URMILA JHUNJHUNWALA,MUMBAI vs. ACIT, CENT. CIR. - 7(1) (EARSTWHILE C.C. -40), MUMBAI

Deputy Commissioner of Income Tax, Central Circle-40, Mumbai u/s 143(3) read with Section 153A of the Income Tax Act,1961 on 12/03/2014 whereas the impugned penalty u/s 271AAA was levied by Ld. Assistant Commissioner of Income Tax, Central Circle-40 on 29/09/2014. The assessee has been saddled with penalty of Rs.66,700/- against quantum additions of Rs.66.70 Lacs, which upon confirmation by Ld. CIT(A), is being contested before us.

The material on record reveal that the assessee namely Smt. Urmila Jhunjhunwala has expired on 10/07/2017 and the deceased assessee has been substituted by her legal heir, Shri R.K.Jhunjhunwala. Revised Form No. 36, reflecting aforesaid change, has been filed by the legal heirs. Finding the same in order, we proceed to dispose-off the appeal after appreciating the arguments of respective representatives as pleaded before us.

Pursuant to search & seizure action u/s 132 on 29/08/2011, the assessee offered returned income of Rs.77.19 Lacs which included additional income of Rs.66.67 Lacs as offered by the assessee during search proceedings to account for unaccounted Gold / Silver / Diamond Jewellery etc. The returned income has been accepted as such barring an amount of Rs.3,000/- which represent difference in additional income as offered by assessee during search proceedings and as offered by her in the return of income.

Consequently, penalty proceedings u/s 271AAA were initiated against the quantum additions and the assessee has been saddled with impugned penalty of Rs.66,700/- primarily on the ground that no documentary evidences could be submitted by the assessee to prove the source of additional income offered during search proceedings. The penalty, upon confirmation by Ld. first appellate authority, is under appeal before us.

We have carefully considered the rival contentions and perused relevant material on record. At the outset, it is noted that the additional income which was the subject matter of imposition of penalty was Rs.66.70 Lacs and the quantum of penalty computed @10% of the same comes to Rs.6.67 Lacs as against Rs.66,700/- as computed by Ld. AO and the same bears computational error. However, we are not concerned with the same, at the moment.

It is undisputed fact that the additional income as offered by the assessee in the search proceedings has been included in the return of income filed by her in response to notice u/s 153A and the same has also been accepted by the revenue. It is also undisputed fact that the assessee has already paid the due taxes on the additional income. Therefore, the only requirement left to come under the shelter provided by Section 271AAA was the manner of derivation of undisclosed income. The assessee has attributed the same to her past savings and submitted that the jewellery was re-make of the old jewellery, the documentary evidences of which could not be submitted by her due to old age etc. Keeping in view the profile of the assessee including the fact the assessee was 79 years old at the time of search, we find the explanation to be plausible one and concur with the stand of Ld. AR that the assessee stood benefitted by the shelter provided by law under Section 271AAA. Therefore, keeping in view overall factual matrix, we are inclined to delete the impugned penalty. We order so.

Resultantly, the assessee’s appeal stands allowed. Order pronounced in the open court on 10th October, 2018. Sd/- Sd/- (Saktijit Dey) (Manoj Kumar Aggarwal) �ाियक सद� / Judicial Member लेखा सद� / Accountant Member मुंबई Mumbai; िदनांक Dated :10.10.2018 Sr.PS:-Thirumalesh आदेश की �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ�/ The Appellant 1. ��थ�/ The Respondent 2. आयकरआयु�(अपील) / The CIT(A) 3. आयकरआयु�/ CIT– concerned 4. िवभागीय�ितिनिध, आयकरअपीलीयअिधकरण, मुंबई/ DR, ITAT, Mumbai 5. गाड�फाईल / Guard File 6.