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2017 (11) TMI 678

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..... s case to be eligible for tax audit and had accordingly, filed the return of income u/s 139(1) of the Act on 30.09.2013 for the assessment year 2013-14. It is not in dispute that the due date for filing return of income for non-tax audit assessees is 31.07.2013 for the assessment year 2013-14. In the instant case, the assessee himself had accepted the fact that he is engaged in commodities trading business and accordingly, he is mandated to maintain books of accounts u/s 44AA of the Act. It is not in dispute that as on date of search i.e. 01.08.2012, the assessee had not entered the commodities transaction in its books of accounts. Hence, as per the definition of undisclosed income given in Explanation C to Section 271AAB of the Act, the .....

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..... e Tax Act, 1961 [in short the Act ] passed by the DCIT, CC-2(2), Kolkata [hereinafter referred to as Ld. AO ] for the assessment year 2013-14 dated 24.02.2015. As the issues involved in all these appeals are identical, they are taken up together and disposed off by this common order for the sake of convenience. 2. The only issue to be decided in these appeals is as to whether the Ld. CIT(A) was justified in deleting the penalty levied u/s 271AAB of the Act, in the facts and circumstances of the case. 3. The facts pertaining to Shri Amit Agarwal (I.T.A. No. 1471/Kol/2015) are considered herein for adjudication and the decision rendered thereon would apply with equal force to remaining two assessees also in view of identical facts exc .....

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..... turn of income filed within the time limit prescribed u/s 139(1) of the Act and paid the due taxes thereon. The Ld. AO observed that since all the aforesaid cumulative conditions were duly satisfied by the assessee, the assessee would be invited with penalty calculated at 10% undisclosed income amounting to ₹ 30lakhs ( 10% of 3 crores) as per provisions of Section 271AAB(1)(a) of the Act. The assessee submitted that it has engaged in commodities trading during the year under appeal and was not required to maintain books of accounts as per Section 44AA of the Act as commodity profit derived was sort of windfall gain and more of a speculative nature. Hence the same would not be covered under the ambit of business income. Since there .....

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..... pal Chief commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner before the date of search; or (ii) Any income of the specified previous year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the specified previous year which is found to be false and would not have been found to be so had the search not been conducted. Based on the aforesaid definition, the Ld. AO observed that since the assessee has not entered the commodity transaction in the books of accounts, the same takes the character of undisclosed income of the assessee and hence, the penalty is automatically exigible u/s 271 .....

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..... books of accounts) is not justified. It is so, because it does not prove the guilty mind and intention to conceal the income on the part of the assessee. It also does not prove that had there been no search operation, the assessee would not have declared such income in the return of income. Accordingly, assessee s appeal on grounds no. 1 and 2 are allowed. 7. Aggrieved, the Revenue is in appeal before us on the following grounds: 1. That on the facts and circumstances of the case, the Ld. CIT(A) has not at all understood the new provision of Section 271AAB and has erroneously deleted the penalty imposed u/s 271AAB of the IT Act, 1961. 2. That as per the provisions of Section 271AAB of the Income Tax Act, 1961 newly introduce .....

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..... e himself had considered his case to be eligible for tax audit and had accordingly, filed the return of income u/s 139(1) of the Act on 30.09.2013 for the assessment year 2013-14. It is not in dispute that the due date for filing return of income for non-tax audit assessees is 31.07.2013 for the assessment year 2013-14. In the instant case, the assessee himself had accepted the fact that he is engaged in commodities trading business and accordingly, he is mandated to maintain books of accounts u/s 44AA of the Act. It is not in dispute that as on date of search i.e. 01.08.2012, the assessee had not entered the commodities transaction in its books of accounts. Hence, as per the definition of undisclosed income given in Explanation C to Sectio .....

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