TMI Blog2019 (9) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... rokerage and discrepancies in the books of accounts which has remained unretracted. We concur with the findings of the CIT(A) that the specific admission of the assessee to the undisclosed income and discrepancies in its accounts constituted incriminating material representing undisclosed income of the assessee for the purposes of levy of penalty under section 271AAB of the Act. We, therefore, uphold the order of the Ld. CIT(A) confirming the levy of penalty.- Decided against assessee. - ITA No.935/Chd/2018, 936/Chd/2018 - - - Dated:- 30-4-2019 - SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER Assessee by: Shri Sudhir Sehgal, Adv. Revenue by: Shri Manjit Singh, Sr. DR ORDER Per Annapurna Gupta, Accountant Member The present appeals have been filed by different assessees against the separate orders of the Commissioner of Income Tax (Appeals)-5, Ludhiana (in short CIT(A) both dated 20.4.2018 confirming the levy of penalty u/s 271 AAB of the Income Tax Act, 1961 (hereinafter referred to as Act ). 2. It was common ground that the issue involved in both the appeals was identical, relating to levy of penalty u/s 271 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come up in appeal before us, raising the following grounds: 1. That the Ld. Commissioner of Income Tax (Appeals) has erred in confirming the levy of penalty u/s 271AAB r.w.s. 274 of the Income Tax Act, 196,1 amounting to ₹ 1,00,000/- 2. That the confirmation of penalty is against the facts and circumstances of the case. 3. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 6. During the course of hearing before us, the Ld. counsel for assessee reiterated the contentions made before the lower authorities. The Ld. counsel for assessee contended that there was no undisclosed income, as defined in section 271AAB of the Act and, therefore, no penalty could be levied. The Ld. counsel for assessee drew our attention to the definition of the undisclosed income in Explanation to section 271AAB of the Act as under: 271AAB:- Explanation.-For the purposes of this section,- (a) xxxx (b) xxxx (i) xxxx (ii) xxxx (c) undisclosed income means- (i) any income of the specified previous year represented, either wholly or partly, by any money, bullion, j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. ACIT Vs. S.Martin, ITA No.2382/CHENY/2016 CHENAI-TRIB 5. DCIT Vs. M/s Aryan Mining Trading Corporation Ltd., ITA No.1601/KOL/2017 KOLTRIB 6. DCIT Vs. Rashmi Cement Ltd., ITA No.1606/Kol/2017 KOL-TRIB 7. DCIT Vs. Rashmi Metaliks Ltd., ITA No.1608/Kol/2017 KOL-TRIB 8. The Ld. DR at this juncture countered by drawing our attention to the surrender letter of the assessee reproduced in the penalty order as under: The Joint/Additional Director of Income Tax (Inv.), Ludhiana Dt. 11-4-2014 Sir, Re: Search and seizure operations at the residential and business premises of M/s Deepak Builders and other Group of Cases. This has a reference to the search and seizure operations carried out by the department on 20,03.2014 at the various business premises of M/s Deepak Builders Group of Companies and residential premises of the Directors/Partners. During the course of search, certain discrepancies were there in the cases of Deepak Builders .and other Companies, Partnership Firms and Individuals cases of (Group; These discrepancies were in .respect. of; the books of accounts of the business maintained by the assessee and also, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,00,000.00 60,00,000.00 60,00,000.00 21,00,000.00 Offered as Business' income to cover any discrepancies in the seized documents as found and seized during the course of search as per various Annexure and for any kind of discrepancy in the regular books of accounts and the above income was earned in the same manner as reflected in my return of income. The above income is reflected in various personal assets including amount spend on construction, cash and to cover any investment in the immovable/moveable asset. The income for the Assessment Year 2008-2009 to 2013-2014 is being offered subject to no penalty U/s 271(1)(c) of the Income Tax Act, 1961 and the same' may please be accepted. 3. Smt. Sunita Singal 2014-15 15,00,000.00 Offered income earned from sale or purchase of property and the same income reflected in construction/invest merit to immovable assets and to cover any other asset or, documents as found during the course of search and jewellery, cash etc. and other misc. activities. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The above offer in, the .different years as mentioned .above is being made as per the provisions of income Tax Act and this offer is being made Subject to no penalty u/s 271AAA/ 271AAB/271(1)(c) and prosecution and the above income shall be declared by our group concerns in respective years. While filing the return in the relevant years over and above. 