TaxTMI 
TaxTMI 
2020 (1) TMI 962
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....idered the submissions of the Ld.AR of the appellant and the observations and findings recorded by the Ld. AO and the factum of the case. In the facts involved in the present case, search action u/s 132 was conducted on 11.04.2013. In the course of search, certain loose papers & documents were seized which inter alia contained the details of commodity dealings by the appellant. With reference to these loose documents, the appellant admitted before the Investigating authorities that they represented his income aggregating to Rs. 3,16,37,099/- for the relevant previous year and therefore offered the same to tax in the relevant AY 2013-14. In consonance with his statement so recorded u/s 132(4), the appellant disclosed the income derived from these transactions under the head 'Income from Other Sources' in the return of income filed for the relevant AY 2013-14. The Ld. AO who framed the assessment u/s 143(3) assessed the income of the appellant as returned by him. The Ld. AO however initiated penalty proceedings u/s 271AAB of the Act with reference to such income. Before the Ld. AO the appellant argued that the penalty u/s 271AAB was not applicable since the income of Rs. 3,16....
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....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 Chief Commissioner or] Chief Commissioner or Principal Commissioner or Commissioner before the date of 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.] 4. From the above definition it shall be noted that the Legislature has assigned specific meaning to the term "undisclosed income". The said meaning is not borrowed from Section 68 to 69D of the Act but the term has been specifically defined for the purposes of levy of penalty Section 271AAB of the Act. 5. The two sub-clauses (i) & (ii) contained in clause (c) of Explanation 271AAB which define 'undisclosed income' can be further broken two parts; sub-....
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....e of search. It is very common for assessees to record and update their books of account at periodic intervals, which may be weekly, bi-weekly, monthly, quarterly etc. For instance the cash-book of an assessee is generally maintained an day-to- day basis. However purchases & sales made in the regular course of business; are generally not recorded on the very date of receipt or dispatch of gods but on weekly/monthly basis, depending upon the volume. Further entries with regard to depreciation, interest provisions, valuation of closing stock etc. are generally passed at the end of the financial year and these entries may not be found in the books on the date of search. Similarly where income are derived from sources other than 'business' or the assessee's regular sources', such transactions & income/loss derived therefrom are generally accounted at the year-end or at the time of finalization of accounts / return of income. For the reasons set out in the foregoing it is very much possible that certain regular business documents which are available with the assessee on a particular date may not be recorded on the same date but is incorporated in the regular books at a....
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....l/2015 vide its order dated 25.05.2018 is squarely applicable to the facts involved in the appellant's case. In the said decision the Hon'ble Tribunal followed the decision earlier rendered by its another coordinate Bench in the case of Manish Agarwala in ITA No. 1479/Kol/2015 for AY 2013-14 dated 09.02.2018. The relevant extracts of the decision is as follows: "According to the Ld. AR, from the facts and circumstances described above, since the assessee is not engaged in business or profession, he does not require to maintain the books of account as per sec. 44AA or sec. 44AA(2) of the Act, therefore, the assessee's case falls in the second limb i.e. "or other documents" as stipulated u/s. 271AAB Explanation (c) (supra) which describes undisclosed income for the purposes of this section which is very important to adjudicate this issue. Therefore, the question is when the search took place, the assessee's transactions (in this case, the speculative transaction) has been found to be recorded in the "other documents" which is (retrieved from the assessee's accountant's drawer) and based on that the assessee declared Rs. 3 cr. during search and later returned....
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.... these two assessment year(s) reading as under:- "05. FINDINGS & DECISION: 1. I have carefully considered the submissions of the Ld.AR of the appellant and the observations and findings recorded by the Ld. AO and the factum of the case. In the facts involved in the present case, search action u/s 132 was conducted on 11.04.2013. In the course of search, certain loose papers & documents were seized which inter alia contained the details of commodity dealings by the appellant. With reference to these loose documents, the appellant admitted before the Investigating authorities that they represented his income aggregating to Rs. 1,99,54,112/- for the relevant previous year and therefore offered the same to tax in the relevant AY 2013-14. In consonance with his statement so recorded u/s 132(4), the appellant disclosed the income derived from these transactions under the head 'Income from Other Sources' in the return of income filed for the relevant AY 2013-14. The Ld. AO who framed the assessment u/s 143(3) assessed the income of the appellant as returned by him. The Ld. AO however initiated penalty proceedings u/s 271AAB of the Act with reference to such income. Before th....
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.... article or thing or any entry in the books of account or other 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 Chief Commissioner or} Chief Commissioner or Principal Commissioner or Commissioner before the date of 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.] 4. From the above definition it shall be noted that the Legislature has assigned specific meaning to the term "undisclosed income". The said meaning is not borrowed from Section 58 to 59D of the Act but the term has been specifically defined for the purposes of levy of penalty Section 271AAB of the Act. 5. The two sub-clauses (i) & (ii) contained in clause (c....
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....he commencement of search may not necessarily be found recorded in the books to the very time & date of search. It is very common for assessees to record and update their books of account at periodic intervals, which may be weekly, bi-weekly, monthly, quarterly etc. For instance the cash-book of an assessee is generally maintained an dayto- day basis. However purchases & sales made in the regular course of business; are generally not recorded on the very date of receipt or dispatch of gods but on weekly/monthly basis, depending upon the volume. Further entries with regard to depreciation, interest provisions, valuation of closing stock etc. are generally passed at the end of the financial year and these entries may not be found in the books on the date of search. Similarly where income are derived from sources other than 'business' or the assessee's regular sources', such transactions & income/loss derived therefrom are generally accounted at the yearend or at the time of finalization of accounts / return of income. For the reasons set out in the foregoing it is very much possible that certain regular business documents which are available with the assessee on a par....
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....tional Hon'ble ITAT, Kolkata in the case of DCIT vs. Pradeep Kumar Agarwal in ITA no. 1478/Kol/2015 vide its order dated 25.05.2018 is squarely applicable to the facts involved in the appellant's case. In the said decision the Hon'ble Tribunal followed the decision earlier rendered by its another coordinate Bench in the case of Manish Agarwala in ITA No. 1479/Kol/2015 for AY 2013-14 dated 09.02.2018. The relevant extracts of the decision is as follows: "According to the Ld. AR, from the facts and circumstances described above, since the assessee is not engaged in business or profession, he does not require to maintain the books of account as per sec. 44AA or sec. 44AA(2) of the Act, therefore, the assessee's case falls in the second limb i.e. "or other documents" as stipulated u/s. 271AAB Explanation (c) (supra) which describes undisclosed income for the purposes of this section which is very important to adjudicate this issue. Therefore, the question is when the search took place, the assessee's transactions (in this case, the speculative transaction) has been found to be recorded in the "other documents" which is (retrieved from the assessee's accounta....