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TMI Blog2018 (10) TMI 1591X X X X Extracts X X X X X X X X Extracts X X X X ..... al of totality of facts of the case. The basic condition of additional income being offered on the basis of seized document during the course of search had not been fulfilled in the present case. We find support from the ratio laid down by the Delhi Bench of Tribunal in Mahavir Prasad Jaipuria Vs. ACIT [2017 (10) TMI 875 - ITAT DELHI] wherein it was held that where the amount was not surrendered at the time of search but was surrendered subsequently during course of assessment proceedings; as per specific provisions of section 271AAA of the Act, said amount did not specifically fall under definition of ‘undisclosed income’ found during course of search, thus, levy of penalty was not justified. - Decided in favour of assessee. - ITA No.741/PUN/2016 And ITA No.748/PUN/2016 - - - Dated:- 25-10-2018 - MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM For The Appellant : Shri Kishore Phadke For The Respondent : Shri Rajesh Gawli ORDER PER SUSHMA CHOWLA, JM: Both the appeals filed by related assessee are against separate orders of CIT(A)-12, Pune both dated 18.01.2016 relating to assessment year 2012-13 against penalty levied under section 271AAA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which the income was derived as the income related to firm which was only doing business activities. The Assessing Officer referred to provisions of section 271AAA of the Act and observed as under:- 06. During the year under consideration, while filing the return of income in response to notice u/s 142(1) assessee has disclosed additional income of ₹ 20,00,000/- on account of additional stock and accordingly the income is declared at ₹ 45,62,534/-. Since, the additional income of ₹ 20,00,000/- is declared by the assessee as result of search action penal proceedings u/s 271AAA are separately initiated. 6. The Assessing Officer thus, levied penalty of ₹ 2 lakhs @ 10% of undisclosed income of ₹ 20 lakhs, under section 271AAA of the Act. 7. The CIT(A) has upheld the levy of penalty rejecting the contention of assessee that additional income was on account of under-valuation of stock and there were no changes in purchases, hence no merit in levy of penalty. The CIT(A) upheld the order of Assessing Officer on the ground that assessee had failed to furnish details as to the source of earning such additional income. The CIT(A) also noted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivity is being carried on by the assessee, hence even otherwise, there was no merit in levy of penalty under section 271AAA of the Act. 10. The learned Departmental Representative for the Revenue on the other hand, referred to para 6 of assessment order, wherein the Assessing Officer has discussed addition on account of additional income offered and then, he referred to para 8 of order imposing penalty under section 271AAA of the Act. He stressed that observations in the said orders were that the assessee declared additional income during search and it cannot be said that it was not found during the course of search. He placed reliance on the ratio laid down by the Hon ble High Court of Delhi in Pr.CIT Vs. Smt. Ritu Singal in ITA No.672/2016, judgment dated 12.03.2018 and he stressed that where the assessee has not substantiated the manner in which additional income was earned, then there is no immunity from levy of penalty under section 271AAA of the Act. 11. The learned Authorized Representative for the assessee in rejoinder stated that additional income though related to the year of search but during the course of search noting was found from the premises of assessee, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t been disclosed to the Chief Commissioner 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. . 13. Main section provides that where search has been initiated under section 132 of the Act on or after 1st day of June, 2007 but before 1st day of July, 2012 and then the assessee as per order of Assessing Officer, shall pay by way of penalty, in addition to tax, if any, payable by him, a sum computed at the rate of 10% of undisclosed inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en fulfilled in the present case. In this regard, we find support from the ratio laid down by the Delhi Bench of Tribunal in Mahavir Prasad Jaipuria Vs. ACIT (2017) 167 ITD 253 (Delhi Trib.), wherein it was held that where the amount was not surrendered at the time of search but was surrendered subsequently during course of assessment proceedings; as per specific provisions of section 271AAA of the Act, said amount did not specifically fall under definition of undisclosed income found during course of search, thus, levy of penalty was not justified. 15. The learned Departmental Representative for the Revenue has placed reliance on the ratio laid down by the Hon ble High Court of Delhi in Pr.CIT Vs. Smt. Ritu Singal (supra), wherein the issue was decided on additional income offered during course of search and penalty proceedings were initiated under section 271AAA of the Act in respect of such undisclosed income found during course of search and declared by assessee in the return of income. The facts of the said case are at variance and are not applicable to the facts of present case. Hence, reliance placed upon by the learned Departmental Representative for the Revenue is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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