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TMI Blog2020 (11) TMI 936X X X X Extracts X X X X X X X X Extracts X X X X ..... Sunder Singh, Accountant Member For the Assessee : Shri M.V.Prasad, CA, AR For the Revenue : Shri D.K.Sonowal, CIT, DR ORDER PER SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER : This appeal is filed by the revenue against the order of the Commissioner of Income Tax (Appeals) [CIT(A)]-3, Visakhapatnam in Appeal No.74/2019-20/CIT(A)-3/VSP/2019-20 dated 19.07.2019 for the Assessment Year (A.Y.)2016-17 and cross objections are filed by the assessee in support of the order of the Ld.CIT(A). 2. All the grounds of appeal are related to the penalty levied by the Assessing Officer (AO) u/s 271AAB of the Income Tax Act, 1961 (in short Act ) which was deleted by the CIT(A). During the year under consideration, the assessee has sold the land admeasuring 8,470 sq.yds and 7,260 sq.yds located at Mangalagiri Road, Guntur to M/s N.S. Vaishno Devi Developers (India) Pvt. Ltd. on 12.06.2015 for a consideration of ₹ 8,47,00,000/- and ₹ 7,26,00,000/- respectively aggregating to ₹ 15,73,00,000/-. The assessee has filed the return of income declaring total income of ₹ 13,17,76,430/- which includes the long term capital gains of ₹ 9,44,79,229/-. A se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see and cancelled the penalty. 4. Against which the department is in appeal before this Tribunal. Supporting the order of the AO, the Ld.DR submitted that in the instant case, the assessee has filed the return of income originally admitting total income of ₹ 13,17,76,430/- and understated the sale proceeds of land sold to M/s N.S.Vaishno Devi Developers (India) Pvt. Ltd located at Mangalagiri Road, Guntur. But for the search conducted u/s 132, the on money received by the assessee would not have come to the notice of the department, therefore, argued that the undisclosed income offered by the assessee attracts penalty u/s 271AAB of the Act, therefore, argued that the order of the Ld.CIT(A) required to be set aside and the order of the AO to be upheld. 4.1. On the other hand, the Ld.AR relied on the order of the Ld.CIT(A). 5. We have heard both the parties and perused the material placed on record. In the group cases of M/s Mahaboob Khan Diamonds Jewellers Pvt. Ltd., Guntur, search u/s 132 was conducted and in the case of the assessee survey u/s 133A was carried out but not the search u/s 132 of the I.T Act. The assessment was also completed u/s 153C r.w.s. 143(3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ship firm was subjected to a search u/s. 132 of the Act on 21.11.2012 at Bagalkot. Certain evidence was found during the course of such search and based on those documents proceedings u/s. 153C of the Act were initiated against the assessee in AYs 2007-08 to 2012-13. Various additions were made to the total income of the assessee in the order passed u/s. 153C of the Act r.w.s. 143(3) of the Act. In respect of those additions, penalty proceedings were initiated u/s. 271AAB of the Act. 5. Section 271AAB of the Act reads as follows:- Penalty where search has been initiated. (1) The Assessing 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the course of a search under section 132, which has-- (A) not been recorded on or before the date of search in the books of account or other documents maintained in the normal course relating to such previous year; or (B) otherwise not been disclosed to the Chief 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. 6. The AO imposed penalty on the assessee ignoring the plea of assessee that the amount brought to tax was accepted and taxes paid thereon just to purchase peace. The CIT(Appeals) confirmed the order of AO. 7. Aggrieved by the order of CIT(Appeals), the assessee has preferred the present appeals before the Tribunal. 8. Before the Tribunal, the assessee has challenged the order of CIT(Appeals) on the ground that imposition of penalty is bad in law. In this regard it was submitted that the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on under s.271AAB of the Act for the purposes of imposition of penalty. Hence, we do not see any infirmity in the conclusion drawn by the CIT(A). 11. The Pune Bench of the Tribunal in the case of Volga Dresses (supra) has also taken a similar view:- 6. We have considered the rival submissions. A perusal of the provisions of section 271AAB shows that the opening words are penalty where search has been initiated a perusal of the provisions under Section 271AAB also talks of the assessee declaring any undisclosed income in the course of the search in the statement under section 132(4). Admittedly in the present case, that is in the case of the assessee firm in appeal there has been no search. Search admittedly is on the residence of one of the partner of the assessee firm. Further a perusal of the order of the learned CIT(A) also clearly shows that the learned CIT(A) has cancelled the penalty on the ground that there was no search in the case of the assessee firm. The revenue has not been able to point out as to how this finding of the learned CIT(A) is erroneous. This being so the finding of the learned CIT(A) on this issue stands confirmed. 12. In view of the afo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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