Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (4) TMI 1719 - AT - Income TaxLevy of penalty u/s 271AAB - penalty was initiated by AO u/s 271AAB(1)(a) whereas while levying penalty, it was levied u/s 271AAB(1)(c) - assessee surrendered income during the search action carried out at his premises u/s 132 - AO had made the additional disallowance u/s 14A in addition to the suomotu disallowance returned by the assessee - HELD THAT:- It is quite apparent that the issue of disallowance of expenditure on the aforesaid three issues was a debatable one and in fact in the light of the various decisions of the Hon'ble High Courts, the assessee has a fair case on merits and that it cannot be said that there was any intentional act on the part of the assessee to claim any inadmissible expenditure, rather, the assessee had put a bonafide claim of the allowance/expenditure on these issues. What we wish to convey through the aforesaid discussion is that even despite certain disallowances made by the AO it cannot be said that assessee had claimed any inadmissible expenditure which would fall within the definition of “undisclosed income” as defined under the provisions of section 271AAB. Except the aforesaid disallowance made by the AO on debatable issues, there is no case of the Department in respect of any inadmissible expenditure claimed by the assessee which would cover the surrendered income of ₹ 14 cores. From the facts on the file, it is established that the aforesaid surrender of ₹ 14 crores was based on the mere statement of the assessee and nothing incriminating material which would constitute “undisclosed income” as per the provisions of section 271AAB was detected or found during the search action. In view of the various case laws as discussed above, the aforesaid amount for ₹14 cores would not fall in the definition of ‘undisclosed income’ as defined under section 271AAB and, hence, the penalty is not leviable on the said amount under the provisions of section 271AAB. So far as the surrendered amount of ₹ 39.99 lacs is concerned, same was offered on account of profits on stock found short during the search action. Admittedly, the stock was found short during the search action. In fact, the Assessing officer apart from the above surrender of ₹ 39.99 lacs has made further addition of ₹ 2.58 cores on this issue. It is apparent that the aforesaid profit on short stock were not accounted for by the assessee but was only detected during the search action. The assessee has substantiated the manner of earning of the said income which include the surrender income of ₹ 39.99 lacs, hence, penalty @ 10% is leviable on the aforesaid amount as per the provisions of section 271AAB (1)(a). The penalty in this case is restricted to 10% of the surrendered income on account of stock found short as per the provisions of section 271AAB (1)(a). The remaining part of the penalty is ordered to be deleted.
|