TMI Blog2020 (1) TMI 962X X X X Extracts X X X X X X X X Extracts X X X X ..... A) s action deleting the sec. 271AAB penalty(ies) of ₹94,91,130/- and ₹63,03,130/-; assessment year-wise respectively, as imposed by the Assessing Officer. Both the learned representatives stated at the outset that the CIT(A) s lower appellate discussions under challenge to this effect reads as under:- 05. FINDINGS DECISION: 1. I have carefully considered the submissions of the Ld.AR of the appellant and the observations and findings recorded by the Ld. AO and the factum of the case. In the facts involved in the present case, search action u/s 132 was conducted on 11.04.2013. In the course of search, certain loose papers documents were seized which inter alia contained the details of commodity dealings by the appellant. With reference to these loose documents, the appellant admitted before the Investigating authorities that they represented his income aggregating to ₹ 3,16,37,099/- for the relevant previous year and therefore offered the same to tax in the relevant AY 2013-14. In consonance with his statement so recorded u/s 132(4), the appellant disclosed the income derived from these transactions under the head ' Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examine the term ' undisclosed income ' as defined in Explanation (c) to Section 271AAB of the Act, which reads as follows: Explanation : For the purposes of this Section (c) undisclosed income means ITA (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 in 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 Commissioner before the date of search; or (ii) any income of the specified previous year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the specified previous year which is found to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not applicable to the facts of the present case. 9. The next limb of Section 271AAB defines undisclosed income as, any entries found in the books of accounts or any documents seized in the course of search which was either not recorded in the (i) regular books on or before the date of search, or (ii) in the documents maintained in normal course of business. In this regard one would now need to understand and examine the meaning of the phase documents maintained in normal course of business . When any search operations are conducted at the premises of any appellant, it is possible that all transaction carried out by the assessee prior to the commencement of search may not necessarily be found recorded in the books to the very time date of search. It is very common for assessees to record and update their books of account at periodic intervals, which may be weekly, bi-weekly, monthly, quarterly etc. For instance the cash-book of an assessee is generally maintained an day-to- day basis. However purchases sales made in the regular course of business; are generally not recorded on the very date of receipt or dispatch of gods but on week ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee. In view of the foregoing I agree with the Ld. AR that the documents with reference to which income of ₹ 3,16,37,099/- was assessed in the appellant's hands could not be said to be incriminating in nature. The case of the appellant fell within in the second limb i.e. or other documents maintained in the normal course relating to the AY 2013-14 as stipulated u/s. 271AAB Explanation (c) (supra) which describes undisclosed income for the purposes of this section. In my considered view therefore the income of ₹ 3,16,37,099/- offered by the appellant not fall in the ambit of undisclosed income as defined in Sec. 271AAB of the Act. 11. I find that the decision rendered by the jurisdictional Hon'ble ITAT, Kolkata in the case of DCIT vs. Pradeep Kumar Agarwal in ITA no. 1478/Kol/2015 vide its order dated 25.05.2018 is squarely applicable to the facts involved in the appellant's case. In the said decision the Hon'ble Tribunal followed the decision earlier rendered by its another coordinate Bench in the case of Manish Agarwala in ITA No. 1479/Kol/2015 for AY 2013-14 dated 09.02.2018. The relevant extracts of the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,130/- was not leviable upon the appellant on the merits of the case, I do not deem fit to adjudicate the other alternate contentions raised by the appellant concerning validity of notice issued by the Ld. AO etc., since these contentions are now of only academic interest and hence not adjudicated upon. In the result, the appeal of the appellant is allowed . 3. We are next informed that the instant issue of correctness of the impugned u/s 271AAB penalty(ies) is no more res integra since this tribunal s co-ordinate bench s decision to Revenue s identical appeal(s) in ITA No. 2280 and 2281/Kol/2018 in case of assessee s family member / wife Smt. Tanuja Mantri has confirmed the CIT(A) s similar action by holding that there was no undisclosed income as stipulated u/s. 271AAB Explanation-(c) so as to invoke the penal provision as under:- 3. Both the learned representatives invite our attention to CIT(A) s identical detailed discussion in these two assessment year(s) reading as under:- 05. FINDINGS DECISION: 1. I have carefully considered the submissions of the Ld.AR of the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dity of the penalty proceedings since according to him the Ld. AO did not give proper notice in the manner prescribed. The Ld. AR further submitted in the alternate that the penalty, if any, leviable, ought to have been levied under clause (a) i.e. @ 10% instead of clause (c) i.e. 30% as levied by the Ld. AO. 3. After giving a thoughtful consideration to the facts involved in the present case, I find force in the submissions' of the appellant. The primary contention of the appellant is that the income of ₹ 1,99,54,112/- assessed by way of profit derived from commodity dealings did not constitute ' undisclosed income ' defined in Explanation (c) to Section 271AAB of the Act. In this regard it would therefore be relevant to examine the term ' undisclosed income ' as defined in Explanation (c) to Section 271AAB of the Act, which reads as follows: Explanation : For the purposes of this Section (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of a search, shall be treated undisclosed income if it was not found 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. 8. In the facts involved in the present case, it is evident that the sum of ₹ 1,99,54,112/- assessed as appellant's income for the relevant year did not represent any unexplained money, bullion, jewellery, valuable article or any other asset , for the simple reason that no such asset had been identified either by the Ld.AO and no undisclosed asset came to light as a result of the search conducted by the Investigation Authorities. Accordingly the first limb i.e. (a), is not applicable to the facts of the present case. 9. The next limb of Section 271AAB defines undisclosed income as, any entries found in the books of accounts or any documents seized in the course of search which was either not recorded in the (i) regular books on or before the date of search, or (ii) in the documents maintained in normal course of business. In this regard one would now need to understand and examine the meaning of the phase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to tax in his return of income under the head Income from Other Sources . The Ld. AO has also accepted that such income was assessable under the head ' Other Sources ' and assessed it accordingly. In the circumstances when the assessee did not carry on business or profession and was therefore not required to maintain such books of accounts, then he was required to draw up his statement of income with reference to other documents maintained by him in regular course. I note that the transactions which yielded income, was maintained in the documents records which was found seized by the Investigating Officer and it is from these documents only the AO was able to deduce the true income and expenditure of the assessee. In view of the foregoing I agree with the Ld. AR that the documents with reference to which income of ₹ 1,99,54,112/- was assessed in the appellant's hands could not be said to be incriminating in nature. The case of the appellant fell within in the second limb i.e. or other documents maintained in the normal course relating to the AY 2013-14 as stipulated u/s. 271AAB Explanation (c) (supra) which describes undisclosed income for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 71AAB of the Act, no penalty can be levied against the assessee. Therefore, we uphold the order of the Ld. CIT(A) on the aforesaid reasoning rendered by us. 12. For the reasons set out above I therefore find sufficient merit in the contention of the Ld. AR that the entries with reference to sum of ₹ 1,99,54,112/- was found in a regular document maintained in normal course of business and in that view of the matter the 'Sum of Rs.l,99,54,l12/- does not come within the meaning of undisclosed income as mentioned in Section 271AAB of the Act. The penalty of ₹ 59,86,234/- levied by the Ld. AO u/s 271AAB is hence cancelled. 13. Since I have held that the penalty of ₹ 59,86,234/- was not leviable upon the appellant on the merits of the case, I do not deem fit to adjudicate the other alternate contentions raised by the appellant concerning validity of notice issued by the Ld. AO etc., since these contentions are now of only academic interest and hence not adjudicated upon. In the result, the appeal of the appellant is allowed . 4. Mr. Singh reiterates the Revenue s pleadings that the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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