9911796707
TMI Blog2015 (7) TMI 333X X X X Extracts X X X X X X X X Extracts X X X X ..... conducted a search on 14.2.2008 in his group of cases. He admitted unaccounted on-money income of Rs. 3 crores in his statement recorded in course of the search. And included the very sum in his return filed on 12.1.2009. The Assessing Officer completed a regular assessment on 24.12.2009 making unexplained investment addition of Rs. 6,79,10,000/-. And initiated penalty proceedings u/s.271(1)(c) of the Act alleging concealment and furnishing of inaccurate particulars of income at the assessee's behest. The assessee does not seem to have filed any appeal. Quantum proceedings attained finality accordingly. 4. The Assessing Officer took up the penalty proceedings. The assessee inter alia quoted section 271AAA(2)(i)-(iii) and claimed to have admitted the aforesaid undisclosed income of Rs. 3 crores, specified as well as substantiated manner of deriving the same along with payment of taxes and interest. The Assessing Officer held in penalty order dated 29.06.2010 that although the assessee had declared the abovestated undisclosed income of Rs. 3 crores, he had not disclosed particulars of his accounts and details with source thereof. He recited assessment proceedings and observed that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en derived. Shri Jaiprakash K. Aswani in his statement recorded u/s 132(4) before Deputy DIT in course of search on 19 & 20.2.2008, stated in reply to question no.11, and disclosed total income of Rs. 20.23 crores out of which undisclosed income of Rs. 3.00 crores belonged to the assessee. In the same question the authorized officer himself stated "in these transactions it mainly appears that receipts of on-money from various residential projects by your group companies," clearly implies that the income is earned from on-money. The assessee in his statement recorded u/s.132(4) disclosed Rs. 3.00 crores on account of net income from on-money receipts 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. Shri Jaiprakash K. Aswani in his statement recorded u/s.132(4) on 19 & 20.2.2008, in reply to question no. 11, made disclosure of total income of Rs. 20.23 crores and has provided bifurcation of undisclosed income in different hands and made disclosure of Rs. 3.00 crores in the hands of the assessee. In the same question the Authoriz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn 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 inferred that such undisclosed income was derived from the business which he was carrying on. The object of the provision is achieved by making the statement admitting the nondisclosure of money, bullion., jewellery, etc. thus, much importance should not be attached to the statement about the manner in which such income has been derived. It can be inferred on the facts and circumstances of the case, in the absence of anyt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed income because the Assessing Officer made assessment of disclosure ma.de 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 returned income declared by the assessee. The returned income included disclosure amount of Rs. 3,00,00,000/- 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 about the income offered in return of income, therefore, he did not initiate penalty 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 paras 4.1 and 5.3 of this order, it is held that the Assessing Officer was not justified in levying the penalty u/s.271AAA of the Act and hence the same is deleted." This leaves the Revenue aggrieved. 6. We have heard both sides and perused the case file. The Revenue reiterates t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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