TMI Blog2015 (7) TMI 330X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst revenue. - I.T.A. No. 2092/Ahd/2011 - - - Dated:- 25-6-2015 - Shri Anil Chaturvedi and S.S. Godara , JJ. For the Petitioner : Shri V.K. Singh, Sr. D.R. For the Respondent : Shri Rajesh Shah, A.R. ORDER PER ANIL CHATURVEDI ACCOUNTANT MEMBER: This appeal is filed by the Revenue against the order of CIT (A)-II, Ahmedabad dated 14-6-2011 for Assessment Year 2008-09. 2. The relevant facts as culled out from the material on record are as under. 3. The assessee is a partnership firm stated to be engaged in the business of construction activity. In this case, a search and seizure operation under section 132 of the Act was carried out on the assessee s business premises and at that time Managing Director of the Company, Shri Jaiprakash Aswani, made a total disclosure of ₹ 2 crore in the Surya Enclave Project. Thereafter, the assessee filed its return of income on 12-1-2009 declaring total income of ₹ 2,40,48,820/- which included the disclosure of ₹ 2 crore made at the time of search and seizure operation. Thereafter, assessment was framed under Sec. 143(3) of the Act vide order dated 31-12-2009 and total income was determined at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that undisclosed income should have been admitted by the assessee in the statement u/s 132(4) and assessee should specify the manner in which it has been derived. The key person of the group, Shri Jaiprakash K. Aswani in his statement recorded u/s 132(4) before the Deputy DIT in course of search on 19 2.0.2.2008, stated in reply to question no. 11, and disclosed total income of ₹ 20.23 Crores out of which undisclosed income of ₹ 2.00 crores belonged to the assessee firm. In the same question the authorized Officer himself stated in these transactions it mainly appears that receipts of onmoney from various residential projects by your group companies, clearly implies that the income is earned from onmoney. The assessee in his statement recorded u/s 132(4) disclosed ₹ 2.00 crores on account of net income from on-money receipts from booking of residential properties in the project developed and constructed by the assessee firm itself. So assessee specified the manner in which undisclosed income was earned. Clause (ii) lays down the second condition that assessee should substantiate the manner in which undisclosed income has been derived. The key person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 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 specifies in the statement the manner in which such income has been derived and pays the tax together with interest, if any, in respect of such income....under section 132(4) of the Act, unless the authorized officer puts a specific question with regard to the manner in which income has been derived, it is not expected from the person to make a statement in this, regard and in case in the statement the manner in which income has been derived, has not been stated but has been stated subsequently, it amounts to compliance with Explanation 5(2). If there is nothing to the contrary in the statement- recorded under section 132(4) of the Act, in the absence of any specific statement about the manner in which such income, has been derived, it can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son of the group, Shri Jaiprakash K.Aswani recorded u/s.132(4) on the ground of 'on money' collected on booking of residential properties in their projects and from the textile business. In view of the above circumstances and on the basis of principles laid down by the Honourable jurisdictional High Court and by the Allahabad High Court in the above cited cases the assessee can be said to have substantially discharged the onus of explaining and substantiating the manner of earning undisclosed income because the Assessing Officer made assessment of disclosure made by assessee on the basis of actual income and not on the basis of the investment/expenditure under the various deeming provisions. Moreover, the Assessing Officer, in the assessment order passed u/s.143(3) of the Act, accepted the disclosed income declared by the assessee. The returned income included disclosure amount of ₹ 2,00,00,000/- 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 ab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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