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2017 (6) TMI 772 - AT - Income TaxLevy of penalty u/s. 271AAA - whether the manner in which such income has been derived and whether it has been substantiated was explained by the assessee - Held that:- Wherever and whenever there is a voluntary offer of undisclosed income during the course of the search operation, the same should have a nexus with the unaccounted wealth unearthed. In the case in hand, the declaration of the undisclosed income is far more in excess of the undisclosed and unexplained wealth found during the course of the search operation. The voluntary offer of the assessee is not in consonance with the meaning of undisclosed income given under the explanation to Section 271AAA of the Act as mentioned elsewhere. There should be some nexus between the unaccounted wealth and the undisclosed income. According to us, the penalty should be levied only to the extent of the unexplained investment found at the time of search. Therefore, modifying the findings of the ld. CIT(A), we direct the A.O. to restrict the penalty to the extent of ₹ 7,22,967/- being 10% of ₹ 72,29,667/-. Assessee will get a relief of ₹ 35, 10,172/-. Appeal filed by the Assessee is partly allowed.
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