Vijay Kumar Jain Vs ITO (ITAT Jaipur)
At the outset, we note that this Tribunal has taken a consistent view that the turnover in respect of derivative transactions has to be computed by taking the total sum of positive and negative outcome of the transactions instead of the total amount of transaction.
Accordingly, when the turnover has to be computed only by taking the positive and negative outcome of the transactions and not the entire volume of the transactions, the turnover of the assessee is wrongly considered by the AO while levying the penalty under section 271A of the Act. Even otherwise, when the issue of turnover in case of derivative transactions is a debatable issue, then the assessee cannot be penalized for not maintaining the books of account as the case would definitely fall under the provisions of section 273B of the IT Act which contemplates that no penalty shall be imposable on a person or the assessee for any failure inter alia attracting the provisions of section 271A if he proves that there was a reasonable cause for the said failure. The showing of the turnover by the assessee from a derivative transaction is a bonafide explanation. Accordingly, the penalty levied under section 271A of Rs. 25,000/- is deleted.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal by the assessee is directed against the order dated 30th July, 2018 of ld. CIT (A), Ajmer arising from the penalty order passed under section 271A of the IT Act for the assessment year 2015-16. None has appeared on behalf of the assessee when this appeal was called for hearing. Since the assessee has already filed the written submissions and paper book in this case, therefore, we proposed to decide this appeal on the basis of written submissions filed by the assessee as well as the arguments of the ld. D/R. The assessee has raised the following grounds :-
“ 1. That penalty under section 271A confirmed by ld. CIT (A) is bad in law and facts of the case as –
