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2020 (9) TMI 622 - AT - Income TaxPenalty u/s 271AAB - surrender of cash and jewellery pursuant to search - HELD THAT:- When the Department has not made any efforts to ascertain the year of acquisition of the jewellery and then to apply the rates as prevailing in the year of acquisition and some of the jewellery even not acquired by the assessee or the family members but is inherited, then the manner in which the disclosure is obtained on account of the jewellery would not represent the ‘’undisclosed income’’ as defined in explanation to Section 271AAB. We find that the order of the AO u/s 271AAB. We find that the order of 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. Personal jewellery of the assessee and the family members acquired in the past and some part of which was also inherited, will not fall in the ambit of ‘’undisclosed income’’. Statement recorded u/s 132(4) of the Act itself would not either constitute an incriminating material or ‘’undisclosed income’’ in the absence of any corresponding asset or entry in the seized documents representing the ‘’undisclosed income’’. Accordingly, the penalty levied by the AO on account of cash found and on account of unexplained jewellery stand deleted. Thus the appeal of the assessee is allowed. Therefore, while applying the principles in the case of Shri Gopal Das Sokhiya [2019 (4) TMI 1300 - ITAT JAIPUR] wherein the facts were similar, we are of the considered view that 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) of the Act itself would not either constitute an incriminating material or ‘’undisclosed income’’ in the absence of any corresponding asset or entry in the seized documents representing the ‘’undisclosed income’’. Penalty levied by the AO on account of cash found and on account of unexplained jewellery stand deleted. Penalty u/s 271AAB(1)(c) - advances paid by the assessee - HELD THAT:- In the definition of undisclosed income where 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”, what perhaps has been envisaged by the legislature is an inflow of funds in the hands of the assessee which has been found by way of any entry in the books of accounts or other documents, and which has not been recorded before the date of search in the books of accounts or other documents maintained by the assessee in the normal course and not vice-versa. We are also conscious of the fact that there are deeming provisions in terms of section 69 and 69B wherein such amounts may be deemed as income in absence of satisfactory explanation. No new facts or circumstances have been brought before us by the Revenue in order to controvert or rebut the lawful findings so recorded by the ld. CIT(A). - Decided against revenue.
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