The Tax Publishers2020 TaxPub(DT) 3994 (Jp-Trib)

INCOME TAX ACT, 1961

Section 271AAB(1)(c)

Where undisclosed investment made by assessee by way of advance for purchase of land could not be said to qualify as an undisclosed income in the context of section 271AAB read with the Explanation thereto, the penalty levied under section 271AAB(1)(c) would not be sustainable.

Penalty under section 271AAB(1)(c) - Leviability - Undisclosed investment in purchase of land -

During course of search in case of assessee, certain loose papers were found and seized, which contained list of advances given by the assessee for purchase of a land. Assessee owned those advances given as his undisclosed income under section 132(4) and paid tax thereon. AO imposed penalty under section 271AAB(1)(c) on such undisclosed income and on certain other disallowances made by him. Held: What had been found during the course of search, was certain entries relating to undisclosed investment in purchase of land. Besides, said entries, there were no other document in terms of any agreement to sell, the description of the property which had been found during the course of search. As per the definition of 'undisclosed income' under section 271AAB, the undisclosed investment in purchase of land cannot be stated to be income which is represented by any money, bullion, jewellery or other valuable article or thing. Where a specific definition of 'undisclosed income' has been provided in section 271AAB, being a penal provision, the same must be strictly construed and in the light of satisfaction of conditions specified therein. In light of the same, the undisclosed investment by way of advance for purchase of land could be subject matter of addition in the quantum proceedings, however the same could not be said to qualify as an undisclosed income in the context of section 271AAB read with the Explanation thereto and hence, penalty levied under section 271AAB(1)(c) on such undisclosed income was set aside. However, the penalty levied in respect of certain other disallowances made by the AO was confirmed.

Distinguished:PCIT v. Sandeep Chandak (2017) 93 Taxmann.com 405 (All) : 2017 TaxPub(DT) 5170 (All-HC)

REFERRED : Raja Ram Maheshwari v. DCIT (ITA No. 992/JP/2017 dated 10-1-2019) : 2019 TaxPub(DT) 3752 (Jp-Trib)

FAVOUR : Partly in favour of assessee

A.Y. : 2014-15

IN THE ITAT, JAIPUR BENCH

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