9. Referring to the same the Ld. DR pointed out that the assessee had surrendered an amount o ₹ 10 lacs in his case and as per the surrender letter it was on account of discrepancy in the books of account of the business of the assessee and certain entries not recorded in the regular books of account which were noted during search. The Ld. DR pointed out that the assessee had even stated in the surrender letter that it had derived income from commission/brokerage from property on account of which the surrender had been made. Our attention was drawn to para-1 of the surrender letter pointing out that the above facts had been stated therein. The Ld. DR thereafter drew our attention to para-3 of the letter pointing out that the assessee had reiterated the fact that the surrender was being made on account of discrepanci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the return of income furnished for the specified previous year; and (B) pays the tax, together with interest, if any, in respect of the undisclosed income; (c) a sum which shall not be less than thirty per cent but which shall not exceed ninety per cent of the undisclosed income of the specified previous year, if it is not covered by the provisions of clauses (a) and (b). (2) No penalty under the provisions of clause (c) of sub-section (1) of section 271 shall be imposed upon the assessee in respect of the undisclosed income referred to in sub section (1). (3) ... As admitted by the AR also, that the income of ₹ 10,00,000/- was surrendered during the search. Regarding the basis it was admitted (as per the surrendered letter reproduced by the AO in the penalty order) by the assessee that cover all the documents as found during the course of search and the income has been derived from commission/brokerage from property dealing . The AO has rightly mentioned that in this case the income of ₹ 10,00,000/- was disclosed by the assessee in the return of income and the same was not disclosed to the Department till the search action. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , purchases outside the books of account, besides profit element on account of variation in the sale rates of flat, etc. Clearly, the surrender being so specific cannot not be said to be merely to buy peace of mind. Further, the assessee has never retracted the surrender so made; on the contrary, he has disclosed the amount surrendered as his business income in the return of income filed and accepted the assessment of the same as such, by the A.O. All the above facts have remained uncontroverted before us. This specific unretracted admission of the assessee of earlier undisclosed income and discrepancies in the books of account, we hold, is without any doubt the best piece of evidence against the assessee and is incriminating material enough representing undisclosed income for the purpose of levy of penalty under section 271AAB of the Act. The assessee had himself admitted to the fact of having not disclosed the income on account of brokerage and commission earned and had himself admitted to the fact that there were discrepancies and unrecorded entries in his books of account and also certain rough notings and estimates. Having himself admitted to all these facts and at no point of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we concur with the findings of the Ld. CIT(A) that the specific admission of the assessee to the undisclosed income and discrepancies in its accounts constituted incriminating material representing undisclosed income of the assessee for the purposes of levy of penalty under section 271AAB of the Act. We, therefore, uphold the order of the Ld. CIT(A) confirming the levy of penalty. In view of the above the appeal filed by the assessee is dismissed. 14. Now, taking up the appeal of the assessee in ITA No.936/CHD/2018, the facts of the case we find are identical, with the assessee, Smt. Sunita Singal, also being one of the persons searched in the Deepak Singal group of cases and the assessee having surrendered an amount of ₹ 15 lakhs during the course of search, on which penalty under section 271AAB of the Act was levied. The arguments of the Ld.Counsel for the assessee, against levy of penalty were identical as in the case of Sh. Vishal Singal in ITA No.935/CHD/2018 dealt with us above, that no incriminating material representing undisclosed income was found during the course of search. 15. In this case, we have noted from the surrender letter of the assessee reproduce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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