TMI Blog2014 (1) TMI 748X X X X Extracts X X X X X X X X Extracts X X X X ..... arned - the assessee had paid tax along with interest on undisclosed income admitted during the course of search – Relying upon CIT vs. Mahendra C. Shah [2008 (2) TMI 32 - GUJARAT HIGH COURT] and CIT vs Radha Kishan Goel [2005 (4) TMI 47 - ALLAHABAD High Court] - deleted the penalty - Revenue has not brought any material on record to controvert the findings of CIT(A) – the order of the CIT(A) upheld – Decided against Revenue. - ITA. No. 2718 & 2719/AHD/2012 - - - Dated:- 7-6-2013 - G C Gupta And Shri Chaturvedi, JJ. For the Appellant : Shri K.H Shah A.R. For the Respondent : Shri T Sankar Sr. D.R. ORDER:- PER : Anil Chaturvedi These appeals are filed by the Revenue against the order of Ld. CIT(A)-II, Ahmedabad dated 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee did not fulfill the condition specified under Section 271AAA (2) for exemption from penalty. 5. Aggrieved by the order of Assessing Officer, Assessee carried the matter before CIT(A). CIT(A) after considering the submissions made by the assessee deleted the penalty by holding as under:- [5.1] The Assessing Officer has levied the penalty u/s 271AAA of the Act because the first two conditions of section 271AAA(2) are not fulfilled by the appellant. The three conditions provided in sub section (2) of section 271AAA are reproduced as under: [i] In the course of search, in a statement under sub-section (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been derived. [ii] Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Unaccounted Cash Rs. 6,50,000/- Sundry Receivables Rs. 8,90,560/ Total Rs. 75,00,000/- Harikishan S.Virmani Sundry Receivables Rs. 1,45,00,000/- Oraments/Jewellery Rs. 30,00,000/- Total Rs. 1,75,00,000/- Clause (ii) lays down the second condition that assessee should substantiate the manner in which undisclosed income has been derived. The authorised officer did not ask any specific question on substantiating the manner in which income was derived, however the assessee clearly mentioned in a statement recorded in sector 132(4) that undisclosed income was on account of unaccounted trading. It is further clear that The pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the case of CIT v. Radha Krishna Goel [2005] 278 ITR 454, the Hon'ble Allahabad High Court gave similar findings and laid down similar principles as under.- '...From a perusal Explanation 5, it is evident that the circumstances which otherwise did not attract the penalty provisions of sect/on 271(1)(c), now by a deeming provision attract penalty provisions. But an exception is provided in clause (2) of Explanation 5 where the deeming provision will not apply if during the course of search the assessee makes the statement under sub-section (4) of section 132 that the money, bullion, jewellery etc. found in his possession has been acquired out of his income which has not been disclosed so far in his return of income and also spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation of undisclosed income in the hands of M/s.Rivaa Exports Ltd. and Shri Harikishan Virmani, it is clear that the authorized Officer, the concerned ADIT(lnv) and the Assessing Officer has not raised any further query regarding substantiating the manner in which the undisclosed income was derived and the principles laid down by the Honourable Gujrat High Court and Allahabad High Court, it is observed that the Honourable courts have laid down the principle that the authorized Officer is to explain the provision to the assessee and ask the relevant questions on the manner in which the undisclosed income was earned and in the present case it is applicable for section 271AAA instead of explanation 5 of Section 271(1). in the whole, the state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.75,00,000/- made during search while recording statement u/s.132(4) of the Act. The A.O. has not made any comment or observation about the source and nature of income, manner in which income was derived or substantiating the manner. This shows that the A.O. himself was satisfied about the income offered in return of income. In view of these facts and circumstances of the case and the principles laid down in the decisions by the Hon'ble High Courts narrated above in this order, and following the decision in the case of Rajendra Prasad Dokania by the ITAT 'D' Bench, Ahmedabad in ITA. No. 525/Ahd/2012 dated 04/05/2012, it is held that the Assessing Officer was not justified in levying the penalty of Rs.7,50,000/- u/s 271AAA of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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