Case Law Details
Shri Padam Chand Pungliya Vs ACIT (ITAT Jaipur)
Conclusion: Penalty under section 271AAB could not be imposed on assessee as old jewellery found in the locker of assessee and family members could not be treated as undisclosed for the purpose of levying penalty.
Held: Department recovered some jewellery from assessee during the course of search proceedings and brought the same under the head ‘undisclosed income’ by observing that it represented the bullion and valuable articles and in the absence of the same found recorded in the books of account of assessee it was undisclosed income as per the definition provided under section 271AAB. Accordingly, penalty under said provision was levied. It was held once the jewellery was not found to be purchased during the year under consideration, then the same could not be treated as an undisclosed income for the year under consideration which was specified previous year. The jewellery belonged to the family members of assessee and found in the locker was old jewellery and, therefore, the valuation of the jewellery for the purpose of computing the undisclosed income by applying the current rates on the gross weight was not permissible. Hence when the department had not made any efforts to ascertain the year of acquisition of the jewellery and then to apply the rates as prevailing in the year of acquisition and some of the jewellery even not acquired by the assessee or the family members but was inherited, then the manner in which the disclosure was obtained on account of the jewellery would not represent the undisclosed income as defined in the explanation to section 271AABt. Therefore, the personal jewellery of assessee and family members acquired in the past and some part of which was also inherited would not fall in the ambit of undisclosed income. Hence the penalty levied by AO against such disclosure was not sustainable.
FULL TEXT OF THE ITAT JUDGMENT
This appeal by the assessee is directed against the order dated 22th November, 2017 of ld. CIT (A)-4, Jaipur arising from the penalty order passed under section 271AAB of the IT Act for the assessment year 2014-15. The assessee has raised the following grounds :-
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