2015 (6) TMI 1060 - AT - Income Tax

Penalty u/s. 271AAA - as during the search assessee disclosed unaccounted income from on money - Held that - CIT(A) while deleting the penalty has noted that Assessee had disclosed the amount in the statement made u/s. 132(4), has substantiated the undisclosed income by quantifying the amount of ₹ 15 crore and thus the requirement of specifying the manner for which the income has been earned has been complied by the Assessee. He has further given a finding that the A.O in principle has accepted the disclosure and the method of earning the income. Before us, Revenue has not brought any material on record to controvert the findings of ld. CIT(A). Considering the aforesaid facts, we are of the view that ld. CIT(A) has rightly deleted the penalty and therefore we find no reason to interfere with the order of ld. CIT(A) and thus this ground of Revenue is dismissed. - Decided in favour of assessee.

Summary

Issues:
1. Appeal against deletion of penalty u/s. 271AAA by CIT (A) for assessment year 2008-09.

Analysis:
The appeal before the Appellate Tribunal ITAT Ahmedabad was regarding the deletion of a penalty of Rs. 1,50,00,000/- imposed under section 271AAA by the Assessing Officer (A.O.) for the assessment year 2008-09. The penalty was deleted by the Commissioner of Income Tax (Appeals) [CIT (A)]. The case involved a partnership firm engaged in construction and development of housing projects. A search and seizure operation under section 132 of the Income Tax Act revealed unaccounted income from "on money." The Assessee disclosed Rs. 15 crore as income for the year under consideration and included it in the Return of Income. The A.O. levied the penalty under section 271AAA, which was subsequently deleted by CIT (A) on the grounds that the Assessee had complied with the requirements of the provision.

The main contention revolved around the fulfillment of conditions specified under section 271AAA(2) of the Act. The CIT (A) held that the Assessee had disclosed the income during the search proceedings, specified the manner of earning, and substantiated the undisclosed income by quantifying it. The Assessee had also substantiated the undisclosed income by considering seized records and admitting to the "on money" booking. The A.O. had calculated the undisclosed income based on seized records and accepted the disclosure in substance. The Assessee had consistently maintained that the source of unaccounted income was from the on-money earned from the sale of residential bungalows. The Tribunal noted that the Revenue failed to provide any material to challenge the findings of CIT (A), leading to the dismissal of the Revenue's appeal.

In conclusion, the Appellate Tribunal upheld the decision of CIT (A) to delete the penalty under section 271AAA, as the Assessee had fulfilled the necessary conditions as per the provisions of the Act. The Tribunal found no reason to interfere with the order of CIT (A) and dismissed the appeal of the Revenue.