9911796707
TMI Blog2014 (10) TMI 876X X X X Extracts X X X X X X X X Extracts X X X X ..... the revenue has raised the following grounds: "W hether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the penalty levied u/s 271AAA of IT Act of Rs. 10,00,000/-, 20,00,000/- and Rs. 10,00,000/- without appreciating the fact that the assessee has failed to substantiate with evidence the the manner in which undisclosed income was derived so as to qualify for non-levy of penalty within the meaning of sub-section (2) of Sec 271AAA of the Act. 3 Before us, the Ld. Counsel for the assessee submitted that in these cases the amounts which were surrendered during search was duly reflected in the return and therefore immunity was available to the assessee from levy of penalty. He further submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losed income of the specified year if the conditions specified in sub section (2) of section 271AAA are not satisfied. It, therefore, follows that first thing to determine is what is the amount of undisclosed income under the given circumstances. The concept of undisclosed income has been clearly defined by explanation to section 271AAA and the same reads as under:- " Undisclosed income" means- i) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of search under section 132, which has-A a) not been recorded on or before the date of search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed income if it could nto be relatable to some assets/documents/entry found during the course of search operation. It also means that if the AO during the course of search operation. It also means that if the AO during the course of search assessment proceedings makes certain additions independent of the incriminating material/documents found during the course of search operation then such an assessed income would not invite penalty proceedings u/s 271AAA but under section 271(1)(c). It also means that initiation of penalty proceedings would depend upon the nature of the income assessed and there could be penalty proceedings u/s 271AAA as well as 271(1)(c) for the same assessment year, however in respect of different income. The AO in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the quantum of undisclosed income does not seem logical from the bare reading of the provisions of section 271A sub section (2). The requirement of the law is that the assessee should state the manner of earning undisclosed income and also substantiate the same. It would not be correct interpretation of the provisions to stretch the requirement to substantiate the quantum as well. There is no doubt with regard to the fact that the assessee's manner of earning undisclosed income being financing activities has been substantiated by the seized documents. The requirement of the law has therefore been fulfilled as the assessee had stated the manner of earning unaccounted income, substantiating the same and also paid the due taxes along with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty referred to in this section. Explanation.-For the purposes of this section,- (a) "undisclosed income" means- (i) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of a search under section 132, which has- (A) not been recorded on or before the date of search in the books of account or other documents maintained in the normal course relating to such previous year; or (B) otherwise not been disclosed to the Chief Commissioner or Commissioner before the date of search; or (ii) any income of the specified previous year represented, ei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned. In any case once the income is surrendered during the course of search u/s 132(4) it can be safely assumed that during discussion the assessee must have disclosed the manner. In any case we find force in the submissions of the Ld. Counsel for the assessee that if the explanation of the assessee has been accepted for a sum of Rs. 1987500 out of total surrender of Rs. 4 crores then same manner should have been accepted for the whole of the amount. It is not clear from the penalty order how explanation for Rs. 1987500 was accepted. In any case the Ld. CIT(A) has considered all these issues in detail and the D.R. for the Revenue has not referred to any material or decision which can controvert the findings of the CIT(A). In the followi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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