2018 (6) TMI 52

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....on 31/7/2008 on the assessee company. The documents seized contained the share purchase agreement which was at the residence of the brother of the assessee Shri Rakesh Kumar Garg. During the course of search action a surrender of Rs. 2,50,00,000/- was made in the name of the assessee in respect of cash receivables of Rs. 2,25,00,000/- on account of household items and expenses. During the course of assessment proceedings complete details regarding source of expenses and surrender amount we have heard both the parties and perused the material available on record explained and submitted by the assessee before the Assessing Officer. As the assessee did not specify the manner in which undisclosed income was derived and also not substantiated th....

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....The Ld. AR submitted that the assessee has fully explained at the time of search the undisclosed income and also during the course of assessment proceedings. There being no material available on record with the Department indicating earning of undisclosed income by the assessee as well as his family members, the Penalty proceedings cannot be initiated at all. The assessee deposited the tax along with interest on the surrendered amount in order to by peace on the understanding that no penalty would be imposed. The Ld. AR during the course of hearing pointed out that in case of brother of the assessee i.e. Rajesh Kumar Garg, the Tribunal deleted the penalty u/s 271AAA of the Act for Assessment Year 2009-10. The Ld. AR also relied upon the dec....

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.... have been paid thereon. It is not in dispute here that the assessee has admitted in his statement u/s 132(4) of the Act during the course of search and paid due tax thereon. However, the dispute is that assessee has not specified the manner in which such income has been arrived as well as not substantiated the manner of earning such income. It is also an uncontroverted facts that assessee has never been asked to substantiate the undisclosed income declared. Assessee has categorically denied and that he has been asked to substantiate the manner of earning undisclosed income and unless asked assessee did not have any opportunity to explain it. Revenue also could not explain that specific question was asked and assessee did not furnish the an....

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....artmental Representative of Anand Sancheti Vs. DCIT ITA No. 305/Nagpur/2015, wherein it has been held that the decision of Gujarat and Allahabad High Court were not in reference penalty u/s 271AAA but u/s 271(1)(c) of the Act. We do not agree with the order of the SMC in the above case as in explanation 5 of section 271(1)(c) there was also a requirement of specifying the manner in which such income has been derived to obtain the immunity. Further the decision relied up on by the ld DR is also of SMC where in the views of coordinate benches are heavily loaded in favour of the assessee. Therefore, on the facts and circumstances of the cases and respectfully following various decision of coordinate benches mentioned in para no 7 above we reve....