TMI Blog2019 (11) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 30.08.2013 - there was no pin pointed question posed by the search team in regard to incriminating material/documents related to such undisclosed income. CIT(A) has confirmed the penalty u/s. 271AAB on the assumption bases by stating that admitted undisclosed income may be directly related to entries in loose papers and transactions not recorded in the books of accounts found subsequently during the course of search on 28.10.2013. Lower authorities have failed to establish that assessee has disclosed the income with reference to any specific loose papers/asset etc. AO has failed to substantiate that the disclosure made by the assessee u/s. 132(4) was on the basis of incriminating material. In the case of ACIT Sri Kanwar Sain G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee on 12.12.2013. In response to the notice u/s. 153A the assessee has filed return of income on 27.01.2014 for A.Y. 2013-14 declaring total income at ₹ 2,61,78,280/- which included the income of ₹ 2 crore declared during the search proceedings. The assessment u/s. 153A r.w.s. 143(3) was completed on 29.02.2016 assessing the total income at ₹ 2,64,09,280/-. The AO has initiated the penalty proceedings u/s. 271AAB and levied penalty of @10% on the undisclosed income of ₹ 2 crore vide order dated 22.08.2016 u/s. 271AAB of the Act. During the course of penalty proceeding the assessee has contended that he has voluntarily made disclosure of ₹ 2,00,00,000/- and also explained the sourc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had voluntarily disclosed additional income of ₹ 10.51 crore and the income so disclosed was also bifurcated in the name of other assessee in the group and there was no reference to any material found during the course of search. Further no document found which showed additional income of ₹ 10.51 crores. It is also contended that the assessee has already made disclosure in the statement on 30.08.2013 and also in letter dated 12.09.2013 whereas the Annexure-B1 was found and seized on 28.10.2013. The Ld. Counsel has referred the following judicial pronouncements: Name of Decision Citation/ITA No. 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. 139(1) of the Act on 30.09.2013 for A.Y. 2013-14. Similarly the voluntary disclosure was shown for A.Y. 2014-15 in the original return of income filed u/s. 139(1) of the Act on 29.09.2014. The relevant provision of Sec. 271AAB of the Act is reproduced as under:- (1) The Assessing Officer may, notwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under section 132 on or after the 1st day of July, 2012 [but before the date on which the Taxation Laws (Second Amendment) Bill, 2016 receives the assent of the President], the assessee shall pay by way of penalty, in addition to tax, if any, payable by him,- (a) a sum computed at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed income is defined in Sec. 271AAB of the Act as under:- (C) undisclosed income means- (i) any income of the specified previous year represented, either wholly or partly, by any money, bullion jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found the course of a search under section 132, which has-] (A) not been recorded on or before the date of search in the books of account or other documents maintained in the normal course relating to such previous year; or (B) otherwise not been disclosed to the [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oks of accounts found subsequently during the course of search on 28.10.2013. In the light of the above facts and circumstances the lower authorities have failed to establish that assessee has disclosed the income with reference to any specific loose papers/asset etc. The AO has failed to substantiate that the disclosure made by the assessee u/s. 132(4) was on the basis of incriminating material. In this regard we have also considered the decision of ITAT Vishakhapatnam (2018) 92 taxmann.com 109 wherein it is held that the AO must establish that there is undisclosed income on the basis of the incriminating material. In the case of ACIT Sri Kanwar Sain Gupta ITA No. 538/Kol/2017 the ITAT Kolkata has held that the statement of the assessee wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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