9911796707
TMI Blog2019 (8) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant craves leave to add, amend, alter and/or delete any/all of the above grounds of appeal." 2. Briefly stated, search and seizure action under Sec.132 was carried out on 18.02.2009 in the case of "Pathik construction group", and the assessee was covered in the said proceedings. The assessee filed his return of income for A.Y. 2009-10 on 13.01.2010, declaring his total income at Rs. 2,97,062/-. Subsequently, the assessee filed a revised return of income on 25.01.2010 declaring his total income at Rs. 1,02,97,062/-. Assessment under Sec. 143(3) was completed on 29.12.2010 determining the assesses total income at Rs. 1,04,44,892/-. The A.O in the assessment order also initiated penalty proceedings under Sec. 271AAA of the Act in respect of the undisclosed income of Rs. 1,00,00,000/- which was declared by the assessee in his statement recorded under Sec. 132(4) during the course of the search proceedings. 3. The A.O after the culmination of the assessment proceedings issued a 'Show cause' notice (for short 'SCN') under Sec. 271AAA, dated 29.12.2010, and called upon the assessee to explain as to why penalty under the said statutory provision may not be imposed on him in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'set aside' proceedings before the CIT(A) had submitted that as he was dealing in land, therefore, the cash balance available with him was generated from various purchase and sale transactions in land conducted by him. Also, the assessee in respect of his aforesaid claim had filed an "affidavit" stating that the undisclosed cash declared by him in his statement recorded under Sec. 132(4) was in respect of the land transactions. However, the CIT(A) was of the view that the assessee had failed to discharge the 'onus' as regards explaining the source of his undisclosed income both at the time of the search proceedings and also in the course of the penalty proceedings. Further, it was observed by the CIT(A) that even in the return of income filed by the assessee the undisclosed income was not shown by him under any specific head. Accordingly, the CIT(A) was of the view that as the assessee had failed to comply with the conditions laid down in Sec. 271AAA(2)(ii), therefore, he was liable for penalty under Sec. 271AAA of the Act. 7. The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. The ld. Authorized Representative (for short 'A.R') fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal of the assessee before us. Succinctly stated, the assessee in his statement recorded under Sec.132(4) on 18/19.02.2009 had admitted of having made an unexplained investment in a land deal of the firm M/s R.R Construction (in which he is a partner) viz. Plot No. 98, Sector 20 (admeasuring 1100 Sq. mtrs) at Ulwe. However, the assessee in his statement recorded under Sec. 132(4) had not explained the manner in which the undisclosed income so declared was derived by him. On the basis of the aforesaid facts, we find that the A.O being of the view the assessee had failed to satisfy the conditions envisaged in sub-section (2) of Sec. 271AAA, therein imposed a penalty of Rs. 10,00,000/- i.e @ 10% of Rs. 1 crore on him. On appeal, the CIT(A) vide his order dated 10.07.2012 observing that no question relating to the manner in which the undisclosed income was derived was asked from the assessee at the time of recording of his statement under Sec. 132(4), thus vacated the penalty imposed by the A.O under Sec.271AAA. Apart there from, it was observed by him that even otherwise the assessee in his statement recorded under Sec. 132(4) had in his reply to Question No. 3 specifically mentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ract): "9. I say that after considering the reply of the respondent, the A.O held that the appellant has not specified the manner in which the unaccounted income was derived though it was clearly submitted that the cash payment was in respect of land transactions which itself prove that the income was earned from the sale/purchase of land and such cash transactions which was not originally declared in the books of accounts was declared in the statement recorded u/s132(4) and also thereafter declared in the revised return." 11. We have given a thoughtful consideration and are of the considered view that the assessee even in the course of the 'set aside' proceedings before the CIT(A) had failed to explain the manner in which the undisclosed income of Rs. 1 crore declared in his statement recorded under Sec. 132(4), was derived by him. As observed by us hereinabove, the Tribunal in the course of the first round of appeal had after taking cognizance of the fact that no specific question was asked from the assessee about the manner in which the undisclosed income was derived while recording his statement under Sec. 132(4), had thus, at the request of the assessee in all fairness rest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of hte undisclosed income." As is discernible from a cursory glance of the aforesaid conditions, it can safely be gathered that it is obligatory for an assessee to not only furnish an explanation about the manner in which the undisclosed income was derived, but rather, as per the mandate of law he is obligated to substantiate the same. In fact, we find that while for clause (i) of sub-section (2) of Sec.271AAA mandates that the assessee shall specify the manner in which the undisclosed income admitted by him in his statement recorded under sub-section (4) of Sec.132 had been derived, while for clause (ii) of sub-section (2) of Sec.271AAA envisages a heavier burden, as per which the assessee is further required to substantiate the manner in which the said undisclosed income was derived by him. We find that in the case before us, as the assessee had failed to specify and also substantiate the manner in which the undisclosed income of Rs. 1 crore that was admitted in his statement recorded under sub-section (4) of Sec.132, was derived by him, therefore, the conditions envisaged in clause (i) and clause (ii) of sub-section (2) of Sec.271AAA, had not been satisfied. We are afraid t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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