TaxTMI 
TaxTMI 
2015 (7) TMI 330
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.... operation under section 132 of the Act was carried out on the assessee's business premises and at that time Managing Director of the Company, Shri Jaiprakash Aswani, made a total disclosure of Rs. 2 crore in the Surya Enclave Project. Thereafter, the assessee filed its return of income on 12-1-2009 declaring total income of Rs. 2,40,48,820/- which included the disclosure of Rs. 2 crore made at the time of search and seizure operation. Thereafter, assessment was framed under Sec. 143(3) of the Act vide order dated 31-12-2009 and total income was determined at Rs. 2,89,46,800/-. On the undisclosed income of Rs. 2 crore, A.O. vide order dated 29-6-2010, levied penalty of Rs. 20 lac under Section 271AAA of the Act for the reason that the asses....
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....ecorded under section 132 (4) of income tax act. The AO has levied the penalty u/s 271AAA of the Act because the first two conditions of section 271AAA(2) are not fulfilled by the appellant. The three conditions provided in sub section (2) of section 271 AAA are reproduced as under: (i) In the course of search, in a statement under sub-section (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been derived; (ii) Substantiates the manner in which the undisclosed income was derived; and (ii) Pays the tax together with interest, if any, in respect of the undisclosed income. . . Clause (i) lays down the first condition that undisclosed income should have been admitted by the assessee in t....
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....ablished that the assessee earned income from on money received from booking of residential properties and substantiated the manner in which unaccounted income was earned. 5.3 The principles laid down by the Hon'ble High Courts in the cases of CIT v. Mahendra C. Shah [2008] 299 ITR 305; (Guj.) and second CIT v. Radha Krishna Goel [2005] 278 ITR 454/[2006] 152 Taxman 290 (All.), are also squarely applicable to the facts and circumstances of the appellant's case. In the case of CIT v. Mahendra C. Shah, Hon'ble jurisdictional High Court has observed that When the statement is being recorded by the authorized Officer, it is incumbent upon the authorized officer to explain the provision of explanation 5 in entirely to the assessee ....
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....4) of section 132 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 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 no....
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....atement recorded under section 132(4) on 19 & 20.2.2008, the authorized Officer has not asked any further question but was satisfied with the manner the income was earned by the assessee. Clause (iii) lays down the third condition regarding the payment of tax along with interest on undisclosed income admitted in the course of search. It is undisputed fact that the tax and interest had been paid by the assessee. The Assessing Officer himself stated the same in the penalty order. The assessee has made disclosure of unaccounted income while recording statement under section 132(4) of the Income tax Act and paid the taxes with interest. The disclosure was neither made against any money, bullion, jewellery or other valuable articles or thing....
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....elf was satisfied about the disclosed income offered in return of income. In view of these facts and circumstances of the case and the principles laid down in the decisions by the Hon'ble High Courts narrated above in paras 4.1 and 5.3 of this order, it is held that the Assessing Officer was not justified in levying the penalty u/s 271AAA of the Act and hence the same is deleted. 5. Aggrieved by the aforesaid order of the CIT (A), the Revenue is now in appeal before us. 6. Before us the Ld. D.R. supported the order of A.O. On the other hand, Ld. A.R. reiterated the submissions made before the A.O. and the CIT (A). and also placed reliance on the decision of Ahmedabad Tribunal in the case of DCIT vs. Smt. Sulochanadevi D. Agarwal in....