VKJ Latest News Update

VKJ Law Offices of Vinay K. Jain Advocates & Solicitors

Penalty levied u/s 271AAB is sustainable if assessee admits to having undisclosed income from commission & brokerages and that discrepancies exist in books of accounts: ITAT

2019-TIOL-1484-ITAT-CHD

IN THE INCOME TAX APPELLATE TRIBUNAL
BENCH ‘B’ CHANDIGARH

ITA No.935/Chd/2018
Assessment Year: 2014-15

SH VISHAL SINGAL
712-B, AGGAR NAGAR, LUDHIANA
PAN NO: AQAPS6628L

Vs

DEPUTY COMMISSIONER OF INCOME TAX
CENTRAL CIRCLE-1, LUDHIANA

ITA No.936/Chd/2018
Assessment Year: 2014-15

SMT SUNITA SINGAL
629 B, AGGAR NAGAR, LUDHIANA

Vs

DEPUTY COMMISSIONER OF INCOME TAX
CENTRAL CIRCLE-1, LUDHIANA

Sanjay Garg, JM & Annapurna Gupta, AM

Date of Hearing: March 05, 2019
Date of Decision: April 30, 2019

Appellant Rep by: Shri Sudhir Sehgal, Adv.
Respondent Rep by: 
Shri Manjit Singh, Sr. DR

Income Tax – Sections 132 & 271AAB.

Keywords – Levy of penalty – Search – Undisclosed income.

search u/s 132(1) of the Act was conducted on the assessee. During assessment proceedings it was found that at the time of search proceedings the assessee had admitted undisclosed income amounting to Rs.10 lacs in the statement made u/s 132(4) of the Act. Penalty proceedings u/s 271AAB of the Act were therefore initiated and show cause notice u/s 274 r.w.s.271AAB of the Act was issued to the assessee. In response, the assessee submitted that it had filed its return of income disclosing total income of Rs.9,78,250/, which included surrendered income and which had been accepted as such. It was submitted that the assessee had substantiated the manner in which the undisclosed income had been earned and had also paid taxes on the same. It was further submitted that no valuable items had been found during search. It was thus contended that penalty proceedings initiated be therefore dropped. But the AO did not find the reply of the assessee tenable. He reproduced the provisions of section 271AAB of the Act and also the surrender letter giving the amount and basis of surrender of additional income during search. Referring to the same, the AO stated that it was clear from the same that the surrender was made to cover the discrepancy found in the seized documents during search and to cover any kind of discrepancy in the regular books of account and also income yet to be recorded in the books of account. He, therefore, held that the assessee’s case clearly fell under the provisions of section 271AAB(1)(a) of the Act and thus levied the penalty on the surrendered income @ 10%. On appeal, CIT(A), upheld the order of the AO.

On appeal, Tribunal held that,

Whether levy of penalty u/s 271AAB is justified if assessee has made specific admission of having undisclosed income relating to commission/brokerage and discrepancies in the books of accounts constitutes incriminating material representing undisclosed income – YES: ITAT

++ contention of the Counsel for the assessee, against the levy of penalty under section 271AAB of the Act, is that no incriminating material representing “undisclosed income” of the assessee was found during the course of search. But no merit was found in this contention of counsel for the assessee. The surrender letter of the assessee, admitting to the discrepancies in the books of account and certain entries not being recorded in the books, as also specific admission to the fact that the assessee had not disclosed the income relating to commission and brokerage, contradicts this contention of the Counsel for the assessee. In the surrender letter, the assessee has categorically admitted that there were discrepancies in respect of the books of account of the business maintained by him and there were certain entries which had not been recorded in the regular books of account for different Assessment Years and that the discrepancies related to the same nature of business as reflected in the regular books of account. Further, in the surrender letter the assessee has also specifically admitted that his income from commission and brokerage had remained undisclosed. The assessee had surrendered an amount of Rs.10 lakhs on account of these admitted undisclosed income and on account of discrepancies in the documents found during the search. The letter also mentions the nature of discrepancies found, being rough notings/estimates, other slips on account of sales, purchases outside the books of account, besides profit element on account of variation in the sale rates of flat, etc. Clearly, the surrender being so specific cannot not be said to be merely to buy peace of mind. Further, the assessee has never retracted the surrender so made; on the contrary, he has disclosed the amount surrendered as his business income in the return of income filed and accepted the assessment of the same as such, by the AO. All facts have remained uncontroverted. This specific unretracted admission of the assessee of earlier undisclosed income and discrepancies in the books of account, it was hold, is without any doubt the best piece of evidence against the assessee and is incriminating material enough representing undisclosed income for the purpose of levy of penalty under section 271AAB of the Act. The assessee had himself admitted to the fact of having not disclosed the income on account of brokerage and commission earned and had himself admitted to the fact that there were discrepancies and unrecorded entries in his books of account and also certain rough notings and estimates. Having himself admitted to all these facts and at no point of time having ever retracted this admission, the same constitutes incriminating material against the assessee and there was no further requirement for the Revenue in such circumstances to have unearthed evidence supporting this admission of the assessee;

