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2020 (9) TMI 1156 - AT - Income TaxPenalty u/s 271AAB(1)(a) - additional income surrendered by the assessee u/s 132(4) - income disclosed in the return of income filed after search & seizure action - HELD THAT:- Additional income surrendered by the assessee have been accepted by the Department on the basis of the explanation given by the respondent and on the basis of offering the same as business income which is even clearly discernable from the assessment order. It is also not in dispute that the assessee company has no other source of generating income other than the business carried out by it as per the objects for which it is registered. This fact was not in dispute and method and manner of additional income offered was duly explained to the Investigation Wing and also during the course of assessment proceedings which is well evident from the assessment order itself. We find that under the similar facts, we both the undersigned of this order have adjudicated the similar issue in assessee’s another group concern M/s. Keti Sangam Infrastructure (I) Ltd and Keti-T Construction (India) Ltd [2018 (6) TMI 1525 - ITAT INDORE]wherein deleted the penalty levied u/s 271AAA. Defective notice - As notice clearly spells out that the provisions under which the notice was issued for levy of penalty u/s 271AAA but the charges mentioned therein refers to those provided in Section 271(1)(c) of the Act. Ld. A.O failed to mention the charges provided u/s 271AAA of the Act. We find that this issue is also squarely covered in favour of the assessee by the decision in the case of Gillco Developers & Builders (P) Ltd [2017 (8) TMI 1468 - ITAT CHANDIGARH] wherein the Tribunal after observing that the notice issued is defective held in favour of the assessee and quashed the penalty proceedings As penalty proceedings carried out in the case of the assess were void ab-initio since the notice issued itself is defective and not in accordance with law. Thus we find no reason to interfere in the finding of Ld. CIT(A) deleting the penalty levied u/s 271AAA - Decided against revenue. Penalty u/s 271AAB(1)(a) - income offered by the assessee u/s 41(1) on account of writing off outstanding credit balance in the name of a creditor - HELD THAT:- Alleged outstanding amount was offered to tax u/s 41(1) of the Act in the Income Tax Return filed u/s 139(1) of the Act. In these given facts and circumstances of the case, we are of the considered view that the alleged outstanding amount offered to tax u/s 41(1) of the Act on account of “cessation of liability” is not an undisclosed income since the relevant information about alleged undisclosed income was duly recorded in the books before the date of search and sufficient documentary evidences are available to prove this fact. The alleged amount was brought forward from preceding year and thus forming part of audited books of accounts. Thus the amount offered to tax u/s 41(1) of the Act is not a undisclosed income since it was shown in the return of income filed u/s 139(1) of the Act. Therefore in our view the action of the Ld. A.O levying penalty u/s 271AAB(1)(a) @10% on the alleged undisclosed income was not justified and uncalled for. Therefore Ld. CIT(A) has rightly allowed the ground raised by the assessee on merits of the case holding that penalty was not leviable u/s 271AAB - Decided against revenue.
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