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The DCIT, Central Circle-2, Surat Versus M/s. Manan Corporation

2016 (7) TMI 1038 - ITAT AHMEDABAD

Penalty under section 271AAA - CIT(A) deleted the penalty levy - Held that:- The Revenue strongly argues that the CIT(A) admitted additional evidence in course of the lower appellate proceedings. No such case is being made out after perusing the lower appellate order. This plea is accordingly rejected. - The Revenue’s next argument seeks to revive the impugned section 271AAA penalty by drawing support from penalty order but it however fails to place any material on record rebutting the abov .....

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e are of the opinion in these facts and circumstances that the CIT(A) has rightly held the assessee to have satisfied all the three necessary three conditions for claiming section 271AAA(2) immunity i.e. it admitted undisclosed income of ₹ 1.15 crores, specified manner of having derived the same followed by substantiation thereof and paid taxes thereupon - Decided against revenue - ITA No. 3542/Ahd/2015 - Dated:- 16-6-2016 - Shri Pramod Kumar, Accountant Member and Shri S. S. Godara, Judic .....

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projects. The department searched/surveyed its premises as well as that of group concerns on 18-10-2011. The assessee appears to have disclosed a sum of ₹ 1,15,00 ,000/- in course thereof. Thereafter it filed return on 11-04-2012 stating income of ₹ 3,53,63,600/-. The Assessing Officer completed a regular assessment on 27-03-2014 making section 69C addition of ₹ 7000/-. He accordingly computed taxable income of ₹ 3,53,70,600/-. He further initiated the impugned section 2 .....

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that the departmental authorities did not put up any specific query in course of search at the time of the disclosure in question. The Assessing Officer concluded in the penalty order that the assessee had not specified the manner of deriving of the impugned undisclosed income along with substantiation. He accordingly imposed the penalty in question of ₹ 11.15 lacs. 4. The assessee preferred appeal. The CIT(A) accepts the same as follows:- 8. I have gone through the facts of the case, the .....

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ch such income has been disclosed u/s.132(4) of the IT Act, 1961. (ii) Substantiates the manner in which the undisclosed income was derived. Before proceeding further, the principles laid down by various ITAT Benches and High Courts particularly with reference to disclosure made under section 132(4) is required to be discussed. In the case of CIT vs. Mahendra C. Shah (299 ITR 305) the Hon'ble Gujarat High Court considered similar statement under section 132(4) to grant immunity under section .....

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and answer form and there would be no occasion for an assessee to state and make averments in the exact format stipulated by the provisions considering the setting in which such statement is being recorded. Secondly, considering the social environment it is not possible to expect from an assessee, whether literate or illiterate, to be specific and to the point regarding the conditions stipulated in the second exception while making statement under section 132(4). Even if the statement does not s .....

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bservations are made: i. The disclosure was made in the statement of Mr. Ravjibhai P Patel, partner u/s. 132(4) itself and is based on the document seized during the course of search. ii. In the statement in reply to question no. 9 there was project wise break up given for income earned from them in different firms. He had cooperated and given the details of above whose handwriting-is there on different loose documents. He further stated that this income is in the form of receivable (clearly mea .....

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he quantum reflected/intended to be reflected in the registered sale deeds of the units. He further elaborated that this is income above the regular income from the sale/booking of the projects, which would not be/has not been reflected in the regular books. Clearly it has been accepted and declared that this is the 'on money' on sale of flats/units and 'is net income on which no expense is further deductable or to be debited. v. The appellant was asked to show the treatment of this .....

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d as 'on money' on the sale/booking of flats, earned outside the books of account as on money on which no expenses remained to be debited. The appellant adhered to the statement and disclosed the income in return and paid taxes thereon. The income was also shown to the service tax department before the income tax assessment was completed. In nutshell, the appellant has in his statement u/s. 132(4) accepted the undisclosed income, submitted that it is in the form of receivable (clearly me .....

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lated in sub section (2) to section 271AAA of the I.T. Act have been met and no case is made out for imposition of penalty. I have also taken note of the following decisions of Ahmedabad Bench of the ITAT, which support the appellant's case: (a) Dy. CIT Vs. M/s. Ashirwad Corporation - ITA No. 1615/Ahd/2011 (b) Dy. CIT Vs. Dr. Mukesh S Shah - ITA No. 1942/Ahd/2012 (c) Dy. CIT Vs. Jaiprakash Aswani - ITA No. 2090/Ahd/2011 (d) Dy. CIT Vs. Surya Enclave - ITA No. 2092/Ahd/2011 8.2 I, therefore, .....

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