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TMI Blog2023 (9) TMI 1160X X X X Extracts X X X X X X X X Extracts X X X X ..... ting total income of Rs. 1,70,72,540/-. 3. Learned Assessing Officer completed assessment under section 143(3) of the Act by assessing the total income of assessee at Rs. 1,84,16,540/-. During the assessment proceedings, the learned Assessing Officer did not assign any incriminating material to the undisclosed income. The assessee also did not capitalize this income in the books, but merely paid taxes. 4. Subsequently, learned Assessing Officer initiated penalty proceedings under section 271AAB of the Act on account of additional income of Rs. 1 crore admitted by the assessee and by order dated 26/03/2022, levied a penalty of Rs. 60 lakhs under section 271AAB of the Act. 5. In appeal, assessee contended before the learned CIT(A) that no incriminating material was found during the search and the additional income was admitted to buy peace and to avoid litigation and the same is not a tangible income as the said income has not been credited in its books nor has come out of any incriminating evidence seized during the course of search. It was further contended that the assessee has not taken any entry of the undisclosed income in his books nor the same is corroborated by any increa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... betting business and the additional income disclosed by the assessee under section 132(4) of the Act is covered by the definition of "undisclosed income" as per clause (c) of explanation to section 271AAB of the Act when such income was admitted on the basis of noting contained in the season scribbling pad and other unrecorded items of income. 8. Learned DR placed reliance on the decision reported in the case of PCIT vs. Sandeep Chandok (2018) 93 taxman.com 405 (Allahabad) against which the SLP was dismissed by the Hon'ble Apex Court, Kermex Micro Systems (India) Ltd vs. DCIT (2014) 47 taxmann.com 375 (Andhra Pradesh) and Union of India vs. Dharamendra Textile Processors (2008) 174 Taxman 571 (SC). 9. Per contra, learned AR submitted that the alleged noting on the scribbling pad, extracted by the learned CIT(A) at page No. 18 of the impugned order is not at all referred to by the learned Assessing Officer to make any addition nor does the penalty order makes any reference to the same and, therefore, the Revenue cannot say that the said noting on a paper is incriminatory in nature. Further according to him, as a matter of fact, learned CIT(A) admitted to this fact and observed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nged and the Hon'ble High Court held that when the ground do not reveal that the assessee retracted the admission, no deletion of addition can take place merely on the basis of the arguments of the lawyer. It is also not so in the case on hand. The decision reported in the case of Union of India vs. Dharamendra Textile Processors (supra) has also no relevance to the facts of the case, since it relates to the caution whether "mens rea" is an essential ingredient for levying penalty. 13. In this case, the learned CIT(A), as a matter of fact, found that the alleged noting on a scribbling paper has not been connected to the addition of Rs. 1 crore and even the said noting only records a loss, but not any investment or otherwise. The basis for initiation of the penalty proceedings is the inclusion of Rs. 1 crore by the assessee in the computation of total income (income offered to tax to cover up deficiency, if any) as stated in the course of search. Answer to Question No. 8 in the statement recorded on 15/04/2019, assessee stated that to cover up all the deficiencies in the books of account of his business, he voluntarily admits additional income of Rs. 1 crore over and above his regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT (supra), while considering similar facts to the facts of the case on hand, a Co-ordinate Bench of the Tribunal while following the decision in the case of Ravi Mathur vs. Dy.CIT (supra) held that unless and until the income so disclosed by the assessee falls in the definition of 'un-disclosed income' defined in explanation to section 271AAB of the Act, mere disclosure of additional income in the statement recorded under section 132(4) of the Act itself is not sufficient to levy penalty. 16. Under clause (c) of explanation to section 271AAB of the Act, the un-disclosed income is defined as any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewelry or other valuable article or thing or any entry in the books of account or other document or a transaction found in the course of search under section 132 of the Act, which has 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 otherwise not been disclosed to the principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner before the date of sear ..... X X X X Extracts X X X X X X X X Extracts X X X X
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