TaxTMI 
TaxTMI 
2019 (9) TMI 486
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.... The appeal in ITA No.739/Chd/2016 has been preferred by the Department against the order of the Commissioner of Income Tax (Appeals)-3, Gurgaon [in short CIT(A)] dated 28.3.2016 upholding the penalty levied u/s 271AAA of the Income Tax Act, 1961 (in short 'Act')., the appeal in ITA Nos.1266 & 1304/Chd/2017 are the cross appeals against the order of the Commissioner of Income Tax (Appeals)-3, Gurgaon dated 19.6.2017 against. 2. Since the facts and the issues involved in all the appeals, are identical, being the levy of penalty u/s 271AAA of the Income Tax Act, 1961 (in short 'the Act'), these appeals, therefore, have been heard together and are being disposed off by this consolidated order for the sake of convenience. 2. In all thes....
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.... the assessee had failed to substantiate the manner in which the surrendered income of Rs. 5,57,24,400/- was earned, hence the penalty was rightly levied by the A.O. and further rightly confirmed by the Ld.CIT(A). 8. However, on the other hand, the Ld. counsel for assessee has invited our attention to page 3 of the impugned order of the CIT(A), wherein the statement of Shri Nav Rattan Munjal, Promoter and Director of the assessee company in the form of questions and answers was recorded, whereby he had surrendered the aforesaid additional income. 9. Question Nos. 6 to 11 of the statement are relevant, which for the sake of convenience are reproduced as under: "Q-6 There are certain sheets marked as A-11/1,2,3,4. Please ....
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.... Ind Swift Ltd. Nil 12,73,41,000/- 12,73,41,000/- 42,80,04,000/- Thus an amount of Rs. 42,80,04,000/- rounded off to Rs. 43 crores is hereby surrendered for F.Y. 10-11 & 11-12 toward unaccounted cash profit earned from unaccounted transaction in CMO." 10. A perusal of the above questions and answers reveals that no such income in any form of cash or other valuable items was found during the course of search action, rather certain documents were seized, wherein certain unaccounted transactions were recorded. The questions were put to Shri Nav Rattan Munjal regarding unaccounted transactions and in answers to those question, as reproduced above, the Director of the company explained tha....
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....osed income and also specified the manner of earning of income, which also stood substantiated from the documents seized and has also paid the due taxes together with interest in respect of the undisclosed income. In view of this, the action of the lower authorities in levying the impugned penalty cannot be held to be justified. The same is accordingly, ordered to be deleted. The appeal of the Revenue is dismissed. 11. Now coming to the cross appeals in the case of M/s Ind. Swift Laboratories Ltd. in ITA No.1266/Chd/2017(assessee's appeal) and in ITA No.1304/Chd/2017 (Department's appeal), a perusal of the impugned order of the CIT(A) reveals that the Ld.CIT(A) relying upon the aforesaid statement of Shri Nav Rattan Munjal, Promoter D....
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....e lower authorities. Admittedly, no cash or other valuable items, which may constitute as undisclosed income of the assessee, was found during the course of search action except the seized documents, wherein the aforesaid unaccounted transactions were recorded. The assessee surrendered a total sum of Rs. 14,50,41,000/- on account of the aforesaid discrepancies/unaccounted transactions found during search action. The Ld.CIT(A) deleted the penalty in respect of the income surrendered in respect of unaccounted transactions, however, has confirmed the penalty in respect of which even no document/evidence of any unaccounted transaction was found. The assessee, however, has surrendered the aforesaid income to cover up further discrepancies, if an....
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....d the search not been conducted;" 15. A perusal of the above definition of undisclosed income would show that there must be some income found during the course of search action either in the form of money, bullion or jewellery or other items or there must be some transaction or entry either not recorded in the books of account or in the form of expenditure or an entry of any expenditure, etc., which is found to be false. However, we find that in the case of surrender of Rs. 1,77,00,000/- except the seized documents, otherwise nothing was found during the search action which would construe undisclosed income of the assessee as defined under the provisions of section 271AAA of the Act. Though the assessee has honored its commitment and has....