Case Law Details
Ajanta Pharma Limited Vs The DCIT (ITAT Mumbai)
The issue under consideration is whether the penalty levied u/s 271AAB of the Act is justified on Income voluntarily admitted during Search by Appellant?
The assessee is engaged in the business of manufacturing, marketing and export of pharmaceutical products and is assessed to tax regularly. A search action u/s 132 of the Act was carried out at the Offices, Factories, and R&D Centre of the assessee. During the course to search action, the assessee declared unaccounted additional income under section 132(4) of the Act on the following issues. Assessee during course of search in the statement recorded under section 132(4) offered certain expenses for disallowance, AO framed assesment under section 153A and made disallowance. Also, AO levied penalty under section 271AAB.
ITAT states that it is not coming out that the alleged undisclosed income is false claim of deduction or claim of income is false or claim of expenditure is false. The definition provided in section 271AAB of undisclosed income clarifies that any income of the specified previous year represented either wholly or partly by any entry represented in respect of expense recorded in the books of accounts maintained in the normal course of business should found to be false or would not have been found to be so had the search not being conducted. ITAT noted that the aforesaid expenses have not been found to be false or it is not a case of the Revenue that such expenses are not allowable under the provisions of the Act. Here the simplicitor case is that the assessee during the course of search in the statement recorded under section 132(4) of the Act admitted this to be the income to avoid litigation and to buy peace of mind. It is good piece of evidence for making assessment but not for levy of penalty under section 271AAB of the Act because for levy of penalty falsity of the expense is a pre-requisite under the provision. Hence, ITAT delete the penalty and allow the appeal of the assessee on merits.
FULL TEXT OF THE ITAT JUDGEMENT
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
