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2019 (4) TMI 1300 - AT - Income TaxPenalty u/s 271AAB - in SCN u/s 274 r.w.s 271AAB default has not been specified - HELD THAT:- The penalty u/s 271AAB is not mandatory but the AO has the discretion to take a decision and the same should be based on judicious decision of the AO. Accordingly following the earlier decision of this Tribunal in the case of Ravi Mathur vs. DCIT , [2018 (6) TMI 1128 - ITAT JAIPUR] we hold that the levy of penalty u/s 271AAB is not mandatory but the AO has a discretion after considering all the relevant aspects of the case and then to satisfy himself that the case of the assessee falls in the definition of undisclosed income as provided in the explanation to section 271AAB . All the SCN issued by the AO for initiation of penalty proceedings u/s 271AAB are very vague and silent about the default of the assessee and further the amount of undisclosed income on which the penalty was proposed to be levied. See M/S SSA'S EMERALD MEADOWS [2016 (8) TMI 1145 - SUPREME COURT] this issue is decided in favour of the assessee by holding that the initiation of penalty is not valid and consequently the order passed u/s 271AAB is not sustainable and liable to be quashed. Levy of penalty u/s 271AAB being unjust and against the provisions of law - undisclosed income as perexplanation to section 271AAB(1) - HELD THAT:- The entries in the seized documents representing the payment on account of land in the absence of the other essential facts regarding the particulars of the land as well as the persons do not constitute undisclosed income of the assessee as defined in the explanation to section 271AAB. Accordingly, the penalty levied under section 271AAB by the AO and confirmed by the CIT (A) is not sustainable and liable to be deleted. Excess cash found in search and seizure - Having considered the facts and circumstances of the case that out of ₹ 21,20,000/-, the department has accepted ₹ 1,20,000/- as petty pocket money and from remaining ₹ 20,00,000/-, the assessee already stated that ₹ 7 to 8 lacs were already recorded in the books of account of the family members as well as of the assessee, then the balance amount of ₹ 12 lacs has to be considered in the light of the fact that the cash was found at the residential premises and from different rooms and, therefore, the past savings of the family members cannot be ignored while considering said amount of ₹ 12 lacs as undisclosed income of the assessee. Accordingly, in the absence of any clear cut finding about the cash not representing and belonging to the other family members as their past savings, the same cannot be treated as undisclosed income of the assessee for the year under consideration. Hence the penalty levied by the AO in respect of the cash found during the search is deleted. Excess Jewellery found - HELD THAT:- The order passed by the AO u/s 271AAB as well as the order of the ld. CIT (A) are silent on the issue of incorrect valuation as well as the timing of acquiring of the personal jewellery of the assessee and the family members. Therefore, in the facts and circumstances of the case, the personal jewellery of the assessee and family members acquired in the past and some part of which was also inherited will not fall in the ambit of undisclosed income. Hence the penalty levied by the AO against such disclosure is not sustainable. It may be pertinent to mention that the statement recorded u/s 132(4) itself would not either constitute an incriminating material or undisclosed income in the absence of any corresponding asset or entry in the seized document representing the undisclosed income. Accordingly, the penalty levied by the AO u/s 271AAB is deleted. - Decided in favour of assessee.
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