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2016 (7) TMI 1231 - ITAT JAIPUR

2016 (7) TMI 1231 - ITAT JAIPUR - TMI - Penalty levied u/s 271AAA - undisclosed income - Held that:- There is no dispute with regard to the fact that the assessee has offered in his return of income the undisclosed income of ₹ 4,22,26,000/-. The same are duly recorded by the AO at para 5 of the assessment order. Nowhere in the assessment order, the AO recorded that the assessee was asked to specify or substantiate the manner in which the income has been derived and the assessee has failed .....

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sessee - ITA No. 1026/JP/2015, ITA No. 1027/JP/2015, ITA No. 1028/JP/2015 - Dated:- 20-7-2016 - SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YADAV, AM For The Revenue : Shri R.A. Verma (Addl.CIT) For The Assessee : Shri P.C. Parwal (CA) ORDER PER SHRI KUL BHARAT, JM. These are three appeals by the revenue against different orders of ld. CIT (A) dated 30.10.2015 in respect of three different assesses. The grounds raised by the revenue are common in all the appeals except change in figures. Therefo .....

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y, alter add or forego any ground(s) of appeal at any time before or during the hearing of this appeal. 2. Briefly stated the facts are that a search action was conducted on 31.1.2012 in the case of Mangal Group, Jaipur. The assessment under section 143(3) read with section 153B(1)(b) of the I.T. Act, 1961 (hereinafter referred to as the Act) was framed vide order dated 30.03.2014. While framing the assessment, the AO initiated penalty proceedings under section 271AAA on the ground that the tota .....

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assessee has not filed any appeal against the assessment order dated 31.3.2014. Another show cause notice dated 4.8.2014 was issued to the assessee to show cause as to why penalty u/s 271AAA may not be levied and date of compliance was fixed for 27.8.2014. In compliance, the assessee filed detailed written submission on 27.8.2014. The submissions of the assessee on the issue of surrender made in the return of income filed were considered by the AO carefully but he could not found it acceptable i .....

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nt proceedings. The assessee aggrieved by this order, preferred an appeal before ld. CIT (A), who after considering the submissions allowed the appeal of the assessee. 3. Now the revenue is in appeal before us. 4. The ld. D/R supported the order of the AO. 4.1. On the contrary, ld. Counsel for the assessee supported the order of ld. CIT (A) and submitted that the AO failed to appreciate the facts and wrongly applied the provisions. He submitted that the ld. CIT (A) has examined the facts and has .....

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has failed to do so. The AO has merely recorded that the total income declared in the return of income for the specified year included the undisclosed income of ₹ 4,22,26,000/- which represented the unexplained money in the form of sundry creditor written off. The ld. CIT (A) has given a finding of fact as under :- Undoubtedly, in accordance with sub section (2) of Section 271AAA of the Act, the penalty provisions under sub-section (1) of Section 271AAA will not apply if the assessee - (i) .....

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Further, the assessee, in course of search in the sworn statement recorded under section 132(4) of the Act, has admitted the undisclosed income, and clearly stated the manner in which the undisclosed income (within the meaning of Explanation (a)(i) of Section 271AAA) was derived and substantiated in statement recorded in course of search. Subsequently, the assessee paid tax, together with interest in respect of the undisclosed income and filed return of income, which stand accepted in assessmen .....

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the same, it is seen AO in the penalty order has observed that assessee has failed to comply to the terms and conditions of Sec 271AAA(2) of the Act as he is not able to substantiates the manner in which the undisclosed income was derived. Here, dictionary meaning of substantiates needs further elaboration. The dictionary meaning of substantiate (as a verb) is to establish by proof or competent evidence. Further, the word Substantiate is related to the word substantial, which means solid . So, t .....

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