TMI Blog2022 (3) TMI 1076X X X X Extracts X X X X X X X X Extracts X X X X ..... ribed therein the definition of un-disclosed income u/s 271AAA of the Act. It is noted that based on the bald statement of Shri Bubna ₹ 3.78 cr. (out of ₹ 34 cr.) was admitted which includes ₹ 40 Lakhs. Since ₹ 40 lakhs cannot be attributed to any money, bullion, jewellery, article or transaction or entry or documents which has not been recorded in the books for the previous year (AY 2012-13) when searched on 29.05.2012, the same cannot fall in the ken of the definition of undisclosed income for the purpose of levying penalty u/s. 271AAA - Having taking note that the amount has been brought to tax by the AO though not shown by the assessee in the Return of Income, the penalty u/s. 271 AAA of the Act cannot be legally sustained. - Decided in favour of assessee. - I.T.A. No. 431/Kol/2021 - - - Dated:- 23-3-2022 - Shri A. T. Varkey, JM And Shri Manish Borad, AM For the Appellant : Shri Akkal Dudhwewala, FCA For the Respondent : Shri Biswanath Das, Addl. CIT ORDER PER SHRI A. T. VARKEY, JM: This is an appeal preferred by the assessee against the order of Ld. CIT(A), Kolkata-21 dated 24.09.2021 for AY 2012-13. 2. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essed a total income at ₹ 4,05,73,450/- by order dated 30.03.2015 which included ₹ 40,00,000/- (conditional disclosure). 5. Thereafter, pursuant to the notice of the AO regarding penalty proposed to be levied u/s. 271AAA of the Act, the assessee brought to his notice that the assessee had offered additional income (commodity loss and saree loss) to the tune of ₹ 3.38 cr. and thus have satisfied the condition as stipulated in clause (i) to sub-section 2 of section 271AAA of the Act, since the assessee had admitted the undisclosed income in the course of search u/s. 132(4) of the Act and has also stated the manner how such undisclosed income was earned (i.e. by booking false commodity and saree loss). It was also brought to the notice of the AO that condition under clause (ii) of section 271AAA(2) of the Act was satisfied since in its disclosure petition it was stated that the seized documents as referred to in the working of undisclosed income explains the manner in which the undisclosed income was derived which forms part of the disclosure petition. And the condition under clause (iii) of section 271AAA(2) of the Act also stand satisfied because the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lated u/s. 271AAA(2) of the Act and since the fact remains that assessee has paid the entire amount of tax along with interest so it was contended that no penalty under sub-section (1) of section 271AAA of the Act was warranted. However, the AO did not agree and levied penalty @ 10% of the total amount of the entire undisclosed income of ₹ 3,78,57,991/- which comes to ₹ 37,85,799/-. On appeal, the Ld. CIT(A) has taken note of the fact that during the search operation Shri Keshaw Kumar Bubna the key person of the assessee company in his statement recorded u/s. 132(4) of the Act has disclosed the additional income of ₹ 3,78,57,991/- for AY 2012-13 and accordingly, the assessee filed its return of income showing ₹ 3,63,19,410/- u/s. 153A of the Act (as noted by AO in the assessment order dated 30.03.2015). The Ld. CIT(A) has found that AO while completing the assessment u/s. 153A/143(3) of the Act on 30.03.2015 had accepted the returned income after making, inter alia, the addition of ₹ 40 lacs on account of discrepancies, technical adjustment and miscellaneous income which was offered during search and through the disclosure petition but not included in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 or Chief Commissioner or Principal or Commissioner before the date of the 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 be false and would not have been found to be so had the search not been conducted; (b) specified previous year means the previous year- (i) which has ended before the date of search, but the date of filing the return of income under sub-section (1) of section 139 for such year has not expired before the date of search and the assessee has not furnished the return of income for the previous year before the said date; or (ii) in which search was conducted. 8. From a bare reading of the afores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... falsely claimed, so it was offered as additional income to the tune of ₹ 3,38,57,991/-; and to be on the safe side and out of caution in its disclosure petition had offered the deficit/difference of ₹ 40 lacs (₹ 3.78 cr. ₹ 3.38 cr.) on account of any discrepancy, technical adjustment and miscellaneous income. We note that the AO has noted in the assessment order dated 30.03.2015 that the assessee had filed its return of income pursuant to notice u/s. 153A of the Act reflecting ₹ 3,63,19,410/- and the balance amount as admitted during search [₹ 3,78,57,991/- (admission/disclosure petition) ₹ 3,38,57,991/-] to the tune of ₹ 40 lacs was also included in the assessment order passed by AO on 30.03.2015. this fact the Ld. CIT(A) has taken note of which according to him satisfies condition (i) and (ii) under sub-section (2) of section 271AAA of the Act in respect of ₹ 3,38,57,991/-. And according to Ld. CIT(A), the other condition in clause (iii) also stands satisfied and so the AO erred in levying penalty u/s. 271AAA of the Act for the entire amount of ₹ 3.,78 cr. when assessee has satisfied the condition in respect of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etition and had given details of the undisclosed income, wherein assessee had offered ₹ 2,06,99,150/- which was falsely shown by assessee as loss on account of commodity business (BSL/06) and ₹ 1,31,58,841/- (which was falsely shown by assessee as loss from business of sarees BSL/05), which totals ₹ 3,38,57,991/-. This amount qualifies as undisclosed income since by discovery of seized documents BSL-5 6 it revealed that assessee have falsely claimed loss from these two transactions this amount, so it qualifies as undisclosed income i.e. ₹ 3.38 cr.. However, the question is what about the deficit/difference of ₹ 40 lakhs which has been offered by assessee Shri Bubna on behalf of assessee of ₹ 3.78 cr (out of ₹ 34 cr.) which assessee has not shown in its return pursuant to notice u/s. 153A of the Act. In this regard, it is noted that assessee in its disclosure petition has conditionally offered ₹ 40 lakhs to cover any other undisclosed income which has been unearthed during search. This action of assessee was out of abundant caution and conditional (provided there is material suggesting any undisclosed income un-earthed during sea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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