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TMI Blog2017 (9) TMI 1754X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned penalty order deserved to be set aside - Decided against revenue. - IT Appeal No. 6251 (Mum.) of 2014 - - - Dated:- 5-9-2017 - Mahavir Singh And N.K. Pradhan, JJ. Purushottam Kashyap, DR for the Appellant. Ajay R. Singh, AR for the Respondent. ORDER N.K. Pradhan, Who would have dreamed that he would be visited with penalty after paying tax and interest on the same disclosed and assessed income? But that is what this case is all about. This is an appeal filed by the Revenue. The relevant assessment year is 2008-09. The appeal is directed against the order Commissioner (Appeals) - 2, Thane and arises out of penalty order u/s 271AAA of the Income Tax Act, 1961 (the 'Act'). 2. The grounds of appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ]. Thus the penalty comes to ₹ 42,99,625/-. 4. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT (A). The Ld. CIT (A) observed that (i) Shri Bharat B. Patel, the partner of the assessee-firm in his statement recorded u/s 132(4) on 18.01.2008 has clearly explained the entries recorded on page 109 and 110 of the seized material and stated that such entries pertained to 'on money' received at ₹ 150/- sq. ft. on sale of commercial units measuring 51,700 sq. ft. and sale of residential units admeasuring 2,25,000 sq. ft., (ii) the assessee also quantified the total amount of 'on money' received from sale of shops and residential units at ₹ 4,15,05.000/-, (iii) the assessee discl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y' received during Financial Year 2007-08 was ₹ 4,15,05,000/-. In response to the question no.8, he has stated that 'on money' transactions were not recorded in the books of accounts and accordingly the additional income of the firm M/s. Akshar Developers is being declared for taxation over and above regular income with the request not to levy the penalty u/s. 271AAA. These facts have been recorded by the A.O. in the assessment and penalty orders. In view of the above, the Ld. CIT (A) cancelled the penalty of ₹ 42,99,625/- levied by the AO u/s 271AAA. 5. Before us, the Ld. DR submits that the assessee in the instant case the assessee has not substantiated the manner in which the undisclosed income was derived ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived. ii. He substantiates the manner in which the undisclosed income was derived. iii. He pays the tax, together with interest, if any, in respect of the undisclosed income. If the above three conditions are satisfied penalty u/s 271AAA (i.e. 10 % of undisclosed income of the specified previous year ) can be avoided. 7.1 Let us go back to the facts in the instant case. We have extracted at para 4 here-in-above the facts delineated by the Ld. CIT (A). The Ld. CIT (A) has also referred to the facts narrated by the AO in the assessment order and the penalty order. It is quite evident from a reading of the above that the assessee has substantiated the manner in which the undisclosed income was derived. Both the AO and the Ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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