TaxTMI 
TaxTMI 
TaxTMI 
2020 (3) TMI 171
X X X X Extracts X X X X
X X X X Extracts X X X X
....DR and considering the material available on record. 3. Briefly the facts of the case are that as per information available with the tax department, it was found that the assessee was engaged in executing transactions on national/multi commodity exchange and these transactions were not verifiable from the return filed by the assessee. Accordingly, notice U/s 148 of the Act was issued however, there has not been compliance to the said notice nor the assessee has filed any return in response to the notice U/s 148 of the Act. Further, notice U/s 142(1) dated 13.10.2017 was also issued to the assessee for furnishing the details/information however, there has not been any compliance on the part of the assessee. Accordingly, the assessment proceedings were completed U/s 147 r.w.s. 143(3) of the Act vide order dated 19.12.2017 wherein income of Rs. 2,03,603/- was brought to tax. Separately, penalty proceeding U/s 271A for non- maintenance of books of accounts, U/s 271B of the Act for not getting the books of account audited and U/s 271(1)(b) for non compliance to the notice U/s 142(1) dated 13.10.2017 were initiated by the Assessing officer. 4. In the penalty order passed U/s 271A date....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Act. For the purposes, we refer to the assessment order dated 19.12.2017 passed u/s 147/143(3) of the Income Tax Act which reads as under: "....During the year under consideration assessee has shown income from other sources of Rs. 1,33,603/- and loss from speculation business of Rs. 3,59,770/-. As per ITS details share transaction of Rs. 9,90,18,425/- is shown. Further as per information received from broker Nirmal Bang Commodity Pvt. Ltd. assessee has made purchase of Rs. 27,30,46,865.5/- and sales of Rs. 27,26,87,233/- during F.Y. 2009-10 in share transaction (option closing) upon which loss of Rs. 3,59,632/- shown. As per details of share transaction report turnover of the business exceeding the limit prescribed under the act for penalty proceeding u/s 271A and 271B of the I.T. Act, and as per bank account assessee has made total cash deposit of Rs. 1,94,093/-.During the assessment proceeding assessee was asked to furnish source of cash deposit in the bank account and explain why proceedings u/s 271A and 271B should not be initiated as turnover of the business exceeding the limit prescribed under the relevant provision of the Act. In response thereto the assessee has furn....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by taking the aggregate of both positive and negative differences arising from such speculative transactions and as an outcome of settlement of such contracts during the year which in the instant case comes to Rs. 3,59,632/-. Similar view has been taken recently by this Bench in case of Shri Rajjak Ahmed Khan vs. ITO (ITA no. 11181/JP/2019 dated 13.01.2020) wherein the relevant findings read as under:- "5. We have considered the rival submissions as well as the relevant material on record. The limited dispute in the case in hand is whether the provisions of section 44AB are applicable 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 Rs. 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 Rs. 2,43,62,720/- in the intraday non-delivery based trading segment. There is no quarrel that the transactions carried out by the ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... or purchase which is entered into is not completed by giving or receiving delivery so as to result in the sale as per value of contract note. The contract is settled otherwise and squared up by paying out the difference which may be positive or negative. As such, in such transaction the difference amount is 'turnover'. In the case of an assessee undertaking speculative transactions there can be both positive and negative differences arising by settlement of various such contracts during the year. Each transaction resulting into whether a positive or negative difference 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 speculativ....