TaxTMI 
TaxTMI 
2024 (9) TMI 425
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....onducted on 06.01.2021 at the residence/business premises of Hans Group. The assessment proceedings of the assessee were transferred to Central Circle 31, New Delhi vide order under section 127 of the Act. Proceedings under section 153A of the Act were initiated by issue of notices u/s 143(2) and 142(1) and served on the assessee through ITBA. In response, the assessee submitted relevant details and clarifications from time to time. The return of income u/s 139 of the Act was filed on 14.01.2022 declaring income of Rs. 6,54,15,120/-. 3. Assessment was completed u/s 143(3) of the Act read with section 153A of the Act for the current AY 2021-22 on 30.03.2022 and assessed the income at Rs. 6,54,42,120/- by making an addition of Rs. 2,27,000....
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.... passed an order u/s 154 of the Act by increasing the penalty and imposed the penalty at 30% of the undisclosed income at Rs. 1,64,03,339/-. 5. Aggrieved, assessee preferred an appeal before the ld. CIT (A)-30, New Delhi and filed detailed submissions which are reproduced at pages 5 to 18 of the ld. CIT (A)'s order. After considering the detailed submissions of the assessee, ld. CIT (A) deleted the penalty with the following observations :- "7.1 The appellant objected the penalty imposed by the AO u/s 271AAB(1A) and submitted that the AO was factually wrong in presuming that it would not have declared its income on account of LTCG and cash receipts had no search and seizure took place on the appellant. The declaration of share t....
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....he appellant as unexplained/undisclosed. The amount declared by the appellant has been taxed at normal rates as normal income. Similarly cash transaction of Rs. 79,50,000/- declared by the appellant it ITR was accepted and was taxed at normal rates and no seized material / incriminating document was referred by the AO either in assessment order or penalty order to establish that it was undisclosed income of the appellant. The disclosed income as per provisions of section 271AAB is defined as under: "(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 o....
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.... of section 271AAB. As the transactions pertain to F.Y. 2020-21 and appellant had declared them in ITR as income from share trading and cash receipts and they were accepted by the AO, it cannot be held to "undisclosed income" in terms of section 271AAB. Therefore, penalty u/s 271AAB(1A) held to be not sustainable and is deleted." 6. Aggrieved, the Revenue is in appeal before us by raising following grounds of appeal :- "1. Whether in the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts in deleting the penalty u/s 271 AAB of the Act. 2. Whether in the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts in deleting the penalty u/s 271 AAB of the Act of amounti....
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....ndisclosed income. Accordingly, he supported the penalty levied in this case by the Assessing Officer. 8. On the other hand, ld. AR for the assessee brought to our notice page 13 of the assessment order and submitted that the Assessing Officer had merely made addition of Rs. 2,27,000/- u/s 50C of the Act after accepting the return of income filed by the assessee. He submitted that the Assessing Officer has completed the assessment only on the basis of return of income filed by the assessee and he proceeded to impose the penalty of Rs. 24,53,100/- and in revision proceedings, he increased the quantum of penalty. He submitted that ld. CIT (A) has discussed the issue under consideration in detail. He brought to our notice the findings of th....
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....the assessee does not fall within the definition of undisclosed income u/s 271AAB of the Act and there is no material with the Assessing Officer that the abovesaid income is linked to the incriminating document found during the search. Ld. CIT (A) observed that the Assessing Officer did not bring on record any seized material found during the search to substantiate his finding that assessee had taken bogus LTCG and unexplained cash transactions. We are in agreement with the ld. CIT (A) that the additional income disclosed by the assessee in the return of income should be corroborated with the incriminating material found during the search. The Assessing Officer has not linked the additional income disclosed by the assessee with the material....