The Tax Publishers2019 TaxPub(DT) 3754 (Jp-Trib)

INCOME TAX ACT, 1961

Section 271AAB, Expln. Clause (c)

When assessee was not required to maintain books of account as per section 44AA, then it was required to be examined as to whether alleged undisclosed income was recorded in other documents maintained in normal course as per clause (c) to Explanation to section 271AAB. Undisputedly alleged income was found recorded in diary which was nothing but other record maintained in normal course, thus same would not fall in the definition of undisclosed income. Once said income was found as recorded in other documents maintained in normal course, then it could be presumed that assessee would not have disclosed the same in return of income to be filed after about one year from the date of search. Hence, in view of facts and circumstances of the case, penalty levied under section 271AAB was not sustainable.

Penalty under section 271AAB - Leviability - Applicability of clause (c) of Expln. to section 271AAB -

Assessee was an Individual and was not maintaining regular books of account. Search was conducted at the premises of assessee. Assessee in his statement recorded under section 132(4) has disclosed an income of Rs. 10 crores in pursuant to the entries of advances given for purchase of land recorded in pocket diary which was found and seized during search. AO treated the same as undisclosed income of assessee and accordingly levied penalty under section 271AAB. Held: When assessee was not required to maintain books of account as per section 44AA, then it was required to be examined as to whether alleged undisclosed income was recorded in other documents maintained in normal course as per clause (c) to Explanation to section 271AAB. Undisputedly alleged income was found recorded in diary which was nothing but other record maintained in normal course, thus same would not fall in the definition of undisclosed income. Once said income was found as recorded in other documents maintained in normal course, then it could be presumed that assessee would not have disclosed the same in return of income to be filed after about one year from the date of search. Hence, in view of facts and circumstances of the case penalty levied under section 271AAB was not sustainable.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2015-16



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