MANISHA GAHLOT,JAIPUR vs. ACIT WRAD 1(3) JAIPUR, JAIPUR
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Income Tax Appellate Tribunal, JAIPUR BENCHES, “SMC” JAIPUR
Before: SH. SANDEP GOSAIN & DR. M. L. MEENA
Per Dr. M. L. Meena, AM:
The captioned appeal has been filed by the assessee against the
order of the ld. CIT(A) National Faceless Appeal Centre (NFAC), Delhi dated 15.09.2023 in respect of Assessment Year: 2010-2011 challenging
2 ITA No. 683/JPR/2023 Manisha Gahlot v. ACIT therein confirmation of levy of penalty of Rs.25000/- u/s 271A of the Income
Tax Act, 1961 in arbitrary manner.
At the outset, the ld. Counsel for the assessee has submitted that the
assessee was not liable to maintaining books of account u/s 44AA of the IT
Act, 1961 as it applies to those assessee who is having income from
business or profession wherein the appellant assessee has filed return of
income showing income from capital gains and other sources which has
been accepted by the ld. Assessing Officer (APB pg. 5-6). He contended
that the assessee has submitted a copy of statement of IIFL for the period
under consideration with the details of his share transactions and copy of
bank pass book. After due verification of detailed documents filed, the AO
has accepted the income disclosed in the return of income under the head,
short term capital loss of Rs.(-) 52,476/- as per para 2 of assessment order
(APB pg. 6). The counsel further argued that the AO has assessed income
of the assessee u/s 143(3)/148 on total income at Rs. Zero. The ld. AR
argued that as the assessee is not required to maintain books of account
u/s 44AA of the IT Act as it was not engaged in any business or profession
activities as she has made investment in shares and incurred a short term
capital loss of Rs.52,476/- on delivery based investment and has been duly
accepted by the Assesing Officer. The ld. Counsel has taken an alternate
3 ITA No. 683/JPR/2023 Manisha Gahlot v. ACIT argument if on assumption the income from intraday transaction is taken
under the head business and profession even then the assessee is not
liable to maintain books of account because turnover in the case of intraday
transaction is total profit in intraday trading and total loss an intraday
trading as per guidance note on tax audit u/s 44AA of the Income Tax Act,
1961 issued by the Chartered Accountant (APB pg. 9). Accordingly, he has
pleaded that the decision of the ld. CIT(A) NFAC is illegal being passed in
arbitrary manner and against the facts of the case. He pleaded that the
penalty imposed u/s 271A amounting to Rs.25000/- may be deleted.
Per contra, the ld. DR relied on the impugned order.
We have heard the rival contention, perused the material on record,
and the impugned order. It is undisputed fact on record that the Assessing
Officer has accepted the income disclosed in the return of income as short
term capital loss of Rs. (-) 52,476/- after satisfying itself on due verification
of the documentary evidence. The ld. CIT(A) has observed vide para 6 that
the penalty has not been imposed for violation of section 44AA of the Act
on account of income being more than 1,50,000/- but the appellant has
violated the provisions of section 44AA of the Act on account of non
keeping of books of account, though the turnover exceeded the limit given
4 ITA No. 683/JPR/2023 Manisha Gahlot v. ACIT u/s 44AA of the Act, ignoring the finding of the AO as regarding the
acceptance of the return of income under the short term capital loss of
Rs.(-) 52,476/- declared with the supporting documentary evidences as
stands verified during the assessment proceedings. Further, the ld. CIT(A)
has not addressed the fact that the assessee was not engaged in the
business activity of share trading rather he was an investors in the shares
and incurred a capital loss as above. The ld. CIT(A) has merely mentioned
that the appellant had submitted statements of share trading toward
appellate proceedings where total turnover has been worked out as
Rs.22,81,746/-. However, the statement share reveals that there is not
frequent trading of shares in the account of assessee to presume in the
nature of business amounting to purchase of shares worth of Rs.
1,000,1,798/-. We find that the ld. CIT(A) has not rebutted the contention of
the ld. AR that the assessee was dealing in share investment and not in the
business activities as the department also accepted the loss of return filed
by the assessee. In our view, when the assessee has filed a return on
account of short term capital loss duly accepted by the ld. AO, then there
wouldn’t be any question of business activity being carried out by the
assessee, meaning thereby the provisions of section 44AA of the Act would
not arise in the case of the appellant assessee and no penalty u/s 271A
5 ITA No. 683/JPR/2023 Manisha Gahlot v. ACIT would be initiated. Accordingly, we hold that the ld. CIT(A) decision is infirm
and perverse to the facts on record and the same would be liable to be set
aside.
In the above view, we accept the grievance of the assessee as
genuine and as such penalty levied of Rs.25,000/- u/s 271A of the Income
Tax Act, 1961 is hereby deleted.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 15.02.2024
Sd/- Sd/- (Sandeep Gosain) (Dr. M. L. Meena) Judicial Member Accountant Member *GP/Sr.PS* Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The ld. CIT (4) The ld. CIT(A) (5) The DR, I.T.A.T., Jaipur (6) Guard File By Order,
Asstt. Registrar
