2023 (5) TMI 471

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....h & seizure operation, in a statement recorded u/s. 132(4) of the Act from a person connected to the group, additional income to the tune of Rs.60.00 crores was offered at the hands of different entities including present Assessee. In so far as present Assessee is concerned, additional income of Rs.10.00 crores was offered on account of disallowance of expenses and others. However, in the return of income filed in response to notice issued u/s. 153A of the Act, Assessee offered additional income of Rs.1.75 crores, being interest income. In the assessment proceedings, Assessing Officer called for various details and ultimately made addition of Rs.17.57 crores by estimating the net profit after rejecting books of account. Of course, additionally, Assessing Officer made disallowance of an amount of Rs.15.74 crores u/s. 14A read with Rule 8D. However, presently, we are not concerned with that disallowance. Based on the disclosure of income of Rs.10.00 crores made at the time of search and seizure operation, Assessing Officer initiated proceedings for imposition of penalty u/s. 271AAA of the Act and ultimately passed an order imposing penalty of Rs.1.00 crore under the said provision. A....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rom business and disallowance u/s. 14A. Thus, he submitted, the additions made were not in the nature of undisclosed income of Assessee. Thus, he submitted, since section 271AAA is not applicable to Assessee, ld. Commissioner (Appeals) has rightly deleted the penalty imposed. 5. We have considered rival submissions and perused the materials on record. Before we proceed to examine validity or otherwise of penalty imposed u/s. 271AAA of the Act in the case of assessee, it is necessary to look to the provisions of section 271AAA of the Act, which reads as under: 271AAA. (1) The Assessing Officer may, notwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under section 132 on or after the 1st day of June, 2007 but before the 1st day of July, 2012, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him, a sum computed at the rate of ten per cent of the undisclosed income of the specified previous year. (2) Nothing contained in sub-section (1) shall apply if the assessee,- (i) in the course of the search, in a statement under sub-section (4) of section 132, admits the undisclosed ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....section (2) carves out certain exceptions to the extent that where Assessee admits the undisclosed income in statement recorded u/s. 132(4) and specifies the manner in which the income was derived and pays the taxes together with interest in relation to such undisclosed income, then no penalty will be imposed. The expression "undisclosed income" has been defined in Explanation to section 271AAA of the Act. As per said definition, undisclosed income means any income representing either wholly or partly, 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 and seizure operation which has not been recorded before the date of search in the books of account or which has not been disclosed before the date of search. It also means, any income arising out of any entry in respect of an expenditure recorded in the books of account or other documents maintained in normal course relating to specified previous year, which is found to be false and would not have been found to be so, had search not taken place. 7. Keeping in perspective the aforesaid provisions, if we examine relev....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ioner (Appeals), the Tribunal, in ITA No. 4972/Del/2015 dated 25.08.2022, has deleted such addition. Thus, in sum and substance, in quantum proceedings, Assessee has got the desired relief as the addition sustained by the ld. First Appellate Authority has been deleted. In any case of the matter, on overall analysis of facts and material on record, we are convinced that there is no undisclosed income relating to specified previous year which could have enabled the Assessing Officer to invoke the provisions of section 271AAA of the Act. Therefore, we do not find any valid reason to interfere with the decision of ld. Commissioner (Appeals). Grounds raised by the Revenue, being devoid of merit, are dismissed. ITA No. 404/Del/2016: 9. Facts in this appeal are more or less identical to ITA No. 403/Del/2016. In case of the present Assessee, an amount of Rs.39.00 crores was declared as additional income at the time of search and seizure operation. Additional income offered at the time of search and seizure operation was followed up by Assessee in the return of income wherein declared income was taken to Profit & Loss Account, though with slight variation in the manner in which such incom....