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TMI Blog2014 (3) TMI 1013X X X X Extracts X X X X X X X X Extracts X X X X ..... DICIAL MEMBER For the Petitioner : J.S. Nagar For the Respondent : Ashok Kumar Goyal ORDER T.R. Sood, Accountant Member These appeals are directed against the order dated 2.8.2013 of the Ld CIT(A)-I, Ludhiana. Issues are common in these appeals and the same were heard together and are being disposed off by this consolidated order. ITA No. 1003/Chd/2013 2. In this appeal the Revenue has raised the following grounds: 1 The Ld. CIT(A) has erred both in law and on facts while deleting the penalty of ₹ 38,01,250/- without appreciating the facts that the assessee has failed to substantiate the manner in which undisclosed income was derived so as to qualify for non-levy of penalty within the meaning of sub-section (2) of Sec 271AAA of the Act. 2 It is prayed that the order of the Ld. CIT(A) be set aside and that of the Assessing officer be restored. 3. After hearing both the parties we find that a search was conducted in the premises of the assessee wherein assessee surrendered a sum of ₹ 4 crore. This surrender was honoured and the assessee filed a return accordingly by including a sum of ₹ 4 crore and declared to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted the manner in respect of about ₹ 1987500 out of same surrender then why same manner has not been accepted in respect of rest of the matter, is not clear. He also relied on the following decisions: ACIT (OSD) v. Kanakia Spaces (P.) Ltd. [IT Appeal No. 6763 (Mum.) of 2011, dated 10-7-2013] Asstt. CIT v. A.N. Annamalaisamy (HUF) [2013] 38 taxmann.com 440 (Chennai). Pramod Kumar Jain v. Dy. CIT [2013] 33 taxmann.com 651 (Cuttack) Smt. Raj Rani Gupta v. Dy. CIT [IT Appeal No. 3371 (Delhi) of 2011, dated 30-3-2012] 8. We have gone through the rival submissions carefully. The Ld. CIT(A) has decided this issue vide para 5 which is as under: 'I have considered the basis of penalty imposed by the AO and the arguments of the AR on the issue. The perusal of the provisions of section 271AAA make it clear that the penalty can be levied on undisclosed income of the specified year if the conditions specified in sub-section (2) of section 271AAA are not satisfied. It, therefore, follows that first thing to determine is what is the amount of undisclosed income under the given circumstances. The concept of undisclosed income has been clearly defined by Explan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but under section 271(1)(c). It also means that initiation of penalty proceedings would depend upon the nature of the income assessed and there could be penalty proceedings u/s 271AAA as well as 271(1)(c) for the same assessment year, however in respect of different income. The AO in the penalty order has clearly accepted that disclosure of income by the assessee to the tune of ₹ 3,80,12,500/- is not represented by any assets/documents found during the course of search operation and has also observed that the same was part of the undisclosed income just because this disclosure had come during the course of search and was therefore as a result of the search. There is a clear acceptance of the fact that the said disclosure is not with reference to any assets/documents found during the course of search. It is only because the said disclosure happened during the search that the same has been clubbed in the definition of undisclosed income requiring the assessee to fulfil the condition as specified in sub-section (2) of 271AAA. I am of the clear view that income to the extent of ₹ 3,80,12,500/- does not come under the definition of undisclosed income as defined under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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-section (1) of section 271 shall be imposed upon the assessee in respect of the undisclosed income referred to in sub-section (1). (4) The provisions of sections 274 and 275 shall, so far as may be, apply in relation to the penalty referred to in this section. Explanation.-For the purposes of this section,- (a) undisclosed income means- (i) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other 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 Chief Commissioner or Commissioner before the date of search; or (ii) any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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