2014 (11) TMI 1264

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....on, the assessee had been carrying on the business of wall painting/ banners & hoarding and also doing the business of shares. He had filed his return of income declaring taxable income at Rs. 1,21,220/-. The AO noticed that as per AIR information, the assessee had done following transactions: Contractual receipts Rs. 40,58,051/- Payment to CITI Bank Credit card Rs. 2,48,143/- Share transactions with M/s India Bulls Securities Ltd. Rs. 3,62,52,919/- 2.1. The AO observed that these transactions were not declared by the assessee and were submitted only after the receipt of AIR information, supplied to him. From the copy of a/c of M/s India Bulls Securities Ltd., following information was noticed: "1. Assessee has made transaction of ....

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.... He submitted that default at best is of section 271A for not maintaining the books of account in respect of investments made, but not u/s 44AB. 3.1. Ld. counsel referred to the decision of Humble Karnataka High Court in the case of CIT Vs. Dr. K. Satish Shetty 310 ITR 366(Kar.), wherein it was held as under: "Held, that the assessee was under a bona fide belief that he was required to obtain audit report only in respect of that business, the turnover of which crosses the limit of Rs. 40 lakhs for each assessment year. From the conduct, behaviour and attitude of the assessee, it was clear that he was not aware that the aggregate of the three businesses had to be taken into consideration for compliance with the provisions contained in sec....

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....ner (Appeals) was to be deleted." 3.3. Ld. counsel further submitted that the assessee had got his accounts audited by CA and had filed the tax audit report along with the income-tax return for the year under appeal. Photo copy of the tax audit report is contained at pages 31 to 38 of the PB. Further, the assessee had filed copy of the statements issued by India Bulls Securities Ltd., in respect of delivery account as well as in respect of Future & options before the CIT(A) and ITO. Dealings with the said share broker was only investment. In view of these facts, the CA did not take into account the said losses in respect of the said investments and tax audit report was made in respect of assessee's advertising business. 4. Ld. DR submitte....