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TMI Blog2024 (7) TMI 884X X X X Extracts X X X X X X X X Extracts X X X X ..... any discrepancy in the documents and books seized during the course of search, work in progress and stock. CIT(A) further held that in absence of any discrepancy pointed out, the appellant's admission of undisclosed income does not fall in the definition of undisclosed income which is the very basis of giving immunity from penalty u/s 271AAA as all the sub-clauses of section 271AAA of the Act are related to undisclosed income . CIT(A) has therefore rightly held that no specific discrepancy has been pointed out and merely the fact that surrender has been made by the assessee to cover any potential discrepancy, the same doesn t fall in the definition of undisclosed income as so defined. We are in total agreement with the said reasoning of the ld CIT(A) and fully endorse the same as we have held earlier that the essential condition which needs to be satisfied before penalty is levied is that there is an undisclosed income of the specified previous year as found during the course of search. Inspite of the same, we find that the ld CIT(A) has gone ahead and confirmed the penalty and it is here that we donot agree with him. It is for the Assessing officer to record a specific finding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so made at the time of search. Similarly, another partner of the assessee firm, Shri Ajay Kumar Sood in his statement recorded under section 132(4) has confirmed the additional income so surrendered on behalf of the assessee firm. Thereafter, in the return filed in response to notice under section 142(1), the assessee firm has shown surrendered income of Rs. 1.75 crores and paid due taxes and interest thereon. 3.1 As per the AO, since the assessee has failed to specify the manner in which it had derived the additional undisclosed income which is mandatory requirement as per the provisions of Section 271AAA of the Act, penalty proceedings under section 271AAA were initiated against the assessee firm. The surrendered income of Rs. 1.75 Crores was however accepted and thereafter making certain other addition, the assessed income was determined at Rs. 4,30,65,183/-. 3.2 The assessee carried the matter in appeal before the Ld. CIT(A) who dismissed the appeal of the assessee in the quantum proceedings vide order dt. 07/02/2014. Thereafter during the course of penalty proceedings, fresh show cause was issued to the assessee and in response, the assessee filed its submission which were con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of the Firm, makes a voluntary disclosure of additional income of Rs. 75 lacs for F.Y. 2009-10 relevant to A.Y 2010-11 and Rs. 175 lakhs for the F.Y 2010-11 relevant to A.Y 2011-12 over and above regular income of the firm subject to no penal action or prosecution as per the provisions of the Act. It was further stated by him in the said statement that the voluntary disclosure is made to cover any discrepancy in the documents and books seized during the course of search, work in progress and stock and the additional income declared is out of their source of business income. Further, our reference was drawn to the statement of Shri Ajay Kumar Sood, another partner of the assessee firm, who in his statement under section 132(4), has submitted that the additional income declared is over and above their regular income and out of business income earned. It was submitted by the ld AR that in the Statements so recorded of both the partners of the assessee firm, the additional income has been declared on account of discrepancy in the documents and books seized during the course of search, work in progress and stock. 6.1 It was further submitted that for the purpose of levy of pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hd/2015 Others (Chd Trib), Shri Manoj Sahni Vs. DCIT in ITA No. 1372/Chd/2017 Others (Chd Trib), DCIT Vs. Shri Pardeep Aggarwal in ITA No. 1100/Del/2015 (Del Trib), Sunil Kumar Bansal Vs. DCIT 70 SQT 137 (Chd Trib), ACIT Vs. Munish Kumar Goyal 152 ITD 453 (Chd Trib), Neerat Singal Vs. ACIT 161 TTJ (Del Trib), Pramod Kr. Jain Vs. DCIT(2012) 77 DTR (CTK. Trib) 244, Ashok Kr. Sharma Vs. DCIT (2012) 77 DTR (CTK. Trib) 241 and decisions of Hon ble Courts in case of CIT Vs. Sudhir Jain 41 Taxmann.com 234 (Del HC), Pr. CIT Vs. Shahion Silk Mills Pvt. Ltd. vide ITA No. 823 of 2017 dt. 05/02/2018 (Gujarat), CIT Vs. Mahendra C. Shah reported in 299 ITR 305. 7. In his submissions, the ld DR submitted that the income of Rs. 1.75 crores, being the undisclosed income has been accepted by the partners of the assessee firm, Sh. Sanjay Kumar Sood and Sh. Ajay Kumar Sood in their statements recorded on oath u/s 132(4) of the Income Tax Act, 1961. It was further submitted that one of the partners of the assessee firm, Sh. Sanjay Kumar Sood in his statement recorded on oath u/s 132(4) of the Act has stated that the said disclosure of undisclosed income is made to cover any discrepancies in documents/b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h. The term undisclosed income has been specifically defined in the explanation to section 271AAA to mean any income of the specified previous year represented either wholly or partly by any money, bullion, jewellery or other article or thing found during the course of search which has 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. Therefore, the fact that surrender of some undisclosed income has been made during the course of search, or the fact that the surrender is voluntary and emerging out of the statements so recorded during the course of search or the fact that the undisclosed income is not recorded in the books of account prior to date of search is not sufficient to fasten the levy of penalty. The undisclosed income so surrendered and admitted during the course of search has to fall within the four corners of the definition of the undisclosed income and only in situation where it satisfy the said definition, the levy of penalty can be said to be justified and not otherwise. It is for the Assessing officer to record a specific finding that undisclosed income as so de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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