9911796707
TMI Blog2019 (5) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... said conditions admittedly stood fulfilled in the case of surrender made on account of documents found and capital introduced in the firm, as per the CIT(A). The cash was also part of the same surrender and no distinction has been brought out of the same with the rest of the surrender made. We therefore hold that there was no basis for upholding the levy of penalty on the cash surrendered and the same is therefore directed to be deleted. The appeal filed by the assessee is, therefore, allowed. - Decided in favour of assessee. - ITA No.1555/Chd/2017 - - - Dated:- 6-5-2019 - Shri Sanjay Garg, Judicial Member And Dr. B.R.R. Kumar, Accountant Member For the Assessee : Shri Sudhir Sehgal, Adv For the Revenue : Shri Manjit Singh, Sr. DR. ORDER PER SANJAY GARG, JUDICIAL MEMBER : The present appeal has been preferred by the assessee against the order of the Commissioner of Income Tax (Appeals)-3, Gurgaon (in short CIT(A) dated 29.8.2017, upholding the penalty levied u/s 271AAA of the Income Tax Act, 1961 (in short Act ). 2. The issue involved in this appeal relates to levy of pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant. The perusal of the provisions of the section 271AAA make it clear that the penalty can be levied on undisclosed income of the specified year if the conditions specified in the 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 Explanation to section 271AAA. However, the AO has imposed the penalty on the ground that the appellant had not substantiated the manner in which the income was earned. 5.1 The AO has made following observations in this case: (i) The assessee made a surrender of ₹ 38,87,5007- for the year under consideration. (ii) This disclosure was declared in the return of income. (iii) The assessee failed to substantiate the manner in which the income has been earned. (iv) In view of the same, penalty u/s 271AAA was imposed. 5.2 The appellant during the appellate proceedings has submitted as follows:- (i) The appellant admitted the undisclosed income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n CIT vs Mahendra C. Shah [2008] 215 CTR 493 (Guj). It was held the assessee having declared the value of diamonds in his statement under section 132(4) and paid taxes thereon before assessment was entitle to immunity from penalty under section 271(l)(c) under Explanation 5 thereof even though the statement did not specify the manner in which the income representing value of diamonds in his statement under section 132(4) and paid taxes thereon before assessment was entitled to immunity from penalty under section 271(l)(c) under Explanation 5 thereof even though the statement did not specify the manner in which the income representing value of diamonds was derived. With respect to such requirement in relation to section 271AAA, it has been held in the case of Pramod Kumar Jain v. Dy. CIT (2013) 33 Taxmann.com 651 (Ctk) that the disclosure of income under section 132(4) during the course of search having been made and the assessee having surrendered certain income for the relevant assessment years in the statements during the course of search and filed returns declaring the same pursuant to notice under section 153A and which returns have been accepted by the AO, levy of penalty unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdictional High Court in the case of Kim Pharma (P) Ltd vs CIT (P H) [2013) 258 CTR 458 that where amount surrendered during survey was not reflected in books of accounts and no source from where it was derived was declared by the assessee, it was assessable as deemed income of assessee u/s 69A and not business income. In view of the above referred judgement, cash found is held as unexplained as no from which it is derived. Thus, with regard to the same, it is held that the appellant has not specified and substantiated the manner of earning income during the course of search and hence Penalty u/s 271AAA of the Act is leviable on this amount. Similarly, the appellant has also not specified and substantiated the manner of earning income invested in jewellery amounting ₹ 7,50,000/- nor was the disclosure of the same made by the appellant in statement u/s 132(4) of the Act, during the course of search. In view of the same, penalty u/s 271AAA is leviable on this amount also. In view of the above discussion, penalty u/s 271AAA amounting to ₹ 1,85,000/- related to surrender related to cash and jewellery amounting to ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. We have considered the rival contentions and have also gone through the order of the CIT(A). A similar issue had come up before the ITAT Chandigarh Bench in the cases of Shri Ashok Jindal Vs. DCIT Others in ITA No.1556/Chd/2017 Shri Amit Jindal Vs. DCIT in ITA No.1557/Chd/2017 (Jindal Group of cases), dated 15.10.2018 and the Tribunal vide consolidated order allowed the appeal of the assessees. The relevant findings of the Tribunal in para 9 are reproduced as under: 9. We have considered the rival contentions and have also gone through the order of the CIT(A).Undisputedly the entire surrender made by the assessee on account of capital introduced in firms, documents found and cash , amounting in all to ₹ 54,87,500/- was accepted and assessed to tax by the Revenue. All taxes thereon had been paid. Admittedly, no portion of the surrender had been assessed separately under any other head. Therefore the decision of the ITAT in the case of Sanjeev Goyal (supra) applied to the entire surrender made, and the CIT(A), we hold had wrongly segregated the surrender made on account of cash by stating that the same was assessable u/s 69A ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
