TaxTMI 
TaxTMI 
TaxTMI 
2015 (4) TMI 749
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....4/- in the return of income that was filed by the assessee on 26-09-2008. The assessment was thereafter framed u/s. 143(3) vide order dated 24-04-2009 and the income returned by the assessee was accepted without any addition. On the amount of Rs. 2 crores that was disclosed in the return of income, penalty of Rs. 20,00,000/- was levied u/s. 271AAA by the AO vide order dated 29- 06-2010. Aggrieved by the penalty levied by the AO, Assessee carried the matter before CIT(A), who vide order dated 04-07-2011 deleted the penalty by holding as under:- "5. I have considered the facts of the case mentioned by the AO, the basis of levy of penalty, submissions made by Ld. AR on behalf of the honourable High Court's relied upon. 5.1 The Ld. AR's argument that the income disclosed by the assessee could not be covered under the definition of 'undisclosed income' as defined in Expl.(a) to section 271AAA of the Act, cannot be accepted because the key person of the group himself made disclosure of unaccounted income while recording the statement u/s.132(4) of the IT Act. He has also admitted that undisclosed income was invested in land, unaccounted cash, jewellery and receivables a....
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....e himself and his son were directors. He further explained that the figures might not have been reflected in the regular books of the Geeta prints Pvt Ltd and considering that his brother Shri Jayprakash K Aswani made disclosure of Rs. 2 crores as unaccounted income of the company. He also had confirmed the the disclosure made by the key person of the group Shri Jayprakash K Aswani. So assessee specified the manner in which undisclosed income was earned as the assessee company was having business of dyeing and printing of textile. Clause (ii) lays down the second condition that assessee should substantiate the manner in which undisclosed income has been derived. The key person of the group Shri Jaiprakash K. Aswani, in his statement recorded u/s 132(4) on 19 & 20.2.2008, in reply to question no. 11, made disclosure of totaI income of Rs. 20.23 crores and has provided bifurcation of undisclosed income in different hands and made disclosure of Rs. 2.00 crores in the hands of the assessee company. In the same question the Authorized Officer mentioned that it was established that the assessee earned income from on money received from booking of residential properties and textile busin....
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....sed so far in his return of incomes 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....under section 132(4) of the Act, unless the authorized officer puts a specific question with regard to the manner in which income has been derived, it is not expected from the person to make a statement in this regard and in case in the statement the manner in which income has been derived has not been stated but has been stated subsequently, it amounts to compliance with Explanation 5(2). If there is nothing to the contrary in the statement recorded under section 132(4) of the Act, in the absence of any specific statement about the manner in which such income has been derived, it can be inferred that such undisclosed income was derived from the business which he was carrying on. The object of the provision is achieved by making the statement admitting the non-disclosure of money, bullion, jewellery, etc. thus, much importance should not be attached to the statement about the manner in which such income has been derived, it can be inferred on the facts and circumstances of the case, in ....
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....basis of principle laid down by the honourable jurisdictional High Court and by the Allahabad High Court in the above cited decisions the assessee can be said to have substantially discharged the onus of explaining and substantiating the manner of earning undisclosed income because the Assessing Officer made assessment of disclosure made by assessee on the basis of actual income and not on the basis of the investment/expenditure under the various deeming provisions. Moreover, the Assessing Officer in the assessment order passed u/s.143(3) of the Act, accepted the disclosed income: declared by the assessee in the returned income including disclosure amount of Rs. 2,00,00,000/- made during search while recording statement u/s. 132(4) of the Act. The A.O. has not made any comment or observation about the source and nature of income, manner in which income was derived or substantiating the manner. The assessing officer has not made any addition of undisclosed income in addition to the disclosure made by the assessee and the income offered in the return filed. He has also not recorded any satisfaction or any addition of undisclosed income in addition to the disclosure made by the assess....