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TMI Blog2018 (2) TMI 2092X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is dismissed. Levy of penalty u/s 271B - assessee had not got his account audited u/s. 44AB of the act as the turn-over of the assessee was exceeding Rs. 40 lacs during the previous year - assessee has filed revised return of income disclosing net profit after taking into account the undisclosed cash deposit found in the ICICI bank a/c. - HELD THAT:- We observe that separate penalty has been provided as per the provisions of section 271A for failure to keep, maintain or retain books of account, documents, etc. as required by section 44AA of the act. In view of the above, the assessee has violated the provision of section 44AA by not maintaining books of accounts and the assessing officer has not initiated any penalty as prescribed u/s. 271A of the act. We observe that section 271B is not attracted in a case where no account has been maintained and instead an recourse u/s. 271A can be taken. Therefore, we consider that in the case of the assessee the imposition of penalty u/s. 271B is not justified. Accordingly, the appeal of the assessee is allowed - ITA Nos. 359 & 455/Rjt/2014 - - - Dated:- 15-2-2018 - SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank a/c on the other hand offered net profit @ 67.22% as total receipt from his regular business which comes to Rs. 28,67,612/-. He stated that he has disclosed profit of Rs. 36,04,879/- as revised income which in fact represent his job work income not disclosed in the books of accounts. Consequently, the assessing officer has added net profit of Rs. 36,04,879/- to the total income of the assessee. Apart from the above, the assessing officer has also made addition of Rs. 2,52,121/- as income from unexplained sources being the differential of cash deposit of Rs. 38,57,000/- in the RCC Bank a/c no. 06114 and profit earned from job work income of Rs. 36,04,879/- In respect of share transactions the assessee had not furnished the demat a/c statement however, he has produced the bills for verifications along with copy of his trading a/c. The assessee has turn-over of Rs. 6,98,58,295/- in share trading business during the year under consideration. The assessing officer had not allowed the loss in share trading of Rs. 36,34,642/- by stating that in order to claim any business loss assessee has to file return of income as per the provisions of section 139(1) of the act showing the amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned from job work income was deposited in this account. The A.O. accepted the contention of the appellant. However, the differential amount of Rs.2,52,121/- (Rs.38,57,000) minus Rs.36,04,879) was added to the total income. The appellant had made a claim of loss of Rs.36,34,642/- from share trading activities and had asked for a set off of the same from the income of the appellant. The A.O. denied the set off holding that the appellant had not filed the return within time required to claim business loss. 8.3 During the course of appellate proceedings, the appellant contended that it was doing share trading in the nature of F O. delivery basis and intra day trading. The appellant filed full details of the loss claimed by it of Rs.36,34,642/-. It was contended by the appellant that s.80 of the I. T. Act requires filing of return u/s. 139(3) for carry forward and set off of loss. The appellant is claiming set off of loss from the same year and hence the provisions of s.80 arc not applicable. The loss was detected by the department during assessment proceedings and hence it should be allowed. The details submitted by the appellant were sent to the A.O. for his comments by way of re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... base. Hence, the entire amount of cash deposits of Rs.38,57,000/- in RCC Bank account should be treated as undisclosed income of the appellant. 8.8 As this finding was resulting in enhancement of income of the appellant, a notice u/s.251 was issued to the appellant, vide No.CIT(A)-I/Rjt/251/RHP/2014-15, dt.26/3/2014 asking him to show cause as to why the entire cash deposits in RCC Bank account should not be treated as income from undisclosed sources. The appellant did not attend the hearing on 28/3/2014 nor did he submit any objections to the same. The said notice u/s.251 is reproduced hereunder:- To, Shri Rajesh Patel, 22- Udhyognagar, Mavadi Road, Rajkot. Sub : Notice u/s.251 for enhancement of income for A.Y. 2009-10 Please refer to your submissions filed during appellate proceedings. I have carefully considered the submission and have also gone through the assessment order. There are two bank accounts in your case. The first one was with ICICI Bunk in which there was cash deposit of Rs. 40,04,610/-. This account was not disclosed to the department. The other account with Rajkot Commercial Coop. Bank which was shown deposits of Rs 38,57, 000/-. It has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as loss from business of trading in shares. This loss can be set off against the other income of the appellant as it is no! in the nature of speculative loss. The second question required to be considered is whether the appellant is eligible for the set off when it has not made a claim in the return of income or the return of income was not filed u/s. 139(3). It is seen that the return u/s. 139(3) is required to be filed in order to claim earn forward and set off. If this return is not filed in time, the e/f and set off of loss cannot be allowed as per s.80 of the I. T. Act. However, there is no provision to disallow set off of loss in the same year if the return is not filed. In this case, the undisclosed income of the appellant as well as the undisclosed loss from share transactions has been detected during the course of assessment proceedings, thus, in my opinion, the appellant is entitled for set off of loss from the share transactions against the income computed. The A.O. is directed to allow set off of loss of Rs.36,34,642/- against the income of the appellant which is computed at Rs.76,58,669/-. These grounds of appeal are partly allowed. 9.0 Ground No.4 is regarding char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom deposit and withdrawal of cash made in the ICICI bank a/c. After taking into consideration the above facts and circumstances, the ld. CIT(A) observed that there was no nexus between profit earned through the job work and the cash deposit in RCC bank. Therefore, the ld. CIT(A) has computed the undisclosed income from the RCC bank at Rs. 36,04,879/- and total income of the assessee was computed at Rs. 76,58,669/-. He has also allowed to set off the loss from share transactions to the amount of Rs. 3624642/-. As per provisions of section 70 of the act loss from one source against income from another source under the same can be set off. Further as per provisions of section 80 of the act such loss is allowed to set off even if the return is not filed in time. Therefore, we consider that ld. CIT(A) has correctly allowed set off of loss from share transaction of income in the case of the assessee. In view of the above mentioned facts and circumstances, we observed that the assessee failed to controvert with any relevant evidences that the findings of ld. CIT(A) is not correct. After considering the above facts and circumstances, we do not find any reason to interfere in the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 40 lakhs SHALL get its accounts of the previous year audited and the report filed by the prescribed date. I find no merit in the appellant s contention that he had not maintained any books of accounts and therefore no audit was possible. The appellant was very well aware that his total turnover exceeded Rs.40 lakhs. The same was easily quantified by the A.O. from the details made available by the appellant during the course of assessment proceedings. I have no doubt that if these details were made available to a chartered accountant, he could have easily prepared the required audit report. The appellant has done nothing to ulfill this requirement. It is also seen that the job receipts and share transactions were not disclosed and were detected by the A.O. during the course of assessment proceedings. I do not find any merit in the appellant s contention. The reliance placed by the A.O. on the decision of the Hon ble ITAT C Bench Delhi is misplaced as that decision is in respect of income declared u/s.44AE and thus not applicable to the appellant s case. The A.O. has, in my opinion, correctly levied the penalty u/s.271B for not getting the accounts audited in spite of the turno ..... X X X X Extracts X X X X X X X X Extracts X X X X
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