++ reliance placed by the Counsel for the assessee on various case laws, are of no assistance since they are all distinguishable on facts. In none of the case laws the assessee had specifically admitted to earlier undisclosed income. In the case of Manish Aggarwal(supra),it was noted that the assessee was not engaged in any business or profession and was not required to maintain any books of accounts and the documents found during search disclosing speculative commodity transaction undertaken by the assessee which was surrendered,was held to be recorded in the “other documents” of the assessee and hence held to be not undisclosed income of the assessee as per the definition of the same in section 271AAB of the Act. In the case of S. Martin the surrender made by the assessee was found to be not admitted on the basis of any material,document and was just a general surrender, which therefore was not held to construe undisclosed income for the purposes of levy of penalty. Thus clearly none of the case laws are of any assistance to the assessee since in the impugned case the assessee has made specific admission of having undisclosed income relating to commission/brokerage and discrepancies in the books of accounts which has remained unretracted. It was decided to concur with the findings of the CIT(A) that the specific admission of the assessee to the undisclosed income and discrepancies in its accounts constituted incriminating material representing undisclosed income of the assessee for the purposes of levy of penalty under section 271AAB of the Act. Therefore, it was decided to uphold the order of the CIT(A) confirming the levy of penalty. The appeal filed by the assessee is dismissed.

Assessee’s appeal dismissed

ORDER

Per: Annapurna Gupta:

The present appeals have been filed by different assessees against the separate orders of the Commissioner of Income Tax (Appeals)-5, Ludhiana (in short ‘CIT(A)’ both dated 20.4.2018 confirming the levy of penalty u/s 271 AAB of the Income Tax Act, 1961 (hereinafter referred to as ‘Act’).

2. It was common ground that the issue involved in both the appeals was identical, relating to levy of penalty u/s 271AAB of the Act, subsequent to assessment framed in consequence to search carried out on Deepak Singal group of cases, which included both the assesses and it was contended that the facts leading to the levy of penalty in both the cases were identical. Therefore, both the appeals were taken up together and are being dealt with by way of this common consolidated order.

We shall first be dealing with the facts in the case of Vishal Singal Vs. DCIT in ITA No.935/Chd/2018.

ITA No.935/Chd/2018(Vishal Singal):

3. Brief facts relating to the case are that a search u/s 132(1) of the Act was conducted on the assessee on 20.3.2014. During assessment proceedings thereafter, it was found that at the time of search proceedings the assessee had admitted undisclosed income amounting to Rs.10 lacs in the statement made u/s 132(4) of the Act. Penalty proceedings u/s 271AAB of the Act were therefore initiated and show cause notice u/s 274 r.w.s.271AAB of the Act was issued to the assessee. In response, the assessee submitted that it had filed its return of income disclosing total income of Rs.9,78,250/, which included surrendered income and which had been accepted as such. It was submitted that the assessee had substantiated the manner in which the undisclosed income had been earned and had also paid taxes on the same. It was further submitted that no valuable items had been found during search. It was thus contended that penalty proceedings initiated be therefore dropped. The Assessing Officer(A.O) did not find the reply of the assessee tenable. He reproduced the provisions of section 271AAB of the Act and also the surrender letter giving the amount and basis of surrender of additional income during search. Referring to the same, the A.O. stated that it was clear from the same that the surrender was made to cover the discrepancy found in the seized documents during search and to cover any kind of discrepancy in the regular books of account and also income yet to be recorded in the books of account. He, therefore, held that the assessee’s case clearly fell under the provisions of section 271AAB(1)(a) of the Act and thus levied the penalty accordingly on the surrendered income @ 10% thereof, which amounted to Rs.1 lac.

