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TMI Blog2019 (12) TMI 688X X X X Extracts X X X X X X X X Extracts X X X X ..... e sale consideration accounted in the books of accounts. No evidence was brought on record by the revenue to show that the contention of the assessee was incorrect. In fact the revenue has accepted the submissions made by the assessee and completed the assessment on the disclosure made by the assessee. Therefore, we hold that the assessee has satisfied the conditions laid down u/s 271AAB for levying penalty @10% which the Ld.CIT(A) has upheld. Therefore, we do not find any reason to interfere with the order of the Ld.CIT(A) and the same is upheld. - Decided against revenue Penalty u/s 271AAB and 271F - assessee admitted the additional income of ₹ 2.00 crores for the assessment year which was accepted by the department and completed the assessment estimating the income @18% on gross contract receipts before depreciation - AR argued that the AO should have initiated penalty u/s 271(1)(c) - A.Y.2014-15 - HELD THAT:- Though in the earlier years, the assessee had admitted the additional income on the net consideration received, in the year under consideration the admission was only towards estimated profits for future period i.e. from 01.04.2013 to 31.04.2014. The AO also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings u/s 271AAB of the Act. During the course of search, the Investigation team found incriminating material in the form of a note in I-pod with regard to rate quoted by the assessee for sale of plots @₹ 4,600/- per square yard which was seized in the office and also in the residential premises of the partners / directors of the assessee firm. When the Income Tax department questioned the differences noticed in the seized material, Sri I.A.Raja Varma, Managing Partner of the assessee firm has given a statement on oath accepting to pay tax on the income in respect of the differences found during the course of search. Accordingly, the assessee filed a letter dated 21.05.2013 before the Asst.Director of Income Tax (Investigation) admitting the income of ₹ 11.65 crores as undisclosed income for the A.Y. 2008-09 to 2013-14. The assessee also admitted a sum of ₹ 2.00 crores as income for the financial year relating to A.Y.2014-15. The assessee further submitted in a letter that undisclosed income earned was stated to be utilized for payments made over and above the registered value of the lands purchased. The AO recorded the statement u/s 131 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipts estimated on certain market rate per sq.yd to the investigation team as reasonable. Since the income was declared on estimation basis taking into consideration of higher rates of sale price per square yard and the rates at which the income was offered was not supported by the incriminating material found during the course of search, the additional income admitted by the assessee does not come under the purview of undisclosed income as defined in sub section (ii) of section 271AAB of the Act, thus submitted that there is no case for concealment of income, hence requested to drop the penalty proceedings. The AO not being convinced with the explanation of the assessee viewed that the assessee has not admitted the income voluntarily and admitted the undisclosed income because of search and seizure action undertaken u/s 132 of the Act. The AO further held that the details of unaccounted sale consideration received outside the books of accounts would have never come to the notice of the Department had the Department not conducted the search action, hence viewed that the case clearly falls under undisclosed income as defined u/s 271AAB of the Act. 3. With regard to q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld.CIT(A). During the appeal hearing, the Ld.DR argued that search u/s 132 was conducted in the case of the assessee and during the course of search, incriminating material was found in the form of note on I-pod as per which, it was found that the quoted rate for sale of land was ₹ 4,600/- per sq.yd. On confronting the incriminating material found during the course of search, the assessee has admitted the additional income of ₹ 12.00 crores for the A.Y.2008-09 to 2013-14 and ₹ 2 crores for the A.Y. 2014-15 aggregating to ₹ 14 crores. Therefore, the Ld.DR argued that the assessee had admitted the additional income only after conducting the search and finding the material during the course of search. Had the search was not conducted in the instant case, the assessee would not have disclosed the undisclosed income and it would not have come to the notice of the department. Therefore, argued that it is a clear case of undisclosed income within the definition of 271AAB of the Act and concealment of income. Hence, argued that the Ld.CIT(A) has rightly held that the AO is justified in invoking the provisions of 271AAB of the Act. The Ld.DR further submitted that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f accounts, thus stated that having explained the manner in which the additional income was earned, the department did not bring any evidence to controvert the submission made by the assessee with regard to sale of plots. Therefore, argued that the Ld.CIT(A) has rightly confirmed the penalty of 10% and deleted the balance amount of penalty and no interference is called for in the order of the Ld.CIT(A). 7. We have heard both the parties and perused the material placed on record. In the instant case, a search u/s 132 was conducted and during the course of search, the income tax department found that the assessee has quoted the sale rate of plots @ ₹ 4,600/- per sq.yd for sale of plots at Sunray Village and Sunray Beach Front. Though the assessee stated that ₹ 4,600/- was estimated sale price, it has admitted the additional income of ₹ 5,58,00,000/- for the impugned assessment year. Accordingly, the assessee filed the return of income admitting additional income and also paid the taxes. The AO levied the penalty @30% u/s 271AAB with an observation that the assessee has not explained the manner in which the undisclosed income was earned. On appeal, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Subsequently, the AO completed the penalty proceedings levying penalty of ₹ 60,00,000/- @30% on undisclosed income of ₹ 2,00,00,000/-. 11. Against which the assessee filed appeal before the CIT(A) and the Ld.CIT(A) cancelled the penalty holding that the additional income admitted by the assessee cannot fall within the scope of undisclosed income as defined in section 271AAB of the Act. 12. Against which the revenue has filed appeal before this Tribunal and the assessee filed cross objections supporting the order of the Ld.CIT(A). 13. During the appeal hearing, the Ld.DR argued that a search u/s 132 was conducted in this case on 27.04.2013 and the assessee had admitted the income of ₹ 2,00,00,000/- for the A.Y.2014-15. The Ld.DR further submitted that the undisclosed income admitted by the assessee required to be considered as income which was brought forward from earlier years and crystalised during the period till the date of search in the impugned assessment year. Therefore, argued that the contention of the Ld.CIT(A) that the undisclosed income accounted on estimation basis is incorrect. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld.CIT(A). 15. We have heard both the parties, perused the material placed on record. In the instant case, the search was conducted on 27.04.2013 i.e. at the beginning of the year. The undisclosed income required to be computed for the period 01.04.2013 to 27.04.2013 and there is no material brought on record relating to sales made during the period from 01.04.2013 to 27.04.2013. The AO did not quantify the sales and the income derived by the assessee for the period from 01.04.2013 to 27.04.2013 i.e the date of search. Inspite of no material was found, the assessee has admitted the additional income of ₹ 2.00 crores which is nothing but purely on estimation basis for the whole year. The undisclosed income defined in section 271AAB is only with reference to specified period in the previous year. Specified year though includes the year of search, the income admitted for the period after the date of search cannot be termed as undisclosed income. In the instant case as discussed earlier, there was no material available to the department to show that there was undisclosed income which comes to the ambit of 271AAB of the Act for the period from 01.04.2013 to 2 ..... 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