TMI Blog2022 (9) TMI 1316X X X X Extracts X X X X X X X X Extracts X X X X ..... usted with the seized amount of cash and the remaining amount was returned to the assessee. We find ourselves convinced with the conspectus of above factual matrix and the submissions made by the assessee and accordingly have no hesitation in directing the AO to delete the penalty imposed under section 271AAA of the Act in the sum - Accordingly, grounds raised by the assessee are allowed. - I.T.A. No. 1504/Kol/2017 - - - Dated:- 26-9-2022 - Shri Sonjoy Sarma, Hon ble Judicial Member And Shri Girish Agrawal, Hon ble Accountant Member For the Assessee : Shri K. K. Goshwami, Advocate Shri Shubhankar Ghosh, CA For the Respondent : Shri G. J. Sema, Addl. CIT ORDER PER SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER: Present appeal by the assessee is against the order of Commissioner of Income-tax (Appeals) -22, Kolkata vide appeal no. 126/CIT(A)-22/11-12/14-15/Kol dated 29.04.2017 which is against the penalty order dated 30.09.2013 u/s 271AAA of the Income-tax Act, 1961 (hereinafter referred to as the Act ) passed by DDIT (Int l Taxation) 1(1), Kolkata. 2. Grounds of appeal taken by the assessee are reproduced as under:- 1. For that on the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was inventorized at ₹ 51.19 lakhs and 20,000. Out of these said cash found, an amount of ₹ 49 lakhs and 20,000 were seized and the balance amount of ₹ 2.19 lakhs was returned to the assessee. Foreign currency of 20,000 was handed over to the Assistant Director, Directorate of Enforcement, Kolkata. In the assessment order, at para 3, ld. AO noted in respect of statement recorded of the assessee wherein it was stated that he was coming from Phagwara, Punjab, Dist. Jalandhar by flight number SG 212, Delhi to Kolkata and that he was carrying roughly ₹ 51.50 lakhs and 20,000 which was the sale proceeds of ancestral land at Phagwara, Punjab. Ld. AO also noted from the statement of the assessee that the said cash amounts were handed over by the property dealer, Avtar Singh (Babbu) of Chahal Nagar, Phagwara Dist. Jalandhar, Punjab, India. Ld. AO also stated that an enquiry was made by the ADIT (Inv.), Jalandhar and a statement of Shri Avtar Singh was recorded on 27.01.2011. From the enquiry report of ADIT (Inv.), Jalandhar, ld. AO noted that assessee had sold land situated at Chahal Nagar, Phagwara measuring 18 marlas to Shri Mukesh Kumar @ ₹ 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 271AAA(2) of the Act by the assessee which the ld. AO and the ld. CIT(A) failed to take into consideration for the penalty imposed on the assessee. He referred to the provisions of section 271AAA of the Act which is reproduced as under: 271AAA. Penalty where search has been initiated.-(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 June, 2007, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him, a sum computed at the rate of ten per cent of the undisclosed income of the specified previous year. (2) Nothing contained in sub-section (1) shall apply if the assessee,- (i) in the course of the search, in a statement under sub-section (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been derived; (ii) substantiates the manner in which the undisclosed income was derived; and (iii) pays the tax, together with interest, if any, in respect of the undisclosed income. (3) No penalty under the provisions of clause (c) of sub-sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansaction of sale of land. Ld. Counsel pointed out that the amount of sale consideration was seized by the Department and therefore, the assessee has deemed to have paid the taxes as the seized amount was refunded after the deduction of applicable taxes and interest on the assessed income. Ld. Counsel stated that assessment was completed with a tax effect of ₹ 19.50 lakhs which was adjusted with the seized amount of cash and the remaining amount of ₹ 8,82,530/- was returned to the assessee for which order under section 154/251/143(3) of the Act was passed dated 14.12.2015. 12. The typed version of the statement recorded of the assessee and reproduced in the impugned order of penalty is extracted below for ease of reference:- Q-2) From where you are coming and how much cash are you carrying with you? I am coming from Phagwara, Punjab, Dist. Jalandhar by flight number SG 212, Delhi to Kolkata. I am carrying roughly ₹ 51.5 lakhs and 20,000. Q-3) During the course of search ₹ 51,19,000 has been found from the trolley bag being carried by you from Delhi to Kolkata and 20,000 has also been found. Please produce the evidence/documents in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see is a citizen of United Kingdom and a non-resident who had no income chargeable under the Act, other than the long-term capital gain reported in the income tax return for the year under consideration in respect of sale of his ancestral land situated at Chahal Nagar, Phagwara, Dist. Jalandhar, Punjab. It is also a fact that enquiry conducted by ADIT(Inv.), Jalandhar revealed the execution of impugned sale transaction of land which has been duly noted by the Ld. AO in the assessment order itself. The total income of the assessee in this respect has been assessed after the first appeal effect at ₹ 41,50,500/- on which penalty u/s 271AAA(1) of the Act has been imposed at the rate of 10%, amounting to ₹ 4,15,050/-. 16. From the perusal of the provisions of section 271AAA(2), we note that upon complying with the three conditions mentioned therein, penalty under section 271AAA(1) of the Act is not imposable. The first condition requires that the assessee admitsin the course of search in the statement recorded under section 132(4) of the Act, the undisclosed income and specifies the manner in which such income has been derived. The second condition requires that the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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