4. The assessee went in appeal before the CIT(A), who upheld the order of the A.O.

5. Aggrieved by the same, the assessee has come up in appeal before us, raising the following grounds:

“1. That the Ld. Commissioner of Income Tax (Appeals) has erred in confirming the levy of penalty u/s 271AAB r.w.s. 274 of the Income Tax Act, 196,1 amounting to Rs. 1,00,000/-

2. That the confirmation of penalty is against the facts and circumstances of the case.

3. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off.”

6. During the course of hearing before us, the Ld. counsel for assessee reiterated the contentions made before the lower authorities. The Ld. counsel for assessee contended that there was no undisclosed income, as defined in section 271AAB of the Act and, therefore, no penalty could be levied. The Ld. counsel for assessee drew our attention to the definition of the undisclosed income in Explanation to section 271AAB of the Act as under:

“271 AAB : –

Explanation.-For the purposes of this section,-

(a) xxxx

(b) xxxx

(i) xxxx

(ii) xxxx

(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 other documents or transactions found in the course of a search under section 132, which has-

(A) not been recorded on or before the date of search in the books of account or other documents maintained in the normal course relating to such previous year; or

(B) otherwise not been disclosed to the [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner before the date of search; or

(ii) any income of the specified previous year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the specified previous year which is found to be false and would not have been found to be so had the search not been conducted.]”

7. Referring to the same, the Ld. counsel for assessee contended that the undisclosed income meant any income which was represented by any asset found during the course of search or any entry in the books of account or other documents, which has not been recorded before the date of search or not disclosed earlier to the Principal, Chief Commissioner or Commissioner of Income Tax Act. The Ld. counsel for assessee contended that some incriminating material representing earlier undisclosed income of the assessee ought to have been found during the course of search which would qualify as “undisclosed income” for the purpose of levy of penalty u/s 271AAB of the Act. The Ld. counsel for assessee contended that in case of the assessee there is no reference to any document or asset found during the course of search either in the assessment order or in the penalty order and, therefore, there was no case of levy of penalty at all. The Ld. counsel for assessee contended that as per the definition of undisclosed income, if any entry is found to be false, the same also qualifies as undisclosed income but even that has not been found in assessee’s case. The Ld. counsel for assessee relied upon the following case laws in support of his contention that in the absence of any undisclosed income no penalty u/s 271AAB was leviable:

1. DCIT Vs. Hari Singh, ITA No.598/CHD/2017 CHD-TRIB

2. DCIT Vs. Manish Agarwal, ITA No.1479/KOL/2015 KOL-TRIB

3. DCIT Vs. Amit Agarwal, ITA No.1471/KOL/2015 KOL-TRIB

4. ACIT Vs. S.Martin, ITA No.2382/CHENY/2016 CHENAI-TRIB = 2018-TIOL-2454-ITAT-MAD

5. DCIT Vs. M/s Aryan Mining & Trading Corporation Ltd., ITA No.1601/KOL/2017 KOLTRIB = 2019-TIOL-535-ITAT-KOL

6. DCIT Vs. Rashmi Cement Ltd., IT A No.1606/Kol/2017 KOL-TRIB

7. DCIT Vs. Rashmi Metaliks Ltd., IT A No.1608/Kol/2017 KOL-TRIB

8. The Ld. DR at this juncture countered by drawing our attention to the surrender letter of the assessee reproduced in the penalty order as under:

The Joint/Additional Director of Income TaxDt. 11-4-2014
(Inv.), Ludhiana 

Sir,

Re: Search and seizure operations at the residential and business premises of M/s Deepak Builders and other Group of Cases.

This has a reference to the search and seizure operations carried out by the department on 20,03.2014 at the various business premises of M/s Deepak Builders Group of Companies and residential premises of the Directors/Partners. During the course of search, certain discrepancies were there in the cases of Deepak Builders.and other Companies, Partnership Firms and Individuals cases of (Group; These discrepancies were in respect. of; the books of accounts of the business maintained by the assessee and also, there were certain entries which had not yet been recorded in the regular books of account for the different Assessment Years. The-said discrepancies relate to the same nature of business as reflected in the regular books of accounts arid otherwise and is a part and parcel of the same business activity as reflected in the return of income filed with the Department and in order to cover such discrepancies and others, we hereby offer a sum of Rs. 23 crores (Rupees twenty Three Crores Only) as additional income as declared in the return of income already filed with the Department over and above the regular income and the said income has been derived from the same source.. We.had already given an offer of surrender of Twenty Three Crores in the group as a whole and, now, in this letter, the offer remains the same and also persons in whose hands the amount has been offered are also the same but there are some adjustments and, now, the head-wise bifurcation after examination the seized documents, the amount offered as business income from the business activities is as under.-

