2020 (7) TMI 212

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....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 maintaining the books of account and the turnover of the assessee in respect of derivative transactions on MCX is more than Rs. 127 Cr. Thus, the AO after framing the assessment initiated proceeding for levy of penalty U/s 271A as well as 271B of the Act. The assessee challenged the action of the AO before the ld. CIT(A) against the levy of penalty U/s 271A as well as 271B of the Act. The ld. CIT(A) deleted the penalty levied U/s 271A of the Act while passing even dated order but confirmed the penalty levied U/s 271B of the Act. We....

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....oint. We find that this Tribunal in case of Shri Rajjak Ahmed Khan vs. ITO in ITA No. 1181/JP/2019 vide order dated 13.01.2020 has considered an identical issue in para 5 as under:- "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 transactio....

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....king to these facts, penalty under section 271B imposed by the Assessing Officer is confirmed. These grounds of appeal are dismissed." Once these transactions are non-delivery based intraday transactions and classified as speculative transaction as per the provisions of section 43(5) of the IT Act, then the turnover in respect of these transactions has to be determined as per the Guidance Note issued by the Institute of Chartered Accounts of India. For ready reference, we reproduce the relevant part of the Guidance Note in para 5.14 as under :- " Guidance Note on Tax Audit under Section 44AB of the Income-tax Act, 1961. 5.14. The turnover or gross receipts in respect of transactions in shares, securities and derivatives may be determi....

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....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 outcome of settlement of such contracts during the year. We find that the assessee has produced the details of the speculative transactions as well as delivery based transactions and also given the comp....