TaxTMI 
TaxTMI 
2014 (10) TMI 494
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....ich such income has been derived (III) The Assessee has also substantiates the manner in which the undisclosed income was derived by way of furnishing cash book, ledger, profit & loss account, balance sheet, tax audit report etc (IV) and pays the tax/dues. 2.That the Learned Assessing Officer as well as Learned Commissioner of Income Tax (Appeal) have erred while holding that the particulars of transactions, i.e., names of the parties is required to be disclosed to comply with the conditions of substantiates the manner. 3.That the Learned Assessing Officer as well as Learned Commissioner of Income Tax (Appeal) are also wrong arithmetically. The total income disclosed in this case was Rs. 640.00 Lakhs and the maximum penalty imposable u/s 271AAA comes to Rs. 64.00 Lakhs. 4. That the Learned Assessing Officer as well as Learned Commissioner of Income Tax (Appeal) have failed to appreciate the facts of the case, the evidences produced in support of these facts. The Learned Assessing Officer has misinterpreted the provision of the Section 271AAA. The section requires the specification of the manner and not the particulars of the parties of the transactions. Further the Learned Asses....
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....ores in SBI, Nizamuddin, New Delhi and of Rs. 1.75 crore in J&K Bank, Mandi Govindgarh, but no source with evidence had been filed during the assessment proceedings; that the assessee had explained that the source of the cash deposited in the banks was from land deals, but no details of land transactions had been filed; that from the verification of the entries recorded in the diaries seized during the search, the location and ownership of the land was not ascertained, nor the names and addresses of the sellers and purchasers had been disclosed by the assessee for cross verification; that thus, the assessee had neither specified the manner, nor substantiated the manner, in which such income had been derived; and that therefore, the provisions of Section 271AAA of the Act were clearly attracted. 5. Vide the impugned order, the ld. CIT (A) dismissed the appeal of the assessee, confirming the levy of penalty. It was observed that though in his statement recorded u/s 132 (4) of the Act, the assessee had admitted the undisclosed income, he had not stated as to how this und isclosed income had been derived; that the details of each transacti on, and all the persons involved had not been....
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....ort, and filing the same, the assessee had fully substantiated the manner in which the undisclosed income was derived. The ld. Counsel for the assessee has placed reliance on the following case laws:- 1. 'DCIT vs. Shri Inderchand Surajmal Bothra', ITA No.139/PN/2010 2. 'Shri Pramod Kumar Jain & M/s JRC Resources (P) Ltd. vs. DCIT', (2013) 33 taxmann.com 651 (Cuttack Trib.) 3. 'Shri Ashok Kumar Shar & Ors vs. DCIT' (2013) 33 TAXM ANN.COM 652 (Cuttack Trib.) 4. 'Mothers Pride Education Personna Pvt. Ltd. vs. DCIT', (ITA No.3372/Del/2011) 5. 'Sulochanadevi A. Agarwal vs. DCIT' (ITA No.1052/Ahd/2012. 6. 'CIT vs. Mahendra C. Shah', (2008) 299 ITR 305 (Guj) 7. 'CIT vs. Radha Kishan Goel' (2005) 278 ITR 454 (All) 8. 'Smt. Raj Rani Gupta vs. DCIT', (ITA No.3371/Del/2011) 9. 'Concrete Developers vs. ACIT', (2013) 34 taxmann.com 62 (NagpurTrib.) 10. 'Neerat Singal vs. ACIT' (ITA No.337/Del/2013. 7. Per contra, the ld. DR has placed strong reliance on the impugned orders. It has been pointed out that during the search, cash amounting to Rs. 7,20,90,395/- was found from the residence and lockers of the assessee and that on query, the assessee had submitted that he had su....
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....s 2. While lifting the restraint order u/s 132 (3) put on almirah on 30.01.2009 besides three boxes of jewellery, some clothes and a diary (Varindavan 1994), notebook (Neelgagan) has been found in the presence of two witnesses. While recording the statement, Smt. Mahima Gupta has expressed her ignorance about the contents of the diary/notebook and the nature of entries recorded there in the same have been seized and marked as Annexure A-1 & A-2. I am showing you the same. Please state as to whom this diary and note book belong to? Ans: I have seen both the diary and the notebook. They are rough records as it appears. The Note book, i.e., Annexure A-1 contains transactions in the handwriting of my father, Sh. Sita Ram Gupta and the Annexure A-2, i.e., Diary Varndavan 1994. Contains certain noting under my hand. I confirm that these belong to my father and my self respectively. Ques.3: Please explain the nature of entries recorded in diary and note book wherein entries running into lacs of rupees as cash received payment have been recorded? Ans: The noting relate to the transactions of sale and purchase of land/agricultural land/farmhouse, etc. in the both annexures. In fact, the ....
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....al of Explanation 5 it is evident that in circumstances which otherwise did not attract the penalty provisions of section 271 (1)(c) of the Act, now a deeming provision was introduced as to attract the penalty provisions to those cases as well. But an exception is provided in clause (2) of Explanation 5 where the deeming provision will not apply if during the course of search the assessee makes the statement under sub-section (4) of section 132 of the Act that the money, bullion, jewellery, etc., found in his possession has been acquired out of his income which has not been disclosed so far in his return of income to be furnished before the expiry of time specified in section 139 of the Act and also specifies in the statement the manner in which such income has been derived and pays the tax together with interest, if any, in respect of such income. The exception appears to be to provide an opportunity to the assessee to make a clean and fair confession and to surrender his income and also to deposit the tax and interest thereon which may result in an agreed assessment. The paramount intention appears to be that in the case of fair and clean confession and surrender of his income, d....
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....ere non-statement of the manner in which such income was derived would not make Explanation 5 (2) inapplicable.' 13. The above observations of their Lordships were made with reference to penalty u/s 271(1)(c) of the IT Act. 14. In Mahendra C. Shah case (supra), again, considering the penalty u/s 271 (1)(c) of the Act, following Radha Kishan Goel (supra), it was held:- "15. Insofar as the alleged failure on the part of the assessee to specify in the statement under section 132 (4) of the Act regarding the manner in which such income has been derived, suffice it to state that when the statement is being recorded by the authorized officer it is incumbent upon the authorized officer to explain the provisions of Explanation 5 in entirety to the assessee concerned and the authorized officer cannot stop short at a particular stage so as to permit the revenue to take advantage of such a lapse in the statement. The reason is not far to seek. In the first instance, the statement is being recorded in the question and answer form and there would be no occasion for an assessee to state and make averments in the exact format stipulated by the provisions considering the setting in which su....
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.... of Rs. 3 crore and Rs. 6 crores from various persons, which was duly disclosed as additional income for AY 2010-11, while making statement u/s 132 (4) of the Act. Additionally, the assessee had paid in cash a sum of Rs. 17,86,57,781/-, for purchase of land, which was also declared as additional income for AY 2010-11, while making statement u/s 132 (4) of the Act. In the said statement the assessee had admitted that he had entered into various forward/speculative and property transactions during the concerned period. In view of this, an income of Rs. 125 crores arising out of the said transactions was declared in the statement recorded at the time of the search. This included the said amount as undisclosed. Subsequently, the taxes due thereon were also paid and the same income as that declared in the return of income filed was also accepted by the department. 17. The facts in Neerat Singal (supra) are, mutatis mutandis, undisputedly, exactly similar to those present in the appeals before us now. Therein also, the manner of deriving the undisclosed income was substantiated without giving the details of the transactions and the names and addresses of the parties to the transactions.....