S.No.Name of the Concern/IndividualAssessment YearAmount SurrenderedBasis
1.M/s Deepak Builders2014-15
2013-14
14,02,00,000.00
21,00,000.00
Offered as Business income to cover any discrepancies in the seized documents as found and seized during the course of search and also to cover any kind of discrepancy in the regular books of account and the above income was earned in the same manner as stated above as per regular books of account and that income is yet to be recorded in the books of account. The above income is reflected in various expenses i.e. payment of labour expenses etc. and other seized records and any kind of profit element found during the course of search. The income for the Assessment Year 2013-2014 is being offered subject to no penalty U/s 271(1)(c) of the Income Tax Act, 1961 and the same may please be accepted.
2.Sh Deepak Singal2014-15
2013-14
2012-13
2011-12
2009-10
2008-09
6,70,00,000.00
10,00,000.00
16,00,000.00
60,00,000.00
60,00,000.00
21,00,000.00
Offered as Business’ income to cover any discrepancies in the seized documents as found and seized during the course of search as per various Annexure and for any kind of discrepancy in the regular books of accounts and the above income was earned in the same manner as reflected in my return of income. The above income is reflected in various personal assets including amount spend on construction, cash and to cover any investment in the immovable/moveable asset. The income for the Assessment Year 2008-2009 to 2013-2014 is being offered subject to no penalty U/s 271(1)(c) of the Income Tax Act, 1961 and the same’ may please be accepted.
3.Smt. Sunita Singal2014-1515,00,000.00Offered income earned from sale or purchase of property and the same income reflected in construction/invest merit to immovable assets and to cover any other asset or, documents as found during the course of search and jewellery, cash etc. and other misc. activities.
4.Sh.Kamal Singal2014-1515,00,000.00To cover all the documents as found during the course of search and the income has been derived from commission/brokerage from property dealing.
5.Sh.Vishal Singal2014-1510,00,000.00To cover all the documents as found during the course of search and the income has been derived from commission/ brokerage from property dealing.

2. It is pertinent to mention here that there was a. survey operation on the business premises of the assesses on 8,1,2010 i.e. in the Assessment Year 2010-2011 and during the course of survey the assessee had made a surrender of Rs.4 Crores (Rs. 3 Crores in the case of M/s Deepak Builders and Rs.1 Crore in the case of Shri Deepal Singal, Proprietor M/s Deepak Buildcon). The above surrender in the case of M/s Deepak; Builders of Rs.3 Crores covers all the loose documents or any kind Of implication of income in the seized documents for the Assessment Year 2010-11 as found during the course of search, if any and Rs.1 Crore in the case of Shri Deepak Singal Proprietor M/s Deepak Buildcon covers the cash received on account of the sale of flats over and above the amount reflected in the books of account for the Assessment Years 2009-010 arid 2010-2011. The assesses Shri Deepak Singal had been earned the income on account of the sale of flats and the same income as offered during the course of survey had been reflected in the cash, recoverable and amount spends in the, construction of flats. The copy of the statement as recorded during the course of survey is being enclosed herewith for your ready reference.

3. The above amount as offered are tentative and subject to change any time during proceeding before your goodself and also filing Of the return U/s 153A but offer will remain the same and covers all the issues as per seized record or any kind of discrepancy in the regular books of account or otherwise and is the, business income of the assessee. The above offer also covers the! rough notings/estimates and other slips on account of sales, purchases outside the books of accounts, besides, profit element on account of variation in the Sale Rates of Rats etc. and to cover other discrepancies.

4. The above offer in, the different years as mentioned above is being made as per the provisions of income Tax Act and this offer is being made Subject to no penalty u/s 271AAA/ 271AAB/271(1)(c) and prosecution and the above income shall be declared by our group concerns in respective years. While filing the return in the relevant years over and above.

