2024 (8) TMI 554

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....) and it relates to AY. 2012-13. 2. Ld.AR submitted that the assessee had earned dividend income of Rs. 38.95 crores and claimed the same as exempt. The only income of the assessee during the year was the dividend income. Besides the above, the assessee has declared marginal amount of Rs. 19,716/- towards Provision written back. The above said dividend income was claimed as exempt u/s. 10(34) of the Act. Hence, there was no receipt taxable under the Act and hence there was no requirement to get its accounts audited u/s. 44AB of the Act. However, the AO took the view that the main activity of the assessee is investment activity and hence, dividend income was considered as "business receipts" by the AO. Accordingly, the AO has levied the p....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....f profits and gains of business or profession. Section 44AB of the Act becomes operative where there is computation of profits and gains of business or profession as a part of total income. In other words, it has no applicability where the assessee is not involved in or has no income from profits and gains from business or profession. In the present case, it was not disputed that the income of the assessee was exempted under Section 10(20) of the Act which falls in Chapter III of the Act. There was no income of the assessee which would fall under heading "profits and gains of business or profession". Once that was so, it could not be said that the provisions of Section 44AB were applicable and as a sequel thereto, penalty under Section 271B....