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2013 (11) TMI 1326 - AT - Income TaxPenalty u/s 271AAA of the Income Tax Act - Search and seizure operation under section 132 of the Act was carried out on 13-01-2009 - During the course of search certain incriminating documents, jewellery and cash were found and seized - Return of income was filed u/s 139(1) on 26-09-2009 - The assessment was completed u/s 143(3) on 21-12-2010 and penalty was also initiated u/s 271AAA. During the search cash of Rs. 67 lakhs was found and seized. The assessee could not explain the source of cash found at the time of search. A statement u/s 132(4) of Shri Nitish Chordia, partner of Concrete Developers was recorded by which the assessee has offered for taxation an amount of Rs. 67 lakhs as unexplained cash and additional income of Rs. 1.53 crores in the hands of M/s Concrete Developers to cover up other discrepancies - Notice of penalty requiring assessee to show cause why penalty u/s 271AAA should not be levied was issued on 13-05-2011 – Held that:- During the course of assessment proceeding also, the assessee has explained the nature of income which was not disclosed before the search. It was explained that the independent income is to be assessed under the head business income and the AO has accepted this contention of the assessee as the assessment has been completed by taking the disclosed income under the head business income - It cannot be said that the assessee has not specified the manner or could not substantiate the manner in which the income was derived as the assessee has explained that this is an unexplained income of the assessee relates to firm which was doing only business activities - Except Rs.67 lakhs, no asset or material was found, however, the assessee has disclosed a sum of Rs.1.53 crores further for the reason that certain loose papers, which were found during the course of search and discrepancies in those papers could not be explained by the assessee, therefore, the assessee came forward to disclosed the total amount of Rs.2.21 crore, subject to non levy of penalty - Assessee has requested to cover his case under the exception clause of sub-section (2) of Section 271AAA of the Act - Assessee has satisfied the conditions for not levying the penalty under Section 271AAA – Reliance has been placed upon the judgment in the case of DCIT Vs. Pioneer Marbles & Interiors (P) Ltd [2012 (5) TMI 6 - ITAT KOLKATA]– Decided in favor of Assessee.
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