ROSY BLUE (INDIA) PRIVATE LIMITED,MUMBAI vs. DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE- 8(3), MUMBAI, MUMBAI

ITA 3351/MUM/2026Status: DisposedITAT Mumbai17 September 2026AY 2012-1311 pages
AI SummaryAllowed

What were the facts?

During a search, a discrepancy of 60.11 carats of polished diamonds was found between physical stock and book stock. The Assessing Officer added this discrepancy to the assessee's income and initiated penalty proceedings under Section 271AAA.

What did the Tribunal hold?

The Tribunal held that for penalty under Section 271AAA, the Assessing Officer must provide evidence that the stock was sold and the sale consideration was not recorded. Mere presumption that unrecorded stock must have been sold is insufficient, and the penalty provisions must be strictly construed.

What were the issues?

Whether a discrepancy in physical stock compared to book stock, without further evidence of sale, constitutes 'undisclosed income' for the purpose of levying penalty under Section 271AAA.

Which sections of the Income-tax Act were involved?

Section 271AAA,Section 132(4A)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH; MUMBAI

Hearing: 22.06.2026Pronounced: 17.09.2026

PER VIKRAM SINGH YADAV, A.M :

This is an appeal filed by the Assessee against the order of the Learned Commissioner of Income Tax (Appeals)- 50, Mumbai [‘Ld.CIT(A)’], dated 24.02.2026, pertaining to Assessment Year (AY) 2012-13, wherein the Assessee has taken the following grounds of appeal:

“1. The learned Commissioner of Income-tax (Appeals) erred in confirming validity penalty order dated 22nd June 2023 which was barred by limitation and is bad in law.

2.

The learned Commissioner of Income-tax (Appeals) erred in confirming levy of penalty of Rs. 1,39,153/- u

The order continues below.

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