9. Referring to the same the Ld. DR pointed out that the assessee had surrendered an amount o Rs.10 lacs in his case and as per the surrender letter it was on account of discrepancy in the books of account of the business of the assessee and certain entries not recorded in the regular books of account which were noted during search. The Ld. DR pointed out that the assessee had even stated in the surrender letter that it had derived income from commission/brokerage from property on account of which the surrender had been made. Our attention was drawn to para-1 of the surrender letter pointing out that the above facts had been stated therein. The Ld. DR thereafter drew our attention to para-3 of the letter pointing out that the assessee had reiterated the fact that the surrender was being made on account of discrepancies in the seized records and other documents found during the course of search including rough notes/assessments and other slips on account of sales, purchases outside the books of account and other discrepancies. The Ld.DR therefore, stated that the contention of the Ld. counsel for assessee that no incriminating material was found during the course of search which related to the surrender made was factually incorrect. The Ld. DR further relied upon the findings of the Ld.CI T(A) at para 4.1 of his order as under:

“The facts of the case, the order of the AO imposing the penalty and the arguments of the AR during appellate proceedings have been considered. The AR has repeated the contentions which were raised before the AO. It is fairly conceded by the AR that in the present case provisions of Section 271AAA are not applicable and now the case is governed by the provisions of Section 271AAB. For deciding the issue and to have clarity in the matter the provisions of Sections 271AAB which are applicable to the present case under consideration are reproduced below.

“271AAB. (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 July, 2012, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him,-

(a) a sum computed at the rate of ten per cent of the undisclosed income of the specified previous year, if such assessee-

(i) in the course of the search, in a statement under subsection (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been derived;

(ii) substantiates the manner in which the undisclosed income was derived; and

(iii) on or before the specified date-

(A) pays the tax, together with interest, if any, in respect of the undisclosed income; and

(B) furnishes the return of income for the specified previous year declaring such undisclosed income therein;

(b) a sum computed at the rate of twenty per cent of the undisclosed income of the specified previous year, if such assessee-

(i) in the course of the search, in a statement under subsection (4) of section 132, does not admit the undisclosed income; and

(ii) on or before the specified date-

(A) declares such income in the return of income furnished for the specified previous year; and

(B) pays the tax, together with interest, if any, in respect of the undisclosed income;

(c) a sum which shall not be less than thirty per cent but which shall not exceed ninety per cent of the undisclosed income of the specified previous year, if it is not covered by the provisions of clauses (a) and (b).

(2) No penalty under the provisions of clause (c) of sub-section (1) of section 271 shall be imposed upon the assessee in respect of the undisclosed income referred to in sub section (1).

(3)…

As admitted by the AR also, that the income of Rs. 10,00,000/- was surrendered during the search. Regarding the basis it was admitted (as per the surrendered letter reproduced by the AO in the penalty order) by the assessee that cover all the documents as found during the course of search and the income has been derived from commission/brokerage from property dealing”. The AO has rightly mentioned that in this case the income of Rs. 10,00,000/- was disclosed by the assessee in the return of income and the same was not disclosed to the Department till the search action. The assessee has surrendered this amount under section 132 on 11.04.2014. Therefore, provisions of section 271AAB are applicable. It is also not in dispute that the case of the assessee is covered under sub-section (l)(a) of Section 271AAB as the assessee has paid the tax along with the interest and disclosed the amount in the return. The language of the Section is very clear and unambiguous that in a case where the assessee admits the undisclosed income under Section 132(4), then the assessee shall pay penalty equal to 10% of the undisclosed income. In view of the above provisions of law, the penalty imposed by the AO in this case is found as per law and hence sustained.

Accordingly, these grounds of appeal are dismissed.”

10. We have heard the contentions of both the parties and perused the orders of the authorities below. The sole contention of the Ld. Counsel for the assessee, against the levy of penalty under section 271AAB of the Act, is that no incriminating material representing “undisclosed income” of the assessee was found during the course of search. We do not find any merit in this contention of the Ld. Counsel for the assessee.

11. The surrender letter of the assessee, admitting to the discrepancies in the books of account and certain entries not being recorded in the books, as also specific admission to the fact that the assessee had not disclosed the income relating to commission and brokerage, contradicts this contention of the Ld. Counsel for the assessee. In the surrender letter, as reproduced in the earlier part of this order, the assessee has categorically admitted that there were discrepancies in respect of the books of account of the business maintained by him and there were certain entries which had not been recorded in the regular books of account for different Assessment Years and that the said discrepancies related to the same nature of business as reflected in the regular books of account. Further, in the surrender letter the assessee has also specifically admitted that his income from commission and brokerage had remained undisclosed. The assessee had surrendered an amount of Rs.10 lakhs on account of these admitted undisclosed income and on account of discrepancies in the documents found during the search. The letter also mentions the nature of discrepancies found, being rough notings/estimates, other slips on account of sales, purchases outside the books of account, besides profit element on account of variation in the sale rates of flat, etc. Clearly, the surrender being so specific cannot not be said to be merely to buy peace of mind. Further, the assessee has never retracted the surrender so made; on the contrary, he has disclosed the amount surrendered as his business income in the return of income filed and accepted the assessment of the same as such, by the A.O. All the above facts have remained uncontroverted before us. This specific unretracted admission of the assessee of earlier undisclosed income and discrepancies in the books of account, we hold, is without any doubt the best piece of evidence against the assessee and is incriminating material enough representing undisclosed income for the purpose of levy of penalty under section 271AAB of the Act. The assessee had himself admitted to the fact of having not disclosed the income on account of brokerage and commission earned and had himself admitted to the fact that there were discrepancies and unrecorded entries in his books of account and also certain rough notings and estimates. Having himself admitted to all these facts and at no point of time having ever retracted this admission, the same constitutes incriminating material against the assessee and there was no further requirement for the Revenue in such circumstances to have unearthed evidence supporting this admission of the assessee.

