TMI Blog2019 (11) TMI 1606X X X X Extracts X X X X X X X X Extracts X X X X ..... with reference to which income 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 offered by the appellant not fall in the ambit of undisclosed income as defined in Sec. 271AAB. Thus sufficient merit in the contention of the Ld. AR that the entries with reference as 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. - Decided in favour of assessee. - ITA No.2280-2281/Kol/2018 - - - Dated:- 15-11-2019 - Shri S.S.Godara And Dr. A.L. Saini, JJ. Assessee: Shri Miraj D Shah, Advocate Respondent: Shri Baij Nath Singh, JCIT-DR ORDER S.S.Godara, J. Thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Ld. AO since the appellant failed to substantiate the manner in which the income was derived by him, he levied penalty @ 30% on the undisclosed income of ₹ 1,99,54,112/- under clause (c) of Section 271AAB of the Act. 2. In the appellate proceedings, the Ld. AR of the appellant assailed the impugned order of the Ld. AO on several grounds. It was submitted that the loose documents etc. found seized in the course of search constituted 'other documents' maintained the normal course of business and hence the entries contained therein did not represent his 'undisclosed income'. It was further submitted that no asset, jewellery, money, bullion or any other valuable asset was found corresponding to such income which further fortified that such income did not represent the appellant's undisclosed income. The Ld. AR further objected to the validity 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. Afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be false; 6. Undeniably the appellant's case is not covered by the above two limbs. Neither does the sum of ₹ 1,99,54,112/- represents any entry in respect of expense which is found to be false nor has this sum been assessed with reference to any document which is otherwise found to be false. 7. I further noted that sub-clause (i) of clause (c) of Explanation 1 to Section 271AAB, also has two limbs, which are as follows: a) any income represented by money bullion, jewellery or other valuable article or thing; or b) any entry in the books of account or other documents or transactions found in the course 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in normal course of business. 10. In the facts of the present case the Investigating Officers had found loose documents, which contained entries with regard to the commodity dealings of the appellant. The appellant is an individual, who derived income from other sources and other mise. income. The' appellant is required to maintain any books of account in terms of Section 44AA of the Act. In the relevant previous year the appellant had conducted non-systematic trades in commodities and therefore the income derived from such transactions was offered 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h document was retrieved during search, hence, the amount of ₹ 3 cr. offered by the assessee does not fall in the ken of undisclosed income defined in Sec. 271AAB of the Act. So, ₹ 3 cr. which was commodity profit recorded in the other document maintained by the assessee which was retrieved during search cannot be termed as undisclosed Income in the definition given u/s. 271AAB of the Act. Since ₹ 3 cr. cannot be termed as Undisclosed Income as per sec. 271AAB 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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