TaxTMI 
TaxTMI 
2020 (3) TMI 462
X X X X Extracts X X X X
X X X X Extracts X X X X
....e has taken following grounds of appeal: 1.00 IMPOSITION OF PENLATY TO THE TUNE OF Rs. 26,05,572 /- ON ADDITION MADE ON ACCOUNT OF UNDISCLOSED INCOME. 1.01 On the facts and circumstances of appellant's case and m law, the Id. CIT (Appeals) has erred \n confirming the levy of penalty to the tune of Rs. 26,05,5727- under section 271(1)(C) of the Act by the Id. AO on addition made on account of disclosure of additional income while filing return as part of search proceedings. While doing so, the Hon'ble CIT (Appeal) failed to appreciate that there was no addition made by the Id. AO during the course of assessment proceedings u/s 143(3) r.w.s 153A of the Act to the returned income under section 153A of the Act, and therefore appellant cannot be treated to be assessee concealing income. 1.02 Your appellant prays to hold so now and delete the impugned penalty. 2.00 YOUR APPELLANY CRAVES LEAVE TO ADD, AMEND AND /OR DELETE ALL OR ANY GROUND(S) TAKE HEREINABOVE. 3. Facts of the care as emanated from the penalty order: "In this case, the disclosure of Rs. 84.75.630/- was made due to search and thus this amount was undisclosed i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that basis. 3. I further wish to inform you that, new section 271AAB of the Act relating to penalty where search has been initiated on or after 01.07.2012 is inserted by the Finance Act, 2012 and the same has been has also been made effective from 01.07.2012. Therefore for any undisclosed income found during search proceedings there is separate penal provisions u/s 271AAB of the Act and penalty is not liveable u/s 271(l)(c) of the Act. 4. But ld. A.O. was not convinced with the plea of the assessee and imposed penalty of Rs. 26,05,572/-. 5. Against the imposition of penalty, assessee preferred first statutory appeal before the ld. CIT(A) who confirmed the action of the ld. A.O. 6. Now assessee has come before us. 7. In this case, a search /survey u/s 132/133A was conducted in the Dhanjimama Group of cases on 03.07.2012. In the search/survey proceedings, based on documents found, the partner of the assessee firm on behalf of the firm has disclosed an amount of Rs. 26,05,572/- for the year under consideration. 8. The revenue contention is that the disclosure of Rs. 26,05,572/-was made due to search and survey at the premises of Dhanjimama Group were assessee i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX (c) "undisclosed income" means-- (i) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable 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 54[Principal Chief Commissioner or] Chief Commissioner or 54[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.]" From the above provision, it is clear that the penalty shall be imposed under section 271AAB of the Act w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d that does not indicate any suppression of income but it is only projection of profit statement. The amount of Rs. 3571/- mentioned in the projections refers to cost and profit which is approximate sale price but not the cost as stated by the AO in the penalty order. The cost of construction in the projections projected at Rs. 2177/- which is in synch with the statement given by the assessee. The AO was happy with the disclosure given by the assessee and did not verify the factual position with the books of accounts and projections and bring the evidence to unearth the undisclosed income. Neither the A.O. nor the investigation wing linked the cost of profit or cost of asset to the entries in the books of accounts or to the sales conducted by the assessee to the sale deeds. Therefore, we are unable to accept the contention of the revenue that the loose sheet found during the course of search indicates any undisclosed income or asset or inflation of expenditure. The Hon'ble ITAT Delhi Bench in the case of Ajay Sharma v. Dy.CIT [2013] 30 taxmann.com 109 held that with respect to the addition on account of alleged receivables as per seized paper, there is no direct materi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... TAKE HEREINABOVE. 14. Since on similar facts and circumstances of the case, we have given relief to the assessee in connected ITA No. 570/Ahd/2018. Thus, in parity with the said appeal, we allow the appeal of the assessee. 15. Now we come to ITA Nos. 575 to 577/Ahd/2018 for A.Ys. 2011-12 to 2013-14 in the case of Sheela D. Mangalani , assessee has taken following grounds of appeal: 1.00 IMPOSITION OF PENLATY TO THE TUNE OF Rs. 61,43,570 /- ON ADDITION MADE ON ACCOUNT OF UNDISCLOSED INCOME. 1.01 On the facts and circumstances of appellant's case and in law, the Id. CIT(Appeals) has erred in confirming the levy of penalty to the tune of Rs. 61,43,750/- under section 271(1)(C) of the Act by the Id. AO on addition made on account of disclosure of additional income while filing return as part of search proceedings. While doing so, the Hon'ble CIT (Appeal) failed to appreciate that there was no addition made by the Id. AO during the course of assessment proceedings u/s 143(3) r.w.s 153A of the Act to the returned income under section 153A of the Act, and therefore appellant cannot be treated to be assesse concealing income. 1.02....