TMI Blog2018 (10) TMI 1757X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 - - - Dated:- 10-10-2018 - Shri C.M.Garg, Judicial Member And Shri O.P.Meena, Accountant Member Assessee by : Shri Sapnesh Sheth, C.A Revenue by : Smt. O.P. Singh, Sr. D.R ORDER C.M.Garg, This is a set of three appeals filed by the Revenue against the common order of Commissioner of Income Tax (Appeals)-II, Ahmedabad ( CIT(A) for short) dated 22.03.2014 for the Assessment Year (A.Y) 2011-12. 2. Both the parties have agreed to the fact that the facts and circumstances of all three appeals are quite similar and identical and for the sake of convenience and brevity, we are taking up ITA No.1810/Ahd/2014/ SRT for AY 2011-12 as lead case, wherein grounds of Revenue read as follows: 1. The ld. CIT(A) has erred in law and on facts in deleting the penalty of ₹ 2,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 assessee to pay 10% undisclosed income of the specified previous year, in addition to the tax payable by him. However, the legislation has granted immunity from the said penalty subject to cumulatively fulfilling three conditions as specified in sub section (2) of s. 271AAA of the Act. 6. Further, let us examine the present case as to whether the assessee is entitled to immunity from imposing of penalty u/s. 271AAA of the Act. From para 3 at Page 2 of the penalty order, it is clear that the AO himself noted that the assessee has paid tax together with interest in respect of undisclosed income. Therefore, undisputedly condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 which contained the details of cash transaction towards booking and selling of RT U wings of RKT Market. The selling after construction work was done by M/s Krish Corporation and therefore, the declaration of on money was also done in the name of this concern also. As regards fulfillment of the conditions of section 271AAA(2) are concerned, it is relevant to reproduce the said Section hereunder:- 271 AAA. [1] The A. O. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his 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) if no specific question is posed by the authorized officer during the search about the manner of earning of declared income, there would be substantial compliance if the income is declared and taxes thereon paid. [Mahendra C Shah [2008] 299 ITR 305 Guj] ii) It is not expected from a person to make statement suo-moto about the manner of earning the income unless he is specifically asked by the authorized officer but even if it is stated subsequently, that will amount to the compliance of explanation 5[2] of Section 271 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arious 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. 2[2], [2013] 34 Taxman.com 62 Nagpur As regards third limb of Section 271AAA[2] i.e. taxes on additional income should have been paid along with interest, it is observed that it is not in dispute as the A.O. himself has admitted in the penalty order that the taxes along with the interest have been paid by the appellant properl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eading 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 the case of Mahendra C. Shah (supra), which has been referred by Hon ble Jurisdictional High Court in its subsequent judgments in the cases of PCIT v. Emirates Technologies Pvt. ltd. (supra) and PCIT vs. Swapna Enterprises (supra). We are unable to see any ambiguity perversity or any othe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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