9911796707
TMI Blog2019 (6) TMI 1121X X X X Extracts X X X X X X X X Extracts X X X X ..... undisclosed income as per the definition of the same in section 271AAB of the Act. Moreover the issue is squarely covered by case of M/s SEL Textiles Limited [ 2019 (4) TMI 1719 - ITAT CHANDIGARH] wherein identical surrender made on account of the discrepancy in stock was held by the ITAT to qualify as undisclosed income liable to penalty u/s 271AAB of the Act. We uphold the order of the CI T(A) confirming the levy of penalty u/s 271AAB of the Act. - Decided against assessee - ITA No.1585/Chd/2018 - - - Dated:- 21-6-2019 - Shri Sanjay Garg, Judicial Member And Smt. Annapurna Gupta, Accountant Member For the Assessee : Shri Sudhir Sehgal, Adv. For the Revenue : Sh Manjit Singh, CIT DR ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER The present appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-5, Ludhiana [(in short CIT(A)] dated 22.10.2018, upholding the levy of penalty u/s 271AAB of the Income Tax Act, 1961 (hereinafter referred to as Act ). 2. Briefly stated a search u/s 132 was carried out at the premis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no penalty was leviable and that even otherwise penalty was not automatic. He, therefore, contended that no penalty was leviable in the present case. 4. The Ld.DR, on the other hand, heavily relied on the order of the Ld.CIT(A) and pointed out that the surrender was on account of discrepancy in stock as well as purchase/sale/issue/receipt/approval and other discrepancies as per various annexures prepared during the search. The income surrendered, therefore, represented undisclosed income as defined in the explanation to sub clause(c) below section 271AAB(3) of the Act, and, therefore, the Ld.CIT(A) had rightly confirmed the penalty levied. The Ld.DR drew our attention at page 5 of CIT(A) s order as under: As admitted by the AR also, the income of ₹ 2,83,00,000/- was surrendered during the search. As per the submissions of the assessee the surrender of ₹ 2,83,00,000/- has been made to cover up the discrepancies in stock as well as the purchase /sale/issue/receipt/approval and other discrepancies etc. as per various annexure prepared at the time of search. In this regard a general entry has been passed by crediting a disclosure of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Admittedly, the stock was found short during the search action. In fact, the Assessing officer apart from the above surrender of ₹ 39.99 lacs has made further addition of ₹ 2.58 cores on this issue. It is apparent that the aforesaid profit on short stock were not accounted for by the assessee but was only detected during the search action. However, the assessee has substantiated the manner of earning of the said income which include the surrender income of ₹ 39.99 lacs, hence, penalty @ 10% is leviable on the aforesaid amount as per the provisions of section 271AAB (l)(a) of the I.T. Act. 14. In view of this, the penalty in this case is restricted to 10% of the surrendered income of ₹ 39,99,158/- on account of stock found short as per the provisions of section 271AAB (l)(a) of the Act. However, the remaining part of the penalty is ordered to be deleted. 6. The Ld.DR, therefore, contended that the Ld.CI T(A) had rightly upheld the penalty levied in the present case. 7. We have heard the rival contentions, perused the orders of the authorities below and also gone through the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer may, notwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under section 132 on or after the 1st day of July, 2012, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him,- (a) a sum computed at the rate of ten per cent of the undisclosed income of the specified previous year, if such assessee- (i) in the course of the search, in a statement under subsection (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been derived; (ii) substantiates the manner in which the undisclosed income was derived; and (iii) on or before the specified date- (A) pays the tax, together with interest, if any, in respect of the undisclosed income; and (B) furnishes the return of income for the specified previous year declaring such undisclosed income therein; b) a sum computed at the rate of twenty per cent of the undisclosed income of the specified previous year, if such assessee--- (i) in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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