TMI Blog2017 (4) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee has paid taxes as well as interest. The dispute between the assessee and Revenue pertained to condition no.2 that is whether the assessee has disclosed manner and substantiate that manner. In order to evaluate circumstances pertained to this condition, we find that reply to question 15 would show that group had different projects which have constructed building, thereafter, they have excluded certain amounts on a net basis from these projects, which were not accounted in the books. On account of search and seizure of the incriminating material, this net income was offered for taxation. The manner was disclosed as out of various housing projects constructed by the group. Apart from these questions, no other question relatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been written in this diary in coded-word. For the present assessee this income was admitted at ₹ 1.14 crores. Though originally the assessee has disclosed total income at ₹ 6,86,980/- in the return filed on 15.2.2012, but later on it had offered a sum of ₹ 1.14 crores in the return filed in response to the notice under section 142(1) of the ct. The AO has accepted this return and passed assessment order on 22.3.2013. The relevant discussion about initiation of penalty under section 271AAA of the Act and the addition of ₹ 1.14 crores has been made in para-4 of the assessment order. It reads as under: 4 . The assessee firm has carried on the construction of its own going project Western Height . Beside above t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ni Corporation Western Somchintamani 785000 7,85,00,000 3 3 Amar Developer Western Shikharji 275000 2,75,00,000 4 4 Ambica Developer Western Business Park Wester Residency 165000 1,65,00,000 5 5 Aditya Developers Virbhadra Avenue 151000 1,51,00,000 6 6 Ambica Enterprises Western Height 114000 1,14,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visited with penalty. Before us, the ld.DR relied upon the order of the AO as well as statement of facts filed by the Revenue. He contended that the assessee failed to substantiate the manner in which this income was earned. It was also contended that the ld.CIT(A) has relied upon the judgment of the Hon ble Gujarat High Court in the case of CIT Vs. Mahendra C. Shah, 299 ITR 305 (Guj), but this judgment was in connection with the levy of penalty under section 271(1)(c) with aid of Explanation 5 to section 271(1)(c). 6. On the other hand, the ld.counsel for the assessee took us through reply to question no.13 of the statement recorded under section 132(4) of the Act. Such reply is available at page no.11 of the paper book. On the stren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. A bare perusal of this section would indicate that sub-section (1) authorise the AO to levy penalty at the rate of 10% of the undisclosed income of the specified previous year. Sub-section (2) provides conditions on whose fulfillment the assessee could be absolved from the levy of penalty. A perusal of sub-section (2) would indicate that it postulates three conditions for an assessee on whose fulfillment he will be absolved from levy of penalty. In the present case, we have perused the statement of Shri Manish K. Shah recorded under section 132(4) of the Act at the time of search. Thus, so far as first conditions is concerned, the assessee should admit the undisclosed income in a statement given under sub-section (4) of section 132 tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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