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TMI Blog2024 (10) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... to search. Taxable income from LTCG cannot be treated as undisclosed income by any stretch of imagination. On perusal of the assessment order or penalty order, it is seen that there is no reference to any statement recorded u/s 132(4) of the Act which may show any kind of admission towards so called undisclosed income. The admission of undisclosed income of alleged undisclosed income (with some further conditions with which, we are not personally concern) is the fulcrum on which action u/s 271AAB(1A) of the Act is based. In the absence of such admission imposition of penalty @ 30% of the so called undisclosed income under clause (a) of Section 271AAB(1A) of the Act is not justified. The case of the assessee does not fall in the definition of undisclosed income provided in the Explanation appended to Section 271AAB of the Act. The assessee claims to be not obligated of law to maintain the books of accounts and the income declared in the return of income arising from entries in respect of LTCG has not been alleged to be false by the Revenue. In the identical fact situation, in the case of family member of assessee (Tanya Jaiswal) [ 2024 (9) TMI 425 - ITAT DELHI] has affirmed the view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment records and statement u/s 132(4) of the appellant. With regard to bogus LTCG / share trading appellant submitted during the assessment proceedings as under: (Query No.2) As alleged by you that I have taken bogus capital gain amounting to Rs. 2,77,49,596/- by way of bogus trading, I would like to submit that there is no bogus capital gain claimed by me in the return filed by me, During the year under consideration I have done business of share trading in which I have already shown sale of shares amounting to Rs. 3,26,07,513/- in by Profit and Loss account, further the commission amounting to Rs. 23,59,805/- which includes Brokerage / Commission / STT/ GST on Purchases / Professional Charges / Security Transaction Tax/ Security Transaction Tax is duly accounted in out books of accounts, the details of the same along with supporting documents is enclosed Further I had already paid taxes on the same at highest rate and the same is duly recorded in my original return. The AO accepted the above submission of the appellant and did not treat the amount shown by the appellant. No addition has been made by the AO u/s 68 or 69A r.w.s. 115BBE. The undisclosed income as per provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the result, the appeal is allowed. 5. Aggrieved by the relief granted by the CIT(A), the Revenue is in appeal before the Tribunal. 6. As per the grounds of appeal, the Revenue has challenged the action of the CIT(A) deleting penalty imposed under Section 271AAB of the Act. 7. The learned DR for the Revenue relied upon the penalty order passed by the Assessing Officer and submitted that had the search not taken place, the assessee would not have disclosed the income on account of LTCG and cash transaction declared and included in the return of income. The learned DR thus submitted that the action of the CIT(A) is not justified. 8. The learned Counsel for the assessee, on the other hand, submitted at the outset, that in the ingredients of Section 271AAB of the Act are clearly not satisfied in the present case and therefore, invocation of such provisions is a complete non-starter at the threshold. The learned Counsel pointed out that the assessee, an individual, does not maintain any books of accounts nor is required to maintain such books under law. The assessee inter alia declared LTCG of Rs. 2,77,49,596/- as taxable income. The assessment order is based upon the assessee s own decl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned Counsel thus submitted that the identical fact situation has already been examined by the Co-ordinate Bench in the same search and thus, the Revenue has no case to argue differently in the case of present Assessee. 10. We have carefully considered the rival submissions and perused the material available on record. 11. As contended on behalf of the assessee, neither the income disclosed in the return by way of LTCG fall under the definition of undisclosed income contemplated under Section 271AAB of the Act nor any admission of so called undisclosed income has been made in the course of search in statement under Section 132(4) of the Act. The prerequisites of Section 271AAB (1A) of the Act are thus not satisfied. The action of the AO thus do not align with the penalty provisions codified under Section 271AAB of the Act. 12. Significantly, the LTCG in question was taxable in law in so far as the A.Y. 2021-22 is concerned and not exempt under Section 10 of the Act in any manner. The transactions are routed through Banking Channel and advance tax has also been paid prior to search. Under these circumstances, taxable income from LTCG cannot be treated as undisclosed income by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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