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TMI Blog2020 (4) TMI 461X X X X Extracts X X X X X X X X Extracts X X X X ..... rse the CIT(A) s lower appellate findings under challenge to this effect in principle. Whether there is any undisclosed income involved going by sec. 271AAB Explanation (c) or not? - A perusal of the case file suggests that the assessee s sec. 132(4) disclosure made during the course of search declared total income involving capital introduced, profit as per P L account, capital in the name of sundry creditors, profit on sales @ 5%, commodity profit with miscellaneous and other income etc., involving corresponding sum(s). Out of this, the assessee s books had duly recorded initial capital, sundry creditors and miscellaneous income and the balance amount ( involving commodity profits ) stood not recorded in the regular books of accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IAL MEMBER :- This Revenue s appeal for assessment year 2013-14 arises against the Commissioner of Income Tax (Appeals)-20, Kolkata s order dated 29.08.2018 passed in cash No. CIT(A), Kolkat-20/12433/2015-16 involving penalty proceedings u/s 271AAB of the Income Tax Act, 1961; in short the Act . Heard both the parties. Case file perused. 2. The Revenue s sole substantive grievance pleaded in the instant appeal seeks to reverse the CIT(A) action deleting sec. 271AAB penalty of ₹16052500/- imposed by the Assessing Officer in his order dated 22.09.2015. The CIT(A) s detailed discussion to this effect reads as under:- 5. Discussion, and, Decision: My discussion will be mostly like-wise as for the AY 2012-13. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AB but is only regarding the quantum. Preceding to the clause (a), in the opening operative phrase of the section is the word may . It is may because the Explanation (c) definition of undisclosed income has to first find place. And as discussed above, the Explanation (c) does not find place in this instant case. So, in the impugned penalty order to reproduce the clause (a) to the subsection (1) to the said section 271AAB was only to put in some stuffing for the body of the penalty order. 5.5 The ACIT AO / JCIT has started the argument for imposing the penalty that the assessee had not filed appeal against the assessment. This argument is out of context for when the assessee had honoured the 132 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 determining total income of ₹ 17,60,23,230/-. Consequently, penalty proceedings under sec. 271AAB of the I. Tax Act was initiated and penalty of ₹ 1,60,52,500/- being 10% of the income disclosed under sec. 132(4) of the Act was levied vide order dt. 22.09.2015. Being aggrieved, the assessee has come in appeal on the following grounds:- GROUNDS OF APPEAL 1) That the AO was wrong in imposing penalty of ₹ 1,60,52,500/- u/s 271AAB, being the 10% of the income disclosed under sec. 132(4) of the Act. The penalty so levied is wrong and need to be deleted. 2) The assessee craves leave to add, alter, amend or withdraw any ground or grounds of appeal before or at the time of hearing. Sd/- illegible. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e. u/s 271AAB comes into play in case of a search initiated on or after 01.07.2012. This statutory provision applies in case of an undisclosed income defined in sec. 271AAB Explanation (c). It emerges from a perusal of the CIT(A) s order that he has nowhere examined the relevant facts qua assessee s alleged undisclosed income as to whether the same represented any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other document in the light of the foregoing explanation. We also notice that their lordships judgment in Sudarshan Silk Mills (supra) does not deal with the impugned statutory provision but involved sec.271(1)(c) penalty proceedings only. We therefore reverse the CIT(A) s low ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these peculiar facts and circumstances that the Assessing Officer was very well justified in invoking the impugned penal provision qua the assessee s undisclosed income of ₹690,69,994/- than the entire disclosure of ₹16,05,25,000/-. We make it clear that Revenue has failed to pin-point any material in the nature of seized documents indicating the remaining three components of initial capital, sundry creditors and miscellaneous income (supra) which could be held to be undisclosed income going by sec.271AAB Explanation (c) of the Act. The Assessing Officer s action penalizing the assessee qua the said disclosed / duly recorded income is found to be not sustainable therefore. We make it clear that we have ourselves assumed our ..... X X X X Extracts X X X X X X X X Extracts X X X X
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