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Income Tax Appellate Tribunal, “A”
Before: SHRI S.S.GODARA & DR. DIPAK P. RIPOTE
आयकर अपीलीय अिधकरण “ए” "ायपीठ पुणे म"। IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपीलसं. / ITA No.1134/PUN/2018 िनधा"रणवष" / Assessment Year : 2013-14 Dilip Shantilal Solanki, The Dy.Commissioner of 204, 2nd Floor, Vishnu Bhawan, Vs Income-tax, Circle-8, Pune. Budhwar Peth, Pune – 411002. . PAN: AEGPS 2593 Q Appellant/ Assessee Respondent /Revenue Assessee by None. Revenue by Shri S P Walimbe – DR Date of hearing 08/08/2022 Date of pronouncement 29/08/2022 आदेश/ ORDER Per S.S.Godara, JM: This assessee’s appeal for Assessment Year 2013-14 is directed against the Commissioner of Income Tax(Appeals)-8, Pune’s order dated 28.09.2017 passed in case no.PN/CIT(A)-8/DCIT Cir-8/808/2017-18/227, in proceedings u/s.271B of the Income Tax Act, 1961 [in short “the Act”].
Case called twice. None appears at assessee’s behest. It is accordingly proceeded ex-parte.
Coming to the assessee’s sole substantive grievances both the learned lower authorities have erred in law and on facts in levying the impugned section 271B penalty of Rs.1,50,000/- for not getting
ITA No.1134/PUN/2018 for A.Y. 2013-14 Dilip S.Solanki (A)
his books audited, we note that the CIT(A) detailed discussion affirming the same reads as follows: “5. In Ground No.1 the appellant has challenged the penalty of Rs.1,50,000/- imposed by the AO u/s.271B of the Act. In the written submission dated 27.09.2017, made before me, it has been contended that the share transactions entered into by the appellant were initially considered as an investment and accordingly recorded in the books of accounts of Electrical switch gear and electrical goods business, as an investment ledger account, and routed through it. However, later during the course of assessment proceedings, the appellant changed his stand, -and requested the AO to treat such transactions as speculation business and allow him to set-off the speculation loss incurred, against the regular business income. On the issue of penalty u/s. 271B, the appellant’s argument is that since the said transactions were initially recorded as investment and formed part of his books of accounts of Electrical switch gear and electrical goods business, which were duly audited, and the audit report was filed online on 29/09/2013, no penalty should be levied u/s. 271B.
I have carefully considered the above submission of the appellant. The point to be noted is that the appellant has stated that initially the relevant share transactions were treated as investment by him. If that were so, then why didn’t the appellant report any capital loss / gain in respect of these transactions? The shares were bought and sold throughout the year and resulted in a massive turnover of Rs. 16,08,97,376/-, but still the outcome of these transactions was not reported in the financials of the appellant. If share transactions were treated as investment by the appellant in his books of accounts, then the profit or loss, resulting from the same, should have ITA No.1134/PUN/2018 for A.Y. 2013-14 Dilip S.Solanki (A)
been reflected either as a capital gain or a capital loss in the computation of income. But no such disclosure was made in the computation of income filed by the appellant, nor were any details, in respect of these transactions, reported in the computation of income. This clearly shows, that these transactions were never treated as an investment by the appellant, and the theory propounded by the appellant is blatantly wrong. Just by opening a ledger account, these transactions cannot be characterized as an investment. On the contrary, in his later plea, before the AO, the appellant himself requested the AO to treat the loss incurred from these share transactions as a speculation business loss and allow it to be set-off against the regular income. This shows that the appellant himself admits that it had conducted speculation business resulting in turnover of Rs.16,08,97,376/-. The appellant is therefore, playing a double game. On one hand, he wants to escape the rigors of penalty u/s. 271B by stating that the relevant share transactions were treated as investments in the books of accounts which were duly audited, and on the other hand he wants to claim the benefit of set-off of speculation loss against the regular business income and reduce the latter to that extent. As a net result, the appellant wants to be rewarded for not disclosing transactions worth Rs. 16.08,07,376/- which is not acceptable. Both the pleas of the appellant are found to be contradictory and cannot be accepted at the same time. As the appellant has himself accepted/admitted that it has indulged in speculation business, which had a turnover of Rs. 16,08,97,376/-, the appellant was liable to get his books of account audited in respect of both the businesses i.e. the business of Electrical switch gear and electrical goods, as well as the speculation business. From the audit report filed, it is clear that only the business of electrical gears and electrical switches has been audited. No audit has ITA No.1134/PUN/2018 for A.Y. 2013-14 Dilip S.Solanki (A)
been done in respect of speculation business which is an admitted business of the appellant, having turnover above the limit prescribed u/s 44AB of the Act. Accordingly, it is held that the AO has rightly imposed penalty of Rs. 1,50,000/- for non audit of books of accounts of speculation business. Ground No. 1 is dismissed.”
It emerges at the outset that the assessee’s instant appeal is time barred since suffering from 191 days delay in filing which has nowhere been explained till date. This is indeed coupled with the fact that both the learned lower authorities have found his turnover as Rs.16,08,97,376/- in speculation business i.e. much above the prescribed threshold limit pertaining to the relevant previous year. Faced with this situation and in absence of the assessee having failed to explain justifiable reasons for his impugned default in getting the books audited, we conclude that both the learned lower authorities have rightly invoked the impugned penal provision. The CIT(A)’s findings extracted hereinabove stand upheld therefore.
This assessee’s appeal is dismissed.
Order pronounced in the open Court on 29th August, 2022. (DR. DIPAK P. RIPOTE ACCOUNTANT MEMBER पुणे / Pune; "दनांक / Dated : 26th Aug, 2022/ SGR*
ITA No.1134/PUN/2018 for A.Y. 2013-14 Dilip S.Solanki (A)
आदेशक""ितिलिपअ"ेिषत / Copy of the Order forwarded to : अपीलाथ" / The Appellant. 1. ""यथ" / The Respondent. 2. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीय"ितिनिध, आयकर अपीलीय अिधकरण, “ए” ब"च, पुणे / DR, ITAT, “A” Bench, Pune. गाड"फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, //// Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.