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TMI Blog2022 (7) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Amol Kamat, CIT DR ORDER PER SHRI RAJESH KUMAR, AM: This is an appeal preferred by the assessee against the order of the Commissioner of Income Tax(Appeals)-21, Kolkata [hereinafter referred to as CIT(A) ] dated 24.09.2019 for the assessment year 2012-13. 2. The only issue raised in various ground by the assessee is against the confirmation of penalty of Rs. 4 Lakhs by Ld. CIT(A) as imposed by the AO @ 10% u/s 271AAA of the Income Tax Act, 1961 (hereinafter referred to as the Act) with reference to Rs. 40 Lakhs which was alleged to be undisclosed income. 3. Facts in brief are that a search and seizure operation u/s 132(1) was conducted on the assessee s premises on 29.05.2012. The assessee filed original return of income on 30.11.2012 u/s 139(1) of the Act declaring total income of Rs. 70,76,490/- and also filed return in compliance to notice issued u/s 153A of the Act on 15.12.2014 declaring total income of Rs. 4,28,92,020/-. Finally, the assessment u/s 143(3) read with Section 153A of the Act was framed vide order dated 30.03.2015 at total income of Rs. 4,74,16,890/-. Pertinent to mention that the assessee had made a disclosure of Rs. 3,98,15,530/- du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmation of addition by Ld. CIT(A) which was itself wrong and could have been deleted, had the assessee preferred an appeal against the quantum proceedings as no addition could be made on the basis of mere statement of the assessee and there has to be corroborating material justifying the addition irrespective of the fact of disclosure by the assessee during search. The Ld. Counsel of the assessee submitted that the said 40 lakh was only declared conditionally in order to cover any discrepancy / mistake in the books of accounts of the assessee and therefore was not disclosed in the return filed in response to the notice issued u/s 153A of the Act as no such discrepancy/mistake was found and therefore the penalty levied by the AO is wrong as it does not fall within the ambit of undisclosed income as contemplated in Section 271AAA of the Act. 5. The Ld. D.R. on the other hand strongly opposed the arguments of the ld. Counsel of the assessee by submitting that the addition in quantum proceedings has already attained finality as the assessee has not challenged the order of first appellate authority confirming the quantum addition before the tribunal. The ld DR stated that in vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not attracted, since it satisfied all the three (3) conditions stipulated u/s. 271AAA(2) of the Act and since the fact remains that assessee has paid the entire amount of tax along with interest so it was contended that no penalty under sub-section (1) of section 271AAA of the Act was warranted. However, the AO did not agree and levied penalty @ 10% of the total amount of the entire undisclosed income of Rs.3,78,57,991/- which comes to Rs.37,85,799/-. On appeal, the Ld. CIT(A) has taken note of the fact that during the search operation Shri Keshaw Kumar Bubna the key person of the assessee company in his statement recorded u/s. 132(4) of the Act has disclosed the additional income of Rs.3,78,57,991/- for AY 2012-13 and accordingly, the assessee filed its return of income showing Rs.3,63,19,410/- u/s. 153A of the Act (as noted by AO in the assessment order dated 30.03.2015). The Ld. CIT(A) has found that AO while completing the assessment u/s. 153A/143(3) of the Act on 30.03.2015 had accepted the returned income after making, inter alia, the addition of Rs. 40 lacs on account of discrepancies, technical adjustment and miscellaneous income which was offered during search and throu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents or transactions found in 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 Principal or Chief Commissioner or Principal or Commissioner before the date of the 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; (b) specified previous year means the previous year- (i) which has ended before the date of search, but the date of filing the return of income under sub-section (1) of section 139 for such year has not expired before the date of search and the assessee has not furnished the return of income for the previous year before the said date; or (ii) in which search was conducted. 8. From a bare reading of the aforesaid provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as additional income to the tune of Rs.3,38,57,991/-; and to be on the safe side and out of caution in its disclosure petition had offered the deficit/difference of Rs. 40 lacs (Rs.3.78 cr. Rs.3.38 cr.) on account of any discrepancy, technical adjustment and miscellaneous income. We note that the AO has noted in the assessment order dated 30.03.2015 that the assessee had filed its return of income pursuant to notice u/s. 153A of the Act reflecting Rs.3,63,19,410/- and the balance amount as admitted during search [Rs.3,78,57,991/- (admission/disclosure petition) Rs.3,38,57,991/-] to the tune of Rs. 40 lacs was also included in the assessment order passed by AO on 30.03.2015. this fact the Ld. CIT(A) has taken note of which according to him satisfies condition (i) and (ii) under sub-section (2) of section 271AAA of the Act in respect of Rs.3,38,57,991/-. And according to Ld. CIT(A), the other condition in clause (iii) also stands satisfied and so the AO erred in levying penalty u/s. 271AAA of the Act for the entire amount of Rs.3.,78 cr. when assessee has satisfied the condition in respect of Rs.3.38 cr. So, according to him, only the deficit portion i.e. Rs. 40 lacs is amenab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee as loss on account of commodity business (BSL/06) and Rs.1,31,58,841/- (which was falsely shown by assessee as loss from business of sarees BSL/05), which totals Rs.3,38,57,991/-. This amount qualifies as undisclosed income since by discovery of seized documents BSL-5 6 it revealed that assessee have falsely claimed loss from these two transactions this amount, so it qualifies as undisclosed income i.e. Rs.3.38 cr.. However, the question is what about the deficit/difference of Rs.40 lakhs which has been offered by assessee Shri Bubna on behalf of assessee of Rs.3.78 cr (out of Rs.34 cr.) which assessee has not shown in its return pursuant to notice u/s. 153A of the Act. In this regard, it is noted that assessee in its disclosure petition has conditionally offered Rs. 40 lakhs to cover any other undisclosed income which has been unearthed during search. This action of assessee was out of abundant caution and conditional (provided there is material suggesting any undisclosed income un-earthed during search). However, finding that there was no other undisclosed income to identify with the seized materials/Panchanama, the assessee while filing the return of income of Rs.3.6 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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