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2019 (1) TMI 1405 - AT - Income TaxPenalty u/s. 271AAA - undisclosed income of the ‘specified previous year’ - "Sakhare” is a person different from the assessee - Held that:- In the absence of any specific prefix used to the term ‘search’ in clause (b) of the Explanation defining ‘specified previous year’, we can assign only one meaning to the word ‘search’ in both the sub-clauses. Going with our interpretation, the year in which search is conducted has also to be seen as the year in which the search is initiated and not the year in which it is concluded. The word 'conduct’ means to execute. A search is conducted when it actually takes place. We cannot say that a search is conducted on its conclusion. The ‘specified previous year’ under clause (b)(ii) of the Explanation to section 271AAA means the previous year in which the search was initiated. As the search in this case was initiated on 11-02-2009, which falls in the previous year ending 31-03-2009, the assessment year 2009-10 becomes the relevant previous year. It is thus held that the assessment year 2009-10 under consideration is the ‘specified previous year’ in terms of Explanation (b)(ii), being, the previous year in which the search was conducted. In that view of the matter, we do not find any infirmity in the passing of the instant penalty order u/s.271AAA for the assessment year 2009-10. The contention raised by the assessee in this regard is thus repelled. AO did not impose any penalty u/s 271AAA on the income ₹ 2.07 crore. Further, there is no whisper whatsoever on this score in the penalty order passed by the AO u/s 271AAA of the Act. In fact, the AO considered such income of ₹ 2.07 crore in his penalty order separately passed u/s 271(1)(c) of the Act. Under such circumstances, the enhancement power of the ld. CIT(A) cannot be extended to income of ₹ 2.07 crore. This legal issue is settled in favour of the assessee. It is observed from the relevant seized document that the income, representing figures which appear under the name of the assessee totaling up to ₹ 2.77 crore, was promptly offered for taxation. Then there are certain figures appearing under the name of 'Sakhare’, which total up to ₹ 2.07 crore. It is this item of income on which the assessee has disputed the imposition of penalty on the ground that it did not pertain to him. There is no dispute on the fact that 'Sakhare’ is a person different from 'Kakade’, namely, the assessee. Page number 57 onwards of the paper book is a copy of registered Transfer deed dated 20th September 2011 in respect of a bungalow at Jalbaug Co-operative Housing Society Mumbai. This Transfer deed has been executed between “Sakhare” and the 'Kakade’, namely, the assessee on one hand and one Shrimati Anita J. Suri, on the other. This Transfer deed also mentions Permanent Account Number of Sh. Sakhare as distinct from the assessee. Not only that, even photographs of Shri Sakhare and the assessee have been incorporated on such a Transfer deed. It thus becomes crystal clear that “Sakhare” is a person different from the assessee. If there is certain undisclosed income pertaining to “Sakhare”, the same cannot be included in the income qualifying for penalty imposable on the assessee u/s 271AAA even though such an income got assessed in his hands. We therefore, order to delete penalty on income of ₹ 2.77 crore. Appeal of the assessee is partly allowed.
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