Is value of Derivative Transactions in commodities at MCX be included in Turnover for Tax Audit purposes? Reliance in this connection can be placed on the decision of Hon’ble ITAT Mumbai Bench ‘C’ in case of Om Stock & Commodities Pvt. Ltd. vs. DCIT [2014 48 Taxmann 186] wherein the assessee is filed an appeal before the Hon’ble Tribunal against the order of the Learned CIT(A) which confirmed the penalty under Section 271B as the assessee has not audited its accounts under Section 44AB of the IT Act, 1961. The assessee submitted that the transactions carried out are speculative in nature and the Exchange issued mark-to-mark bills to recover/pay the difference in commodity prices to cover up the daily fluctuation in the prices to reduce the risk of loss and margin money. Since, no delivery was taken it was pleaded that it could not form part of the total turnover of the assessee. The Hon’ble bench observed that the issue is no longer res-integra as it has been decided in favour assessee in case of Banwari Sitaram Pasari (HUF) –wherein it has been held that “The Tribunal after considering s. 18 of the Sale of Goods Act, 1930 observed that no property in the said units passed on to the assessee in as much as the assessee never acquired the property in the units as the units contracted to be bought were future unascertained goods. Similarly, it could not pass on the property to the party to whom the units were contracted and therefore, there was no sale or turnover effected by the assessee in the legal sense for the purposes of getting the accounts audited under s. 44AB of the Act…………….” On the basis of the afore-said findings, it was held that there was no requirement to get the accounts audited u/s 44AB of the Act. Thus, penalty imposed by the AO is directed to be deleted.
Posted on: Fri, 12 Sep 2014 17:33:14 +0000
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