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TMI Blog2016 (1) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... e grievance identical in all three cases challenges the CIT(A)'s action in deleting Section 271AAA penalties of Rs. 41,10,205/- in first case and Rs. 10lacs each in the remaining two cases. 3. Case called twice. None appears at assessees' behest despite service of notice. The case files reveal that these assessees have chosen to place on record written submissions. We accordingly take note of contents therein. All there appeals are taken up for disposal accordingly. 4. It transpires from the case file that the department conducted a search action in case of M/s. Visahl Fashion Pvt. Ltd. on 20.01.2009. Shri Dipesh Shah, One of its Director got recorded its statement on the same day making total disclosure of Rs. 7.5 crores includin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39; as defined in Expl.(a) to section 271AAA of the Act, cannot be accepted because the assessee himself made disclosure of unaccounted income while recording the statement u/s.132(4) of the I.T.Act. He has also admitted that undisclosed income was represented by unaccounted grey stocks, receivables and other discrepancies and undisclosed income was not recorded in the books of account. The disclosure made by the assessee for undisclosed income of Rs. 4,11,02,053/-, is clearly covered under the definition of "undisclosed income" represented by unaccounted assets as per Expl.(a) to section 271AAA of the I.T.Act. The Ld. AR further argued that the assessee case falls in exception of sub-section (2) of Section 271 AAA as alt the three condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned. Clause (ii) lays down the second condition that assessee should substantiate the manner in which undisclosed income has been derived. The authorised officer did not ask any specific question on substantiating the manner in which income was derived, however the assessee clearly mentioned in a statement recorded in sector 132(4) that undisclosed income was current year business income. It is further argued that the principles laid down by the Hon'ble High Courts in the cases of CIT v. Mahendra C. Shah [2008] 299 ITR 305 (Guj.) and second CIT v. Radha Krishna Goel [2005] 278 ITR 454/[2006] 152 Taxman 290 (All.), are also squarely applicable to the facts and circumstances of the appellant's case . In the case of CIT v. Mahendra C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c), now by a deeming provision attract penalty provisions: But an exception is provided in clause (2) of Explanation 5 where the deeming provision will not apply if during the course of search the assessee makes the statement under subsection (4) of section 132 that the money, bullion, jewellery etc. found in his possession has been acquired out of his income which has not been disclosed so far in his return of income and also specifies in the statement the manner in which such income has been derived and pays the tax together with interest, if any, in respect of such income....under section 132(4) of the Act, unless the authorized officer puts a specific question with regard to the manner in which income has been derived, it is not expect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s applicable for section 271AAA instead of explanation 5 of Section 271(1). In the whole, statement recorded under section 132(4) on 20.01. 2009, the authorized Officer has not asked any further question but was satisfied with the manner the income was earned by the assessee. Unaccounted stock found during search clearly substantiates that undisclosed income was earned from business run by the assessee company only and not from any other activity which was not disclosed by the assessee during search. The learned DCIT has never given the appellant any show cause notice or an opportunity during the course of ^assessment proceedings with regard to his reservation and contrary opinion about the explanations, information and specific manner in w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Hon'ble High Courts narrated above in paras 4.1 and 5.3 of this order, it is held that the Assessing Officer was not justified in levying the penalty u/s 271AAA of the Act and hence the same is deleted." The very reasoning stands adopted in the other two cases. 6. This leaves the Revenue aggrieved. 7. We have heard the Revenue and gone through assessees' written submissions. Relevant facts narrated hereinabove are not repeated for the sake of brevity. These three assessees declared their undisclosed incomes in the search statement. The same stand assessed. The Revenues' case is that none of these three assessees satisfy first two conditions envisaged u/s.271AAA(2) of the Act i.e. admission of undisclosed income as well ..... X X X X Extracts X X X X X X X X Extracts X X X X
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