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2015 (10) TMI 2310 - GUJARAT HIGH COURT

2015 (10) TMI 2310 - GUJARAT HIGH COURT - TMI - Penalty where search has been initiated - whether two out of three conditions prescribed in section 271AAA are not fulfilled as concluded by CIT(A) and ITAT - Held that:- Commissioner (Appeals), after duly appreciating the material on record, has recorded a finding of fact to the effect that the assessee had duly satisfied the manner in which the undisclosed income had been derived and that the assessee had further substantiated the manner in which .....

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ecorded by it after appreciating the evidence on record, in the absence of any perversity in the findings recorded by it, it cannot be said that the impugned order passed by the Tribunal gives rise to any question of law, much less, a question of law, so as to warrant interference. - Decided against revenue. - Tax Appeal No. 565 of 2015 - Dated:- 14-9-2015 - Harsha Devani And A G Uraizee, JJ. For the Petitioner : Mr Sudhir M Mehta, Adv ORDER ( Per : Honourable Ms. Justice Harsha Devani ) 1. By t .....

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and upholding the decision of CIT(A) order while two out of three conditions prescribed in section 271AAA are not fulfilled ?" 2. The assessment year is 2008-09. A search under section 132 of the Act came to be carried out at the assessee s business premises. During the course of search, the assessee had disclosed unaccounted income of ₹ 2,00,00,000/- for the financial year 2007-08, that is, for assessment year 2008-09 which was included in the total income of ₹ 2,25,57,824/- i .....

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issioner (Appeals) who set aside the penalty. The revenue carried the matter in appeal before the Tribunal but did not succeed. 3. Mr. Sudhir Mehta, learned senior standing counsel for the appellant, invited the attention of the court to the provisions of section 271AAA(2) of the Act to submit that the assessee is entitled to exemption from the levy of penalty only in case it satisfies three conditions, namely, in the course of the search, in a statement under sub-section (4) of section 132, the .....

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enalty under section 271AAA of the Act. The attention of the court was invited to the statements of Shri Jayprakash Aswani and Ashok K Aswani as recorded in the order passed by the Commissioner (Appeals), to submit that from the statements of the said two persons it cannot be said that the assessee had specified the manner in which such income had been derived or that the assessee had substantiated the manner in which the undisclosed income was derived. It was, accordingly, urged that the Tribun .....

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the Commissioner (Appeals), he, upon appreciating the evidence on record, has recorded the following findings of fact:- "5. I have considered the facts of the case mentioned by the AO, the basis of levy of penalty submissions made by Ld. AR on behalf of the assessee and the decisions of the Honourable High Court s relied upon. 5.1. The Ld. AR s argument that the income disclosed by the assessee could not be covered under the definition of undisclosed income as defined in Expl.(a) to section .....

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e as per Expl.(a) to section 271AAA of the I.T. Act. 5.2 On perusal of assessment order it is found that the Assessing Officer issued notice for initiating penalty under section 274 r.w.s. 271AAA of the Income tax Act without recording his satisfaction that income offered by the assessee firm was not covered under section 271 AAA(2) of the Act and I also perused the statement of the assessee recorded under section 132(4) of the Income Tax Act. The AO has levied the penalty u/s.271AAA of the Act .....

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of the undisclosed income. Clause (i) lays down the first condition 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 & 20.2.2008, stated in reply to question no.11, and disclosed total income of ₹ 20.23 crores out of which undisclosed .....

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ther, Shri Ashok K Aswani in a statement on 6.5.2008 in reply to question number 3 stated that entries made in pocket diary were related to FY 2007-08. The entries related to Geeta Prints Pvt. Ltd. in which he himself and his son were directors. He further explained that the figures might not have been reflected in the regular books of the Geeta Prints Pvt. Ltd. and considering that his brother Shri Jayprakash K. Aswani made disclosure of ₹ 2 crores as unaccounted income of the company. He .....

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reply to question no.11, made disclosure of total income of ₹ 20.23 crores and has provided bifurcation of undisclosed income in different hands and made disclosure of ₹ 2.00 crores in the hands of the assessee company. In the same question the Authorised Officer mentioned that it was established that the assessee earned income from on money received from booking of residential properties and textile business and substantiated the manner in which unaccounted income was earned. The d .....

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