SANGEETA KESHARWANI,HOWRAH vs. ITO, WARD - 47(3), KOLKATA, KOLKATA

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ITA 641/KOL/2018Status: DisposedITAT Kolkata20 November 2019AY 2008-092 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the turnover for derivatives trading should not be considered as the total transactions for the purpose of Section 44AB. Therefore, the penalty under Section 271A was deleted.

What were the facts?

The assessee was penalized under Section 271A for not maintaining books of account regarding derivatives trading. The Assessing Officer and CIT(A) believed her turnover exceeded the threshold requiring such maintenance.

What were the issues?

Whether the turnover from derivatives trading necessitates maintaining books of account under Section 44AB, and if the penalty under Section 271A was justified.

Which sections of the Income-tax Act were involved?

Section 271A,Section 44AB,Section 44AF

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, KOLKATA BENCH “B” KOLKATA

Before: Shri S.S.Godara & Dr. A.L. Saini

PER S.S.Godara, Judicial Member:

- This assessee’s appeal for assessment year 2008-09 arises against Commissioner of Income Tax (Appeals)-14 Kolkata’s order dated 31.01.2018 passed in case No.68/CIT(A)-14/Wd-47(3)/2016-17 upholding Assessing Officer’s action imposing penalty of ₹25,000/- involving proceedings u/s 271A of the Income Tax Act, 1961; in short ‘the Act’. Heard both the parties. Case file perused.

2.

The assessee’s sole substantive grievance pleaded in the instant appeal challenges correctness of both the lower authorities action imposing u/s 271A for not maintaining books of account regarding derivatives trading in stock exchange. The Assessing Officer as well as CIT(A) are of the view that the assessee’s future and options transactions (F&O) value reads a figure of ITA No.641/Kol/2018 A.Y. 2008-09 Sangeeta Kesharwani. Vs. ITO Wd-47(3), Kol Page 2 ₹15,77,30,672.32 in the impugned assessment year and therefore, she was supposed to maintain her books of account u/s.44AB of the Act. There is dispute that the assessee’s profits u/s44AF @ 0.25% on turnover come to ₹39,49,110/- as against the statutory threshold limit of ₹40 lac u/s 44AF of the Act in the relevant previous year. The tribunal’s co-ordinate bench’s decision in Banwari Sitaram Pasari (HUF) vs. ACIT (2013) 140 ITD 320/29 taxmann.com (Pune Trib.) holds that the turnover in such case of trading of commodities as a speculation activity does not involve total transactions’ figure as adopted by both the lower appellate proceedings. We therefore delete the impugned penalty forming subject-matter of instant lis on this count alone.

3.

This assessee’s appeal is allowed. Order pronounced in the open court 20/11/2019 (लेखा सद%य) ("या'यक सद%य) ( A.L.Saini) (S.S.Godara) (Accountant Member) (Judicial Member) Kolkata, *Dkp (दनांकः- 20/11/2019 कोलकाता । आदेश क" ""त"ल"प अ"े"षत / Copy of Order Forwarded to:- 1. अपीलाथ"/Appellant-Sangeeta Kesharwani, 134F, Sukhi Sansar Apartment, Salkia School Road, Golabari, Howrah-711 106

2.

""यथ"/Respondent-ITO Wd-47(3), 3, Govt. Place (West), Kolkata-700 001 3. संबं3धत आयकर आयु4त / Concerned CIT Kolkata 4. आयकर आयु4त- अपील / CIT (A) Kolkata 5. 7वभागीय "'त'न3ध, आयकर अपील"य अ3धकरण, कोलकाता / DR, ITAT, Kolkata 6. गाड< फाइल / Guard file. By order/आदेश से, // सहायक पंजीकार आयकर अपील"य अ3धकरण, कोलकाता ।

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