Amol Shridhar Chougule Vs ITO (ITAT Pune)
Recharge Value Is Not Distributor’s Turnover: Penalty of ₹1.50 Lakh u/s 271B Deleted
Background
The assessee was an individual carrying on business under the name Bharat Communications. He operated as a super distributor of Vodafone-Idea Cellular Limited & facilitated the distribution of mobile recharge vouchers to customers.
For AY 2017-18, the assessee filed his return of income on 31.03.2018, declaring total income of ₹2,69,420. The return was selected for scrutiny, & the AO completed assessment u/s 143(3) on 13.11.2019 by accepting the returned income.
Although no addition was made in the assessment, the AO noticed that substantial transactions had passed through the assessee’s bank account. Treating the aggregate value of those transactions as the assessee’s business turnover, the AO concluded that it exceeded the threshold prescribed u/s 44AB.
Since the assessee had not obtained a tax audit report, the AO initiated penalty proceedings u/s 271B & imposed the maximum penalty of ₹1,50,000.
The CIT(A) confirmed the penalty. The assessee therefore approached the Pune Tribunal.
Bank Credits Treated as Turnover
The Department’s case was based upon the volume of transactions reflected in the bank statements. The bank account showed payments made for procuring recharge vouchers from Vodafone, followed by their distribution to retailers or customers.
