TMI Blog2018 (3) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... fore both the Revenue authorities. On account of search and seizure of the incriminating material, this income was offered for taxation. The manner was disclosed as on-money received out of various housing projects constructed by the group. Apart from this question, no other question relating to manner and substantiate earning of such income was asked from the assessee during the course of assessment proceedings. Similarly, we have gone through the assessment order. The AO has nowhere asked the assessee to demonstrate the manner or substantiate that manner. Thus, taking into consideration facts and circumstances, we are of the view that the ld.CIT(A) has rightly deleted the penalty, and accordingly, we dismiss the appeal of the Revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on the ground that the assessee did not specify the manner in which the undisclosed income of ₹ 3,35,36,465/- was earned or substantiate the manner in which the undisclosed income was derived. Accordingly, he levied the impugned penalty. The order of the AO reads as under: 2. The assessment proceedings were finalized by order u/s. 143(3) dated 31/01/2014 determining income at ₹ 5,11,70,280/-. Penalty proceedings u/s. 2 71 AAA were initiated with regard to the undisclosed income of ₹ 3,3 5,36,465/- shown by the assessee, by issue of notice u/s. 271 AAA dated 31/01/2014 and 10/07/2014 and were served to the assessee. 3. As there is a change in incumbent, a fresh notice u/s.271AAA was issued to the assessee on 25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such income has been derived. It is also to be noted that the assessee and his group has substantiate the manner in which the undisclosed income was derived, and importantly the Madhav Group Persons have to paid tax together with interest in respect of the declared income. iv) Importantly, the group could worked out (on the basis of incriminating material) only 32.50 Crore of additional income out of the huge disclosure of ₹ 40 Crore. The assessee and the group could retract the balance of ₹ 7.50 Crore and save the tax along-with interest. However, the partners and the group persons have not resorted to it. Instead, they felt to keep the promise given at the time of search proceedings that the disclosure will be offered i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undisclosed income declared by the assessee in his return of income is ₹ 3,35,36,465/-. Penalty is leviable at 10% of the undisclosed income. Accordingly, a penalty of ₹ 33,53,650/- is hereby levied u/s. 271AAA of the I.T. Act, 1961 Issue demand notice and challan accordingly. 4. On appeal, the ld.CIT(A) re-appreciated the facts and circumstances and observed that the assessee has fulfilled conditions provided in section 271AAA(2), and therefore, it cannot be visited with penalty. 5. Before us, the ld.DR relied upon the order of the AO and contended that the assessee failed to substantiate the manner in which this income was earned. 6. On the other hand, the ld.counsel for the assessee took us through statement of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preciating the controversy involved, it is incumbent upon us to take note of section 271AAA. The relevant part of this section reads as under: 271AAA. Penalty where search has been initiated.-(1) The Assessing Officer may, notwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under section 132 on or after the 1st day of June, 2007, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him, a sum computed at the rate of ten per cent of the undisclosed income of the specified previous year. (2) Nothing contained in sub-section (1) shall apply if the assessee,- (i ) in the course of the search, in a statement under sub-section ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue pertained to condition no.2 that is whether the assessee has disclosed manner and substantiate that manner. On account of search and seizure of the incriminating material, this income was offered for taxation. The manner was disclosed as on-money received out of various housing projects constructed by the group. Apart from this question, no other question relating to manner and substantiate earning of such income was asked from the assessee during the course of assessment proceedings. Similarly, we have gone through the assessment order. The AO has nowhere asked the assessee to demonstrate the manner or substantiate that manner. Thus, taking into consideration facts and circumstances, we are of the view that the ld.CIT(A) has rightly del ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
