9911796707
TMI Blog2023 (3) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... ground of appeal raised by the assessee is that the ld. CIT(A) has erred in confirming the penalty of Rs.1,50,000/-, levied u/s.271B of the Act without considering the guidelines of ICAI in the working of turnover in future and option. 3. Brief facts are that the assessee is engaged in the business of trading, financing, reality and commodity etc. The assessee filed his return of income dated 04.04.2016, declaring total income of Rs.72,46,410/- for the impugned year. The assessee's case was selected for scrutiny and assessment order dated 24.11.2017 was passed u/s.143(3) determining total income at Rs.72,46,410/-. 4. The A.O. observed that the assessee has shown short term capital loss of Rs.3,74,357/- from trading in future and option, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for tax audit and that the levy of penalty u/s.271B was erroneous in the present case. The ld. AR relied on the decision of the Hon'ble Apex Court in the case of CIT vs. Punjab Stainless Industries [2014] 364 ITR 144 (SC) and in case of CIT vs. Pact Securities and Financials Ltd. [2003] 86 ITD 115 (Hyd.), which held that the method of accounting, prescribed by ICAI can be relied upon for computing turnover in case of shares and derivates. The ld. AR also relied upon the decision of co-ordinate bench in case of Sachin Maratrao Rangari vs. ACIT [2022] 143 taxmann.com 318 (Rajkot - Trib). 9. The ld. Departmental Representative (ld. DR for short) controverted the same and stated that the assessee's turnover transaction in future and option ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company during the financial year. This interpretation does not hold good in case of F & O transactions where there are neither physical goods involved nor any delivery of shares or securities involved in the said transaction. The entries in the books of accounts of such transactions are not made on the contracted notes issued, but are made only of the differences. For the said purpose, the Institute of Chartered Accountant of India has prescribed the method of computing the turnover in such cases through 'Guidance Note on Tax Audit'. The following is the relevant extract for the said purpose: Keeping in view the distinct features of an F and O transaction, the ICAI has prescribed that the turnover in such transactions should be computed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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