TMI Blog2020 (8) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... 013-14) - - - Dated:- 1-6-2020 - SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER Appellant by: Smt. Urvashi Shodhan, A.R. Respondent by: Shri Dileep Kumar, Sr. D.R. ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER 1. These appeals filed by the Assessee are directed against the order of the Ld. CIT(A)-12, Ahmedabad dated 06.12.2016 pertaining to A.Y. 2012-13 2013-14. 2. The assessee has raised following grounds of appeal: 1. Ld. CIT (A) erred in law and on facts confirming penalty levied by AO of ₹ 38,20,160/- invoking provisions of section 271AAB of the Act. Ld. CIT (A) erred in ignoring that the appellant already offered income disclosed at the time of search along with due payment of taxes. 2. Ld. CIT (A)erred in law and on facts confirming penalty under newly, introduced provisions of section 271AAB not granting immunity from penalty when income returned stood accepted by AO in order u/s 153 A r w s 143 (3) of the Act without any adjustment or addition. 3. Ld. CIT (A) erred in law and on facts in holding income shown in return as 'undisclosed income' liable to penalty ignoring that income is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n stated by the appellant that the income offered in the returns of income is not undisclosed income as defined in Explanation (c) below section 271AAB, the same is not even attempted to be so established or substantiated either before the AO or even before me. The fact that the appellant made disclosure u/s 132(4) and also further owned up such incomes in return of income filed u/s 153A would prima facie lead to a reasonable presumption, though rebuttable, that such disclosure is based on, and is a consequence of, incriminating material unearthed during the course of search, because, readiness for gratuitous and unwarranted payment of taxes is not only unnatural or unheard of, but is also contradictory to normal human behaviour. It was therefore incumbent on the appellant to have demonstrated and substantiated before the AO (or at least before me) that income shown in the return is not undisclosed income within the meaning of section 271AAB r.w. Explanation (c). This not having been done by the appellant, the AO was justified in prima facie concluding that the disclosure u/s 132(4) is not lump sum but is based on seized assets/documents. My perusal of the statement of Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admitted in the statement furnished under section 132(4) of the Act, to buy the peace of mind. Therefore there cannot be any penalty under section 271AAB of the Act. 11. On the contrary, the learned DR submitted that the disclosure was made by the assessee on the basis of the materials found during the course of search. This fact has also been admitted by the learned CIT (A). The learned DR vehemently supported the order of the authorities below. 12. We have heard the rival contentions of both the parties and perused the materials available on record. We note that the explanation(c) to section 271AAB of the Act, has a direct bearing on the issue on hand which reads as under: Penalty where search has been initiated. 271AAB. (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 49[but before the date on which the Taxation Laws (Second Amendment) Bill, 2016 receives the assent of the President50], the assessee shall pay by way of penalty, in addition to tax, if any, payable by him,- XXXXXXXXXXXXXXXXXXXXX ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of section 271AAB of the Act. 16. In holding so we draw support and guidance from the order of the VisakhapatnamTribunal in the case of ACIT Vs. Marvel Associates reported in 170 ITD 353 wherein it was held as under: 9. Penalty u/s 271AAB attracts on undisclosed income but not on admission made by the assessee u/s 132(4). The AO must establish that there is undisclosed income on the basis of incriminating material. In the instant case a loose sheet was found according to the A.O., it was incriminating material evidencing the undisclosed income. In the penalty order the AO observed that loose sheet shows the cost per square feet is ₹ 3571/- per sft. and assessee stated to have submitted in sworn statement cost per sq. feet at ₹ 2200/- to ₹ 2300/- per sq. feet. However neither the AO nor the Ld.CIT(A) has verified the cost of construction with the books and projections found at the time of search. The counsel argued that it was mere projection but not the actuals. The write up heading also mentioned that summary of the projected profitability statement. There is no evidence to establish that projections reflected in the loose sheet is real. No other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the lower authorities and cancel the penalty u/s 271AAB of the Act. 17. We are also conscious to the fact that the impugned penalty was deleted in the case of other assessee who were part of the group and subject to the same search vis-a-vis involving identical facts and circumstances. The details of such cases have already been filed by the assessee which are available on record. The details of the same stands as under: i. Mukesh D. Manglani others Vs. ACIT in 591/AHD/2018 vide order dated 18-12- 2019 ii. Guruprasad infrastructure private Ltd vs. DCIT in ITA numbers 1658- 1659/AHD/2017 vide order dated 19 July 2019. 18. In view of the above, we are not convinced with the penalty levied by the authorities below. Hence we set aside the order of the ld. CIT (A) and direct the AO to delete the penalty levied by him under section 271AAB of the Act. Hence the ground of appeal of the assessee is allowed. 19. In the result, the appeal of the assessee is allowed. 20. Coming to the IT(SS)A No. 147/Ahd/2017 for A.Y.; 2012-13 21. At the outset we note that the identical issue has been in the appeal of the assessee bearing ITA No. 146/AHD/2017 have been dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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