INCOME TAX ACT, 1961

Section 271AAB

Penalty under section 271AAB - Leviability - Documents found during search forming part of documents maintained in regular course of business -

During search, certain loose papers and documents were seized which inter alia contained details of commodity dealings by assessee. With reference to these loose documents, assessee admitted before the investigating authorities that they represented his income aggregating to Rs. 1,49,76,784 for the relevant previous year and therefore, offered the same to tax in the relevant assessment year 2013-14. In consonance with his statement so recorded under section 132(4), assessee disclosed income derived from these transactions under the head 'Income from other sources' in return of income filed for the relevant assessment year 2013-14. AO held that assessee's case squarely fell within the ambit of section 271AAB and, therefore, AO levied penalty on the ground that assessee had failed to substantiate the manner in which income was derived by him. Assessee contended that income of assessee by way of profit derived from commodity dealings, etc., did not constitute 'undisclosed income' defined in Explanation (c) to section 271AAB. Held: Pages 3 to 9 'DKM'-4' was the clinching incriminating document forming basis of AO holding that same represented undisclosed income under section 271AAB, Explanation (c). AO failed to dispute that all these documents formed part of assessee's books of account/documents maintained in the regular course of business. It, therefore, did not satisfy the statutory condition of 'has not been recorded on or before the date of search'. Accordingly, no penalty was leviable under section 271AAB.

Relied:Asstt. CIT v. Smt. Tanuja Mantri, ITA 2280-2281/Kol/2018 dated 15-11-2019.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14 & 2014-15

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