9911796707
TMI Blog2017 (9) TMI 1754X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income Tax Act, 1961 (the 'Act'). 2. The grounds of appeal filed by the Revenue read as under: 1. On the facts and the circumstances of the case, the Ld. CIT (A) was not justified in deleting the penalty levied u/s. 271AAA of the I.T. Act by holding that the conditions for immunity for penalty as mentioned in sub-section (2) of Section 271AAA were satisfied, whereas the conditions for immunity for penalty as mentioned in sub-section (2) of Section 271AAA were no satisfied. 2. On facts and in the circumstances of the case, the Ld. CIT (A) has erred in deleting penalty levied u/s. 271AAA of the I.T. Act when the assessee failed to specify the manner in which the undisclosed income has been derived and failed to substantiate th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Rs. 4,15,05.000/-, (iii) the assessee disclosed the above income in the return of income and paid the taxes and interest thereon, (iv) the AO has also accepted the nature of income disclosed while passing the assessment order. The facts delineated by the Ld. CIT (A) at para 2.2 of the appellate order dated 01.07.2014 is extracted below: "During the course of search action at the residence of Sh. Bharat B. Patel, partner of the assessee firm, certain incriminating loose papers were found and seized. The statement of Sh. Bharat B. Patel was also recorded on 18/01/2008 u/s. 132(4) of the Act. In response to the question no.7, Sh. Bharat B. Patel, partner of the assessee firm, admitted that the transactions in respect of 'on money' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me was derived and therefore, the AO has rightly imposed the penalty u/s 271AAA. 6. On the other hand, the Ld. counsel of the assessee submits that the assessee has substantiated the manner in which the undisclosed income was derived. It is stated by him that the AO has mentioned it in the assessment order as well as the penalty order. The assessee has paid tax and interest on the income disclosed during the course of search. Therefore, it is submitted by him that the AO should not have imposed penalty u/s 271AAA. The Ld. counsel relies on the order passed by the Ld. CIT (A). 7. We have heard the rival submissions and perused the relevant material on record. The reasons for our decision are given in succeeding paragraphs. We find that se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (A) have mentioned that thereafter the assessee had paid tax and interest on the declared amount of Rs. 4,29,96,250/-. 7.2 In CIT v. Sudhir Jain [2014] 41 taxmann.com 234 (Delhi), the Hon'ble Delhi High Court has held that no penalty u/s 271AAA is leviable where taxes and applicable interest were paid on undisclosed income and details of nature of undisclosed income and manner of earning was recorded. 7.3 A similar issue arose before ITAT "A" Bench, Mumbai in the case of ACIT v. Kanakia Spaces (P.) Ltd. [IT Appeal No. 6763 (Mum) of 2011, dated 10-7-2013] for the A.Y. 2007-08. The ground raised by the Revenue before the Tribunal was as under: "1. On the facts and in the circumstances of the case and in law, the ld. CIT (A) erred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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