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2017 (5) TMI 1654 - AT - Income TaxPenalty levied u/s 271AAA - assessee makes declaration of the undisclosed income in the statement recorded u/s 132(4) admitting the undisclosed income - assessee has not specified the manner in which such income has been arrived as well as not substantiated the manner of earning such income - Held that:- 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. 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 answer. The condition regarding specifying and substantiating the manner in which undisclosed income has been earned is always difficult for the assessee for obvious reason that no records of such income are kept in a meticulous manner. Generally, no person usually keeps the evidences of undisclosed income which has not been recorded in the regular books of account. The Hon'ble Gujarat High Court in CIT Vs. Mahendra C. Shah [2008 (2) TMI 32 - GUJARAT HIGH COURT] has held that assessee having declared the value of diamonds in his statement u/s 132(4) and paid due tax thereon, he was entitled to immunity from penalty according to explanation 5 to section 271(1)(c) of the Act. - Decided in favour of assessee.
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