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TMI Blog2019 (8) TMI 1267X X X X Extracts X X X X X X X X Extracts X X X X ..... 6/Chd/2018 And ITA No.1237/Chd/2018 - - - Dated:- 26-8-2019 - Smt. Diva Singh, Judicial Member And Smt. Annapurna Gupta, Accountant Member For the Assessee : Shri Ashwani Kumar, CA For the Revenue : Shri Hemant Gupta, Sr.DR ORDER PER BENCH: All the above appeals have been preferred by different assessees against the separate orders of the Commissioner of Income Tax (Appeals), Patiala [(in short CIT(A) ] dated 28.5.2018, 28.5.2018,10.8.2018 and 28.5.2018, passed u/s 250(6) of the Income Tax Act, 1961 (hereinafter referred to as Act ), relating to assessment years 2016-17, 2016-17, 2015-16 and 2016-17 respectively. 2. It was the common ground that the issue involved in all the appeals was identical, arising from identical facts and circumstances. Therefore, these were heard together and are being disposed off by this common consolidated order. It was pointed out that the issue involved in all the appeals related to levy of penalty u/s 271AAB of the Act on the income surrendered consequent to search action carried out on Maharaja Group of cases to which all the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... At the outset itself, the Ld.Counsel for the assessee pointed out that the matter relating to levy of penalty u/s 271AAB of the Act in the case of other assessees of the group, had travelled to the I.T.A.T., who had deleted the same vide their order in ITA No.1238 to 1242/Chd/2018 dated 12.7.2019. It was pointed out that the I.T.A.T. had adjudicated the issue in the case of other assessees in the group, being Smt.Rama Rani, Smt.Veena Rani, Shri Sukhdarshan Kumar and M/s R.D.Palace Pvt. Ltd. vide the aforesaid order. Copy of the order was placed before us and our attention was drawn to the findings of the I.T.A.T. at pages 23 to 26 of the order as under: 9. From the perusal of the above decision, it can be noticed that the Tribunal has categorically held that if no incriminating material is found during the search action and the surrendered income does not fall in the definition of undisclosed income as defined u/s 271AAB of the Act, the penalty is not warranted. The Coordinate Bench of the Tribunal has also discussed the proposition of law laid down by the Hon'ble Allahabad High Court in the Principal CIT vs Sandeep Chandak and Ors. (supra) and has held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found during search action i.e. ₹ 1.33 crores, the 10% of which comes to ₹ 13.30 lacs, hence, the penalty in the case of Mrs. Rama Rani is restricted to ₹ 13.30 lacs as against ₹ 20 lacs imposed by the Assessing Officer. 12. Similarly, in the case of Mrs. Veena Rani (ITA No. 1238/Chd/2018) for assessment year 2016-17, the total income surrendered was of ₹ 1.90 crores, whereas, the jewellery found during search action was of the value of ₹ 54.23 lacs and silver found of ₹ 8.40 lac. Hence, the penalty leviable on the aforesaid gross amount of 6.263 lacs ( ₹ 54.23 lcs + ₹ 8.40 lacs), which is calculated @ 10% at ₹ 6.263 lacs. Hence, the penalty is calculated and restricted to ₹ 6.263 lacs in this case. 13. In the case of Sudkharan Kumar in ITA No. 1239/Chd/2018 for the assessment year 2016-17, neither any incriminating material nor valued property was found, hence, no penalty in this case under the provisions of section 271AAB (1)(a) of the Act is exigible. The penalty in this case is ordered to be deleted. 14. Now coming to the cases of M/s R.D. Palace Pvt. Ltd, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 2 Silver 0 0 0 3 Wrist Watches 3.42 1.75 0 4 Income declared 71.58 78.25 150 Total 75 80 150 7. The Ld.Counsel for the assessee contended, therefore, that the issue being identical to that in the appeals decided by the I.T.A.T. as aforestated. It was squarely covered by the said decision. 8. The Ld. DR at this juncture rebutted by pointing that the contention of the Ld.Counsel for the assessee that no incriminating material was found for the surrender made on account of Income declared was incorrect. He drew our attention to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions routed through the banking channel? Ans. No sir,l I think these are the transactions related to prof its earned in cash f rom sale and purchase of properties, commodities, bullion etc. Q.21. Do you mean to say that the transactions recorded in the diary annexed as annexure AA-5 are unrecorded transactions and is the undisclosed income of your s and your f amily members? Ans. Yes Sir. Q.22. Please explain the modus operandi of how you and your f amily members have earned these prof its? Ans. Sir, generally there is not a set pattern as such. Sometimes with the help of some known persons, friends we get to know of some good property deals wherein the seller of the properties are in dire need of f unds and are ready to sell the property at much below the real market price. In those cases without getting the properties ac tually registered in our names, we do make f urther sales by getting cash prof its on these transactions without routing them through our regular books of accounts. These prof its are further reinvested to earn prof its on other property transactions, commodity transact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 Rama Rani 190.16 3 Rajat Jain 71.62 4 Vani Jain 81.24 5 Deepak Kumar 70.42 6 Veena Rani 176.84 7 Gaurav Jain 7 6.17 8 Shweta Jain 84.40 9 Saurav Jain 75.35 10 Niti Jain 78.50 Further, your companies/firms have not recorded certain transactions in its regular books o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 Vani Jain - 90 8 Deepak Kumar - 75 9 Veena Rani - 190 10 Gaurav Jain - 80 11 Shweta Jain - 90 12 Saurav Jain - 80 13 Niti Jain 85 Total 300 1400 The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before us. The issue before us relates to levy of penalty u/s 271AAB of the Act. 12. As per section 271AAB, penalty is levied on the undisclosed income found during search and the quantum of penalty varies from 10% to 30% of the undisclosed income, depending upon fulfillment of certain conditions by the assessee as specified in the section. The term undisclosed income has been defined in the Explanation to section 271AAB of the Act, as under: 271AAB (c) undisclosed income means---- (i) Any income of the specif ied 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 f ound in the course of search under section 132, which has------ (A) Not been recorded on or bef ore the date of search in the books of account or other documents maintained in the normal course relating to such previous year; or (B) other wise not been disclosed to the [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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