12. The reliance placed by the Ld.Counsel for the assessee on various case laws,we find are of no assistance since they are all distinguishable on facts. In none of the case laws the assessee had specifically admitted to earlier undisclosed income. In the case of Hari Singh (supra) penalty levied u/s 271 AAB of the Act, on addition made on account of difference in valuation of jewellery was deleted holding that the difference in value of Rs.1.3 lacs on valuation of Rs.1.2 crores was not unnatural and could be on account of difference of opinion and was therefore not in the nature of undisclosed income of the assessee. In the case of Manish Aggarwal(supra),it was noted that the assessee was not engaged in any business or profession and was not required to maintain any books of accounts and the documents found during search disclosing speculative commodity transaction undertaken by the assessee which was surrendered,was held to be recorded in the “other documents” of the assessee and hence held to be not undisclosed income of the assessee as per the definition of the same in section 271AAB of the Act. In the case of S. Martin (supra) the surrender made by the assessee was found to be not admitted on the basis of any material,document and was just a general surrender, which therefore was not held to construe undisclosed income for the purposes of levy of penalty. In the case of Rashmi Cement(supra) it was noted that the surrender made was suo moto, general,to buy piece of mind and not based on any material. In such circumstances it was held that the surrender did not in itself constitute incriminating material/undisclosed income of the assessee. The facts leading to the deletion of penalty in the case of Rasmi Metaliks(supra) we find are identical to that in the case of Rashmi Cements (supra). Thus clearly none of the case laws are of any assistance to the assessee since in the impugned case the assessee has made specific admission of having undisclosed income relating to commission/brokerage and discrepancies in the books of accounts which has remained unretracted.

13. In view of the above, we concur with the findings of the Ld. CIT(A) that the specific admission of the assessee to the undisclosed income and discrepancies in its accounts constituted incriminating material representing undisclosed income of the assessee for the purposes of levy of penalty under section 271AAB of the Act. We, therefore, uphold the order of the Ld. CIT(A) confirming the levy of penalty.

In view of the above the appeal filed by the assessee is dismissed.

14. Now, taking up the appeal of the assessee in ITA No.936/CHD/2018, the facts of the case we find are identical, with the assessee, Smt. Sunita Singal, also being one of the persons searched in the Deepak Singal group of cases and the assessee having surrendered an amount of Rs.15 lakhs during the course of search, on which penalty under section 271AAB of the Act was levied. The arguments of the Ld.Counsel for the assessee, against levy of penalty were identical as in the case of Sh. Vishal Singal in ITA No.935/CHD/2018dealt with us above, that no incriminating material representing undisclosed income was found during the course of search.

15. In this case, we have noted from the surrender letter of the assessee reproduced above in para, that the surrender of Rs.15 lakhs was identical as in the case of Vishal Singal in ITA No.935/CHD/2018 to cover all documents found during the course of search and to cover the income derived from sale or purchase of property, which remained undisclosed earlier and the same reflected in construction/investment in immovable assets. Since the facts leading to levy of penalty in the present case are identical to that in the case of the assessee in ITA No.935/CHD/2018 and the arguments of the assessee against the same are also identical, our decision rendered in the case of the assessee in ITA No.935/CHD/2018 will squarely apply to the present case also, following which we uphold the order of the Ld. CIT(A) confirming the levy of penalty under section 271AAB of the Act, amounting to Rs.1.50 lakhs. The appeal of the assessee is accordingly dismissed.

16. In the result, both the appeals of the assessee are dismissed.

Order pronounced in the Open Court.

Leave a Reply

Close Menu
%d bloggers like this: