9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (9) TMI 425 - AT - Income TaxPenalty u/s 271AAB - unexplained cash commission expenses u/s 69C - treatment to additional income disclosed by the assessee in the return of income - incriminating material found during the course of search or not? - HELD THAT - CIT(A) observed that the AO did not bring on record any seized material found during the search to substantiate his finding that assessee had taken bogus LTCG and unexplained cash transactions. We are in agreement with the CIT (A) that the additional income disclosed by the assessee in the return of income should be corroborated with the incriminating material found during the search . AO has not linked the additional income disclosed by the assessee with the materials found during search. As per the record, we observed that assessee has disclosed the additional income without there being any incriminating material found during search. It is a fact on record that assessee has disclosed additional income after search proceedings. In order to impose penalty u/s 271AAB, the onus is on the part of the AO to bring on record that the additional income disclosed by the assessee is having direct link with the incriminating material found during search. In absence of the same, the penalty cannot be levied u/s 271AAB - After considering the detailed findings of the ld. CIT (A), we do not see any reason to disturb the same. Accordingly, grounds raised by the Revenue are dismissed.
Issues:
Assessment of undisclosed income under section 271AAB of the Income-tax Act, 1961 for Assessment Year 2021-22. Detailed Analysis: Issue 1: Assessment of undisclosed income The appeal was filed by the Revenue against the order of the Commissioner of Income Tax (Appeals) concerning the assessment of undisclosed income for the Assessment Year 2021-22. The assessment proceedings were initiated under section 153A of the Act after a search was conducted at the premises of Hans Group. The return of income was filed by the assessee declaring income of Rs. 6,54,15,120/-. The assessment was completed under section 143(3) of the Act, adding Rs. 2,27,000/- on account of unexplained cash commission expenses under section 69C of the Act. Issue 2: Penalty proceedings under section 271AAB In penalty proceedings under section 271AAB, the Assessing Officer (AO) imposed a penalty of Rs. 24,53,100/-, later rectified to Rs. 1,64,03,339/-, based on the alleged undisclosed income. The AO claimed that the assessee had taken bogus Long Term Capital Gains (LTCG) and undisclosed cash transactions, which were declared only after the search action under section 132 of the Act. The AO imposed the penalty at 30% of the undisclosed income, alleging that the assessee would not have disclosed the income if the search had not taken place. Issue 3: Appeal before the CIT (A) The assessee appealed before the Commissioner of Income Tax (Appeals) and submitted detailed arguments challenging the penalty imposed under section 271AAB. The CIT (A) deleted the penalty, stating that the additional income declared by the assessee did not fall under the definition of undisclosed income as per section 271AAB. The CIT (A) noted that the AO failed to provide any seized material to substantiate the claim of bogus LTCG and unexplained cash transactions. The CIT (A) emphasized that the onus was on the AO to establish a direct link between the undisclosed income and the incriminating material found during the search. Issue 4: Appellate Tribunal's decision The Revenue appealed before the Appellate Tribunal challenging the CIT (A)'s decision to delete the penalty under section 271AAB. The Tribunal observed that the income declared by the assessee did not have a direct link with any incriminating material found during the search. The Tribunal agreed with the CIT (A) that the penalty cannot be imposed under section 271AAB without evidence linking the undisclosed income to the search findings. The Tribunal dismissed the Revenue's appeal, upholding the CIT (A)'s decision to delete the penalty. In conclusion, the Appellate Tribunal upheld the decision of the Commissioner of Income Tax (Appeals) to delete the penalty imposed under section 271AAB, emphasizing the lack of evidence linking the undisclosed income to the search findings.
|
