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2019 (7) TMI 222 - AT - Income TaxPenalty U/s 271AAB - search and seizure operation U/s 132 - penalty imposed based on assessee admitted ‘Undisclosed Income’ in its statement u/s 132(4) but could not furnish his return of income on or before the specified date - diary found in search in which certain advances are mentioned - from notice issued U/s 274 r.w.s. 271AAB it was not clear as to under which clause the case of assessee Company would fall - HELD THAT:- Every additional income declared in the return filed is not per se ‘Undisclosed Income’. What has been found during the course of search is a red diary, wherein there are certain notings relating to cash advances given to various persons totaling ₹ 4 crores. Besides the said document, there were no other incriminating document/material was found during the course of search. As per the definition of undisclosed income u/s 271AAB, the said cash advance cannot be stated to be income which is represented by any money, bullion, jewellery or other valuable article or thing. In the definition of undisclosed income, it talks about “income by way of any entry in the books of account or other documents or transactions found in the course of a search under section 132”. The cash advance cannot be deemed as undisclosed Income in the context of section 271AAB. For this proposition, reliance is placed on the judgment of Silver & Art Palace vs DCIT [2019 (4) TMI 634 - ITAT JAIPUR] where Hon’ble ITAT Jaipur Bench held that such cash advances cannot be deemed as ‘Undisclosed Income’ for the purpose of section 271AAB. In view of the above discussion and respectfully following the judicial pronouncements (supra), we do not find any merit for imposition of penalty in respect of declared income which is not coming in the purview of “undisclosed income” as defined under clause (c) to explanation to Section 271AAB . It is pertinent to mention here that no contrary decision was brought to our notice by the ld DR so as to persuade us to deviate from the conclusion drawn in the above judicial pronouncements as referred and relied by us. - both the appeals of the assessees are allowed
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