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| The Tax Publishers2020 TaxPub(DT) 2728 (Jp-Trib) INCOME TAX ACT, 1961
Section 271B
In terms of Guidance note of ICAI in respect of tax audit under section 44AB, turnover in respect of speculative transactions shall be sum total positive and negative differences of transactions ignoring the sign and not volume of speculative transactions, accordingly, turnover of assessee did not exceed limit as provided under section 44AB, thus, penalty imposed under section 271B was deleted.
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Penalty under section 271B - Applicability of provision of section 44AB - Computation of turnover of derivative transactions - Consideration of sum total of volume of speculative transaction vis-Ã -vis positive and negative differences of transactions
Issue arose as to whether provisions of section 44AB were applicable in case of assessee when assessee did share trading in intraday segment and some of transactions were delivery based transaction. AO proceeded on basis that turnover of derivative was more than Rs. 127 Cr. whereas total difference of positive and negative outcome of speculative transactions was only Rs. 22,55,040. Held: In Guidance note of ICAI in respect of tax audit under section 44AB, turnover or gross receipt in respect of speculative transactions has been considered as sum total of positive and negative outcome of the speculative transactions. Thus, contention of assessee that turnover in respect of speculative transactions shall be positive and negative differences of transactions and not volume of speculative transactions. Accordingly, turnover of assessee would not exceed limit as provided under section 44AB, thus, penalty imposed under section 271B was deleted.
Followed:Shri Rajjak Ahmed Khan v. ITO in ITA No. 1181/JP/2019 vide Order, dated 13-1-2020 : 2020 TaxPub(DT) 1410 (Jp-Trib) and Shri Sanjay Prakash v. ITO in ITA No. 1052 to 1054/JP/2019 : 2020 TaxPub(DT) 1418 (Jp-Trib).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2010-11
IN THE ITAT, JAIPUR,'A' JAIPUR BENCHES
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