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| The Tax Publishers2021 TaxPub(DT) 0742 (Jp-Trib) INCOME TAXA CT, 1961
Section 271AAB
An advance represents an outflow of funds and what has been envisaged by the legislature while defining 'undisclosed income' in section 271AAB is an inflow of funds which has not been recorded in the books of account or other documents on or before the date of search and not an outflow of funds, accordingly, cash advances did not satisfy the requirement of undisclosed income as so defined under section 271AAB and, therefore, no penalty was leviable.
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Penalty under section 271AAB - Leviability - Undisclosed advances admitted during search - Advanced made by assessee and not recorded
During the course of search, assessee admitted undisclosed cash advances amounting to Rs. 37 lakhs. AO levied penalty under section 271AAB as regards thereto. Held: An advance represents an outflow of funds and what has been envisaged by the legislature while defining 'undisclosed income' in section 271AAB is an inflow of funds which has not been recorded in the books of account or other documents on or before the date of search and not an outflow of funds. Further, the deeming fiction so envisaged in sections 69 and 69B cannot be extended and applied automatically in context of section 271AAB which contains a specific definition of undisclosed income. Accordingly, cash advances did not satisfy the requirement of undisclosed income as so defined under section 271AAB and, therefore, no penalty was leviable.
Followed:Rajendra Kumar Gupta v. Dy. CIT [ITA No. 359/JP/2017, dt. 18-1-2019] : 2019 TaxPub(DT0 3753 (JP-Trib) and Suraj Mal Bansal HUF & Ors. v. Dy. CIT [ITA No. 14/127/JP/18, dt. 8-4-2019]
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2015-16
INCOME TAX ACT, 1961
Section 271AAB
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