2016 (7) TMI 1038

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....sessee builds/develops housing projects. The department searched/surveyed its premises as well as that of group concerns on 18-10-2011. The assessee appears to have disclosed a sum of Rs. 1,15,00 ,000/- in course thereof. Thereafter it filed return on 11-04-2012 stating income of Rs. 3,53,63,600/-. The Assessing Officer completed a regular assessment on 27-03-2014 making section 69C addition of Rs. 7000/-. He accordingly computed taxable income of Rs. 3,53,70,600/-. He further initiated the impugned section 271AAA penalty proceedings alleging that assessee's disclosure of Rs. 1.5 crores did not justify the manner and substantiate the means of having derived the above stated undisclosed income so as to be entitled section 271AAA(2) immunity.....

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....ts particularly with reference to disclosure made under section 132(4) is required to be discussed. In the case of CIT vs. Mahendra C. Shah (299 ITR 305) the Hon'ble Gujarat High Court considered similar statement under section 132(4) to grant immunity under section 271 (1 )(c). The Hon'ble High Court held as under:- "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 di a particular stage so as to permit the Revenue to fake advantage of such a lapse in the statement. The reason is not far to seek. In the first instance, the statement is being recorde....

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....receivable (clearly mea-ning that it is with third parties and not as cash or other assets). iii. Clearly no further related question was asked during the 132(4) statement. iv. In the post search inquiries, even the careful reading of question no. 9 and answer of statement dt. 25.01.2012, discussed by AO at page 4 of the penalty order; makes it very clear that the officer was already referring the income disclosed to be related to the sale of the units and the appellant has \ clearly stated that it is over and above the quantum reflected/intended to be reflected in the registered sale deeds of the units. He further elaborated that this is income above the regular income from the sale/booking of the projects, which would not be/has not....

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....d. Looking to the entirety of above facts and following the judgments of Hon'ble Gujarat High Court in the case of Mahendra C Sharv (j.ypra) and Hon'ble Allahabad High Court in the case of Radha Kishan Goel (supra); I hold that the conditions for exemption of penalty-as stipulated in sub section (2) to section 271AAA of the I.T. Act have been met and no case is made out for imposition of penalty. I have also taken note of the following decisions of Ahmedabad Bench of the ITAT, which support the appellant's case: (a) Dy. CIT Vs. M/s. Ashirwad Corporation - ITA No. 1615/Ahd/2011 (b) Dy. CIT Vs. Dr. Mukesh S Shah - ITA No. 1942/Ahd/2012 (c) Dy. CIT Vs. Jaiprakash Aswani - ITA No. 2090/Ahd/2011 (d) Dy. CIT Vs. Surya Encl....