TaxTMI 
TaxTMI 
TaxTMI 
2019 (5) TMI 738
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....llowing assets/documents:- (i) Cash found from the residential premises of the assessee group amounting to Rs. 11 lacs. (ii) Pages 54 to 59, of Annexure A-10 of Delta-I, amounting to Rs. 60,000/-. (iii) Capital introduced in firms and purchase of shares of companies amounting to Rs. 19,77,500/-. (iv) Jewellery amounting to Rs. 7,50,000/-. 4. The above surrender was disclosed in the return of income filed by the assessee and was accepted by the Revenue also. However, penalty u/s 271AAA was initiated and thereafter levied for the reason that the assessee had failed to substantiate the manner in which the undisclosed income had been earned by him. 5. The matter was carried in appeal before the Ld.CIT(A), who followed the decision of ITAT Chandigarh Bench in the case of DCIT Vs. Shri Sanjeev Goyal in ITA No.109/Chd/2015 for assessment year 2011-12, as per which if the assessee had disclosed income while giving statement u/s 132(4) during the course of search and paid tax thereon and showed the said undisclosed income in the return under the head "Income from Business" no penalty u/s 271AAA was leviable . In view of the aforesaid decision, surrender of cash of Rs. 11 lacs, th....
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....derived from speculative dealings in commodities outside the books of accounts. It is I further not in dispute that the assessee had disclosed the surrendered income in its return of income and paid the taxes thereon. In the above factual background, it is to seen whether penalty u/s 271AAA is leviable. It is the contention of the Revenue that though admittedly, the assessee has surrendered an income of Rs. 1,50,00,000/- during the course of search and seizure operation, disclosed the manner of earning the same being from speculative dealings in commodities and also disclosed the income in its return of income, the assessee had not substantiated the manner of earning the undisclosed income and hence not fulfilled all the conditions specified u/s 2 71AAA for grant of immunity from penalty. The issue therefore is whether admission of undisclosed income and a description of the nature of the same could be treated as compliance with the condition of specifying and substantiating the manner in which the undisclosed income is earned as required by the section 271AAA(2)(i)and (ii). 10. We find that a similar requirement of disclosing the manner in which undisclosed income is earne....
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....t the assessee has specified and substantiated the manner of earning the income and has not violated any of the conditions specified u/s 271AAA(2), for granting immunity from penalty. 12. We therefore hold that no penalty u/s 271AAA could be levied in the present case. Accordingly we uphold the order of the Id. CIT(A) deleting the penalty. 5.4 In view of the facts of the case, submissions made by the appellant and judicial pronouncement of the Hon'ble ITAT Chandigarh on this issue discussed above, it is held that the appellant has specified and substantiated the manner of earning the income with regard to following income disclosed:- (i) Capital introduced in firms and purchase of shares of companies amounting to Rs. 19,77,500/-. (ii) Documents page 54-59 of annexure A-10 of delta 1 amounting Rs. 60,000/- However with regard to disclosure on account of cash found from residential premises of the assessee group amounting Rs. 11,00,000/-, it is held that manner of earning this income-has not been specified and substantiated because:- (i) Cash of Rs. 11 lakh surrendered by the appellant was part of Rs. 44 lakh cash surrendered by the assessee group vide letter dated 22....
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....ctional High Court in the case of M/s Kim Pharma (P) Ltd. vs CIT (P&H) (2013) 258 CTR 458. 4. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off." 7. During the course of hearing before us, the Ld. counsel for assessee stated that the CIT(A) had upheld the levy of penalty on cash for the reason that the same was assessable as deemed income u/s 69A of the Act and not business income as per the decision of the Hon'ble Jurisdictional High Court in the case of Kim Pharma Pvt. Ltd.(supra). The Ld. counsel for assessee stated that this finding of the Ld.CIT(A) was contrary to the facts of the case since the surrender made on account of cash had not been assessed as deemed income u/s 69A of the Act but had been accepted alongwith the other income surrendered by the assessee, penalty on which had been deleted by the CIT(A). 8. The Ld. DR fairly conceded to this fact, but at the same time relied on the findings of the CIT(A) that the assessee had not been able to specify and substantiate the manner of earning the cash surrendered and therefore penalty u/s 271AAA had been rightly upheld by the CIT(A). 9. We have c....