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TMI Blog2018 (12) TMI 1762X X X X Extracts X X X X X X X X Extracts X X X X ..... at the aforesaid surrender can not / does not fall within the definition of the undisclosed income, as defined under the provisions of section 271AAB is concerned, we do not agree with the above submissions. The assessee has duly made a statement that the aforesaid disclosure was on account of unrecorded transactions / discrepancies in the accounts and on account of certain loose papers found during the search action. Disclosure, in our view, falls within the scope of undisclosed income as provided under Explanation (C) to section 271AAB. We hold that the case of the assessee does not fall under the provisions of section 271AAB(3) but under the provisions of section 271AAB(1) and minimum penalty@ 10% of the undisclosed income is leviable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized amount on the ground that as per the provisions of section 132B (1)(i) of the Act, only existing liability under the Income Tax Act, 1961 and amount of liability determined on completion of assessment can be adjusted against the P.D. account. Further, the Assessing officer noticed that the manner and mode of earning of aforesaid disclosed income has not been substantiated. That the assessee had given a general disclosure. The Assessing officer , therefore, levied the penalty u/s 271AAB(3) of the Act @ 30% of the undisclosed income. 4. The assessee contested the aforesaid levy of penalty before the Ld. CIT(A) but remained unsuccessful. 5. Before us, Ld. Counsel for the assessee has submitted that no undisclosed incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancies in the accounts / unaccounted sales etc. The assessee explained that the aforesaid surrender of income was on account of unrecorded business income. The assessee has also returned the said amount as business income which has been admitted by the Assessing officer as such even in the assessment order. In respect of undisclosed income, the assessee is not supposed to prove the source of each and every penny or one by one unaccounted entry, rather, what is required is that the assessee must specify the manner of earning of such income and has to substantiate the said manner. From the facts of this case, it is apparent that the assessee had disclosed / surrendered the aforesaid amount of ₹ 4 crores on account of undisclosed busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earch, in a statement under sub-section (4) of section 132, does not admit the undisclosed income; and (ii) on or before the specified date- (A) declares such income in the return of income furnished for the specified previous year; and (B) pays the tax, together with interest, if any, in respect of the undisclosed income; (c) a sum [computed at the rate of sixty per cent] of the undisclosed income of the specified previous year, if it is not covered by the provisions of clauses (a) and (b). (2) No penalty under the provisions of [section 270A or] clause (c) of sub-section (1) of section 271 shall be imposed upon the assessee in respect of the undisclosed income referred to in sub-section (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chief Commissioner or Principal Commissioner or Commissioner before the date of 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. 8. The provisions of section 271AAB (1) are little bit akin to provisions of section 271AAA of the Act. However, the difference is that if the assessee surrendered the undisclosed income in a statement u/s 132(4) of the Act and specify and substantiate the manner in which the income has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 271AAAB of the Act . Even otherwise, the assessee has also explained that it was not possessed of sufficient funds and the moment it got possessed of funds, it filed the revised return on 12.2.2014 and paid due taxes. So far as the contention of the Ld. Counsel for the assessee that the aforesaid surrender can not / does not fall within the definition of the undisclosed income, as defined under the provisions of section 271AAB is concerned, we do not agree with the above submissions. The assessee has duly made a statement that the aforesaid disclosure was on account of unrecorded transactions / discrepancies in the accounts and on account of certain loose papers found during the search action. 10. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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