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DCIT vs. Amit Agarwal

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6 months 1 week ago #5100 by amit
DCIT vs. Amit Agarwal was created by amit
Section - 274, 271AAB, 44AA, 44AE, 44BB, 44BBB, 44AD, 14
Order Date - 14-03-2018
Favouring - Assessee
Court - Tribunal Kolkata
Appellant - DCIT
Respondent - Amit Agarwal
Justice - Aby. T. Varkey, JM & M.Balaganesh, AM
Citation - 318Taxpundit200
Appeal No. - I.T.A No. 1471/Kol/2015
Asstt. Year - 2013-14

Order

PER : Aby. T. Varkey

1. These appeals are filed by the revenue against the orders of Ld. CIT(A)-20, Kolkata dated 14.09.2015 for AY 2013-14 in the case of Shri Amit Agarwal, Shri Madan Lal Beswal and Shri Manoj Beswal, by which he deleted the penalty imposed u/s. 271AAB of the Income-tax Act, 1961 (hereinafter referred to as the “Act”).

2. Briefly stated facts are that there was a search and seizure operation in respect of Nezone Group of cases on 01.08.2012 and on subsequent dates; and the assessees before us are Shri Amit Agarwal, Shri Madan Lal Beswal and Shri Manoj Beswal who are one of the key persons of this group. In the penalty order, the ld AO notes that during the course of post search operation, the assessees admitted an undisclosed income of Rs.3,00,00,000/- for the AY under consideration in the form of commodity profit vide a consolidated disclosure petition filed by Shri Manoj Beswal, Chairman of Nezone Group. The details of returns filed by the assessee are as under which has been acknowledged by the ld AO in his order :-

Shri Amit Agarwal – ROI filed on 30.9.2013 disclosing total income of Rs 3,26,36,100/-.

Shri Madan Lal Beswal – ROI filed on 30.9.2013 disclosing total income of Rs 5,66,21,960/-.

Shri Manoj Beswal – ROI filed on 29.9.2013 disclosing total income of Rs 3,44,79,100/-.

According to ld AO, on verification of accounts, he noticed that the assessee for the relevant year disclosed a sum of Rs.3,00,00,000/- and had shown the same under the head “Income out of speculative business from sale of commodities”. Then the ld AO notes that the return was selected for scrutiny and assessment was completed u/s 143(3) of the Act on 29.08.2014 accepting the returned income and penalty proceedings were initiated u/s. 271AAB of the Act on the amount disclosed during search of Rs. 3 cr for the group as a whole and after serving the penalty notice u/s. 271AAB read with section 274 of the Act on the assessee on 05.09.2014. In response, the assessees submitted a written submission, which we note has been reproduced by the ld AO in the order passed u/s. 271AAB of the Act dated 24.02.2015. After considering the submission of the assessees, the ld AO imposed penalty u/s. 271AAB(1)(a) of the Act by observing that the entire undisclosed income can only be treated as arising out of documents/transactions/evidence found in the course of search u/s. 132 of the Act and the same was not entered in the books of account. Aggrieved, assessees preferred an appeal before the Ld. CIT(A), who deleted the penalty by observing as under:

“8. I have considered the finding of the AO in the penalty order and the written submission as well as oral submission made by the AR during the appellate proceedings. I find that the AO has arrived at the conclusion that had there been no search operation u/s. 132 of the I. T. Act, 1961, the assessee would not have disclosed income which was found recorded on papers and related documents in the office premises of the assessee (but not recorded in the regular books of accounts on day to day basis). The AO has not brought on record anything to prove the intention of the assessee to do so. On the other hand, the AR has emphasized that keeping papers/documents containing assessee’s income in the safe custody in the office premises shows that the assessee had no intention to conceal his income. The incidence of not making entries in the regular books of accounts on day to day basis is a bonafide mistake on the part of the accountant for which assessee could not be penalized. I think, there is no doubt that not making entries in the regular books of accounts of the income earned by the assessee, is a mistake on the part of the accountant . But for this, imposition of the penalty u/s. 271AAB of the I. T. Act, 1961, (in a situation when there was enough time late in the FY to make entries of such income in the regular books of accounts) is not justified. It is so, because it does not prove the guilty mind and intention to conceal the income on the part of the assessee. It also does not prove that had there been no search operation, the assessee would not have declared such income in the return of income. Accordingly, assessee’s appeal on grounds no. 1 and 2 are allowed.” Aggrieved, the revenue is in appeal before us.

3. We have heard rival submissions and gone through the facts and circumstances of the case. We find that the issue involved herein is squarely covered in favour of the assessee in the case of DCIT vs Manish Agarwala (another member in the same Nezone Group) in ITA No. 1479/Kol/2015 for AY 2013-14 dated 9.2.2018 by the order of this tribunal , wherein it was held as under:-

3. We have heard rival submissions and gone through the facts and circumstances of the case. We note that the AO has levied the penalty u/s. 271AAB on the ground that the income from commodity profit has been found during search u/s. 132 of the Act which is not reflected in the regular books of account. The AO has accepted that during search the assessee has admitted u/s. 132(4) of the Act the

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