TaxTMI 
TaxTMI 
2013 (1) TMI 234
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....olitary issue relates to penalty of Rs. 93,332/- imposed by the Assessing Officer u/s 271B of the Act on failure of the assessee to get his accounts audited by a Chartered Accountant in terms of section 44AB of the Act within the specified date. 3. In brief, the facts are that the assessee is an HUF which is engaged in online trading in commodities. During the year under consideration, the total sauda in the commodities booked with commodity exchange was shown at Rs. 1,86,66,488/- on which gross profit of Rs. 16,44,343/- was declared. As per the Assessing Officer, since the turnover in commodities by way of Sauda booking exceeded Rs. 40.00 lakhs, assessee was liable to get its accounts audited in terms of section 44AB of the Act and furn....
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....ation activity, the total amount of sauda booked with the commodity exchange would not constitute turnover for the purpose of section 44AB of the Act. The learned counsel submitted that in terms of the said bonafide impression, the net income accruing to the assessee in the speculative trading in commodities was below Rs. 40.00 lakhs and therefore, the assessee did not get his accounts audited. In support of the aforesaid proposition, reliance was placed on the decision of Bombay Bench of the Tribunal in the case of Growmore Exports Ltd. v. Asstt. CIT [2001] 78 ITD 95 (Mum). Apart therefrom, it is also pointed out that when the assessee was confronted with the situation by the Assessing Officer during the assessment proceedings, the assesse....
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....he speculation transaction of sale and purchase of units without taking delivery and the account was settled by crediting the difference. The Tribunal after considering section 18 of the Sale of Goods Act 1930 observed that no property in the said units passed on to the assessee inasmuch as the assessee never acquired the property in the units as the units contracted to be bought were future unascertained goods. Similarly, it could not pass on the property to the party to whom the units were contracted and therefore, there was no 'sale' or 'turnover' effected by the assessee in the legal sense for the purposes of getting the accounts audited u/s 44AB of the Act. The relevant observations of the Tribunal in this regard are as under: "1....
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....ted to be sold by the assessee. In the ultimate result, therefore, there was no sale by the assessee and when there was no sale, there was no question of receiving any sale proceeds by the assessee, which in commercial sense would be described as either sales or turnover. Thus, even in legal sense there was no turnover effected by the assessee. 11. The Mumbai Bench of the Tribunal, in the case of Babulal Enterprises [IT Appeal No. 6031 (Mum.) of 1996 dated 12-2-1997] has on similar facts held that the amount of transactions as noted in the contract notes cannot be taken as turnover of the assessee. The Tribunal also relied on the decision of the Tribunal in the case of Royal Cushion Vinyl Products Ltd. (supra) and observed that though th....