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2020 (3) TMI 1412 - AT - Income TaxPenalty u/s.271AAB - undisclosed income - disclosure was on account of inflated expenses - HELD THAT:- Lower authorities failed to establish that the assessee had disclosed the income with reference to any specific loose papers / assets etc. AO had failed to substantiate that the disclosure made u/s 132(4) was on the basis of any incriminating material. Therefore, the requirement that there must be undisclosed income in terms of Explanation (c) to Sec. 271AAB was not fulfilled. We find that a total disclosure of Rs.10.51 Crores was made with respect to various entities including assessee as well as Bharatkumar Parikh besides other entities. In the case of assessee, the disclosure was on account of inflated expenses. However, no incriminating material was found during search operations and the undisclosed income was not represented by any money, bullion, Jewellery or other valuable article or thing or any entry in the books of accounts. None of the entries in the books was found to be false and the disclosure was voluntary. Therefore, the same would not fall within the term undisclosed income as defined in Explanation-c(ii) to Sec.271AAB. Hence, the factual matrix do not convince us to confirm the impugned penalties. By deleting the same, we allow both the appeals.
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