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2018 (10) TMI 1757

..... ement recording authority, it is clear that there was no occasion for Shri Jerambhai Patel to state and make averments in the exact format as stipulated and required under clauses (i) & (ii) of sub s. (2) of s. 271AAA of the Act and in this scenario and considering the environment in which statement u/s. 132(4) of the Act is recorded it is not practically possible and correct to expect from the assessee, whether educated or uneducated, to specify and to point out the facts complying with the requirement of conditions stipulated in the clauses (i) & (ii) of sub s. (2) of s. 271AAA We reach to a logical conclusion that the ld. CIT(A) was right in granting relief to the assessee by following ratio of the decision of Mahendra C. Shah [2008 (2) TMI 32 - GUJARAT HIGH COURT] which has been referred by Hon’ble Jurisdictional High Court in its subsequent judgments in the cases of PCIT v. Emirates Technologies Pvt. ltd. [2017 (8) TMI 387 - DELHI HIGH COURT] and PCIT vs. Swapna Enterprises [2018 (2) TMI 57 - GUJARAT HIGH COURT] - ITA No.1810/Ahd/2014/SRT, 1811/Ahd/2014/SRT, 1815/Ahd/2014/SRT Assessment Year: 2011-12 - 10-10-2018 - Shri C.M.Garg, Judicial Member And Shri O.P.Meen .....

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..... restoring that of the Assessing Officer (AO). 4. Replying to the above, the ld. AR submitted that the AO imposed penalty against the mandate and provision of s. 271AAA of the Act and by ignoring various decisions of Hon'ble Supreme Court and Hon'ble High Court including decision of Hon'ble Jurisdictional High Court of Gujarat in the case of CIT vs. Mahendra C Shah reported in 299 ITR 305 (Guj.) and recent decision in the case of Pr. CIT v. Mukeshbhai Ramanlal Prajapati reported in 398 ITR 170 (Guj.). The ld. AR vehemently submitted that from the another recent decision of Hon ble Jurisdictional High Court of Gujarat in the case of PCIT vs. Swapna Enterprise reported in 401 ITR 488 (Guj.), wherein it was held that where u/s. 132 statement of one, partner of assessee firm is recorded u/s. 132(4), wherein he admitted that pages of diary BS-1 found and seized, contained entries of taxable income relating to various firms which are not recorded in books of accounts then, CIT was right in deleting penalty imposed by AO on assessee. 5. On careful consideration of above rival submissions, we are of the view that as per provision of s. 271AAA of the Act, the AO may direct the as .....

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..... s undisclosed income was derived was not clearly stated by Shri Patel. According to the A.O., the assessee stated only that the income declared u/s. 132[4] of the I. T. Act was in form of unaccounted on money or unaccounted cash received/receivable from construction work undertaken by M/s Krish Corporation. According to the A.Q., the assessee did not give specific details of amounts received or details of unaccounted expenditure. Thus, according to him, the exemption clauses of Section 271AAAF2] were not fulfilled in this case. Hence, the penalty. On the other hand, the AR has submitted that an amount of ₹ 20.00 crores was declared in the name of the appellant as unaccounted income earned outside the Books of Account for the year F.Y. 2010-11 i.e. A.Y. 2011- 12. The Ld. AR has submitted that the appellant group has been engaged in constructing Radha Krishna Textile Market [RKT] and from proposed purchasers, on money was also received. The AR also stated that unaccounted on money in respect of RT&U Division of the said project was taken in the name of M/s Krish Corporation, the details of which were recorded in the diary which was found and seized as per Annexure B.S.8 whi .....

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..... n from the statement of Shri Patel, wherein undisclosed income was declared u/s. 132[4], the manner of earning the said income was also clearly stated and the same was substantiated by seized documents [in the case of appellant firm, it is seized diary marked B.S.8]. It is also seen that the Authorized officer during the search did not put specific question or made query regarding the manner of earning of undisclosed income being declared. Thus, in my view, the exemption clauses (i) and (ii) of Section 271AAA[2] are fulfilled in this case because the appellant has clearly stated the manner in which the undisclosed income was derived and the same was substantiated also in form of seized material and cash received/ receivable. It has been held by various courts that unless the authorized officer puts specific questions to the person giving declaration u/s. 132[4] about the manner of earning the said undisclosed income, it will be presumed that the conditions of Section 271AAA[2] are fulfilled if the assessee declares unaccounted income and tells the sources thereof. Reliance is placed on following court decisions where the Hon'ble courts have held that:- i) ……&helli .....

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..... hich he was carrying on or from other sources. The objection of provision is achieved by making statement admitting non disclosure of money, bullion, jewelry, etc. [Radhakishan Goyal 278 ITR 454 - Alld .H.C.] It is seen that the judgements of Mahendra G Shah and Radhakishan Goya! both were delivered in the context of Section 271(1)(c) explanation 5[2] but the provisions are akin to Section 271AAA[2]. There are various other court decisions also which support this view that if assessee declares voluntarily, additional income during the statement u/s. 132[4] and states the manner of earning said income supported by identified assets and taxes along with interest paid thereon, the conditions of Section 271AAA[2] will be treated as fulfilled and penalty u/s. 271AAA shall not be leviable for e.g. i. Sulochanadevi A Agarwal ITA No. 1052/Ahd/2012. ii. ITO V. Shilpaben N Gupta - 1784/Ahd/2012 iii. Promodkumar Jain v. DCIT - 131 to 133/CTK/2012 iv. DCIT v. Pioneer Marbles and Interiors P. Ltd. 1326/Kol/2011 Similar verdict has been given in following recent court decisions:- a) Neerat Singhai v. ACIT, C.C.13, New Delhi [2013] 37 Taxman.com 189 Del. Tri. b) Concrete Developers v. ACIT, C.C. .....

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..... Krish Enclave which is unaccounted. After narrating these facts Shri Jerambhai Patel in the last part of this answer to Q. No.8 surrendered ₹ 41 crores including ₹ 20 crores in the name of present assessee i.e., Krish Corporation. 10. Therefore, on vigilant and careful reading and analysis of the questions posed to Shri Jerambhai Patel by the statement recording authority, it is clear that there was no occasion for Shri Jerambhai Patel to state and make averments in the exact format as stipulated and required under clauses (i) & (ii) of sub s. (2) of s. 271AAA of the Act and in this scenario and considering the environment in which statement u/s. 132(4) of the Act is recorded it is not practically possible and correct to expect from the assessee, whether educated or uneducated, to specify and to point out the facts complying with the requirement of conditions stipulated in the clauses (i) & (ii) of sub s. (2) of s. 271AAA of the Act. In this situation, and on the basis of foregoing discussion, we reach to a logical conclusion that the ld. CIT(A) was right in granting relief to the assessee by following ratio of the decision of Hon'ble Gujarat High Court in t .....

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