that the transactions carried out by the assessee in intraday non-delivery based segment are speculative transactions as per section 43(5) of the Act. This fact is also accepted by the ld. CIT (A) in his finding in para 2.3 as under :- " Ground No. 01 and 02 are being taken up together which are interrelated. I have perused the facts of the case, the penalty order and the submissions of the appellant. It is seen that the Assessing Officer imposed penalty under section 271B for not getting the accounts audited. There is no dispute as to the fact that the turnover of the assessee is more than the limit prescribed u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is an independent transaction. Further, amount paid on account of negative difference paid is not related to the amount received on account of positive difference. In such transactions though the contract notes are issued for full value of the purchased or sold asset the entries in the books of account are made only for the differences. Accordingly, the aggregate of both positive and negative differences is to be considered as the turnover of such transactions for determining the liability to audit vide section 44AB." The turnover has not been defined in the IT Act and particularly in respect of the speculative transactions in shares and securities. Therefore, the Guidance Note of ICAI is a relevant and proper guidance for determining the turnover in respect of such speculative transactions. As it is clear from the Guidance Note issued by the ICAI that the turnover in respect of non-delivery based speculative transactions including stock and shares has to be determined by taking the aggregate of both positive and negative differences arising from such transactions and as an out-come of settlement of such contracts during the year. We find that the assessee has produced the det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken by this Tribunal the turnover of the assessee would not exceed the limit as provided U/s 44AB, the penalty levied U/s 271B is deleted." Accordingly, when the turnover has to be computed only by taking the positive and negative outcome of the transactions and not the entire volume of the transactions, the turnover of the assessee is wrongly considered by the AO while levying the penalty under section 271A of the Act. Even otherwise, when the issue of turnover in case of derivative transactions is a debatable issue, then the assessee cannot be penalized for not maintaining the books of account as the case would definitely fall under the provisions of section 273B of the IT Act which contemplates that no penalty shall be imposable on a person or the assessee for any failure inter alia attracting the provisions of section 271A if he proves that there was a reasonable cause for the said failure. The showing of the turnover by the assessee from a derivative transaction is a bonafide explanation. Accordingly, the penalty levied under section 271A of ₹ 25,000/- is deleted. 5. In the result, appeal of the assessee is allowed. Order is pronounced in the open court on 07/09/2020. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
