2014 (6) TMI 1019

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..../s 271AAA of the I.T. Act because in the search statement the assessee has not specified the manner in which such income was derived and also failed to substantiate the manner in which it was derived and therefore no immunity from penalty was available." 4. Briefly stated, the facts of the case are that the assessee filed Return of Income [ROI] for A.Y. 2010-11 on 28.07.2010 declaring income of Rs. 2,31,08,690/-. A search u/s 132(1) of the Income-tax Act, 1961 ['the Act', for short] was conducted in this case on 10.3.2010. Assessment u/s 143(3) was completed on 13.12.2011 and penalty of Rs. 10 lakhs was imposed vide order dated 13.12.2011. In appeal, the assessee was successful in getting the penalty deleted. This penalty was imp....

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.... record, we have found that during search, the assessee made a statement u/s 132(4) of the Act and subsequently, his statement u/s 131 of the Act was also recorded. When the assessee was confronted with incriminating evidence, the assessee made surrender which has been accepted by the department. However, the penalty was initiated and imposed because he could not explain the manner in which the undisclosed income had been derived by him. In fact, the transactions which could not be verified from the regular books of account of assessee's business were surrendered by him. It is a fact that the A.O. has admitted this surrender on the basis of assessee's business activity being carried on by him. There is no specific finding or evidence with r....

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....s provision. But the assessee has offered undisclosed income of Rs. 1,10,18,966/- in his original return fi led for A.Y. 2010-11 against the actual undisclosed income of Rs. 1,27,91,718/-. The revised return admitted complete undisclosed income of Rs. 1,27,91,718/- was filed before the A.O. issued notice u/s 142(1) and within the time limit prescribed u/s 139(5) of the Act. Thus, it is found that the assessee has disclosed the entire undisclosed income and has offered it for taxation. The assessee has also explained the undisclosed income was earned from his business alongwith providing details of projects completed/incomplete while replying to question No. 3 of his statement recorded u/s 132(4) of the Act. Copy of this statement is placed ....