The DCIT, Central Circle-2, Baroda V. Shri Manibhai A. Shah, Vadodara

ITA 460/AHD/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1040 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 09-06-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 29-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P M MEHTA
• Keywords: Business income; Income from undisclosed sources; Document seized; Documents seized
• Section: 143(3); 131; 132; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA.NO.460/AHD/2016 / ASSTT. YEAR: 2012-2013 ITO, WARD-1(2)(4) BARODA. VS SHRI MANIBHAI A. SHAH 20, ANAND NAGAR SOCIETY PRODUCTIVITY ROAD VADODARA 390 007. PAN : AFRPS 0381 Q ! / (APPELLANT) '# ! / (RESPONDENT) REVENUE BY : SHRI SANJAY KUMAR, SR.DR ASSESSEE BY : SHRI P.M. MEHTA, AR / DATE OF HEARING : 09/06/2016 / DATE OF PRONOUNCEMENT: 27/07/2016 $%/ O R D E R REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST TH E ORDER OF THE LD.CIT(A)-12, AHMEDABAD PASSED FOR THE ASSTT.YEAR 2 012-13. 2. SOLITARY GRIEVANCE OF THE REVENUE IS THAT THE LD .CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS.15.00 LAKHS IMPOSED BY T HE AO UNDER SECTION 271AAA OF THE INCOME TAX ACT, 1961. 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SE IZURE OPERATION WAS CARRIED OUT IN THE CASE OF VASANWALA GROUP OF CASES ON 9.8.2011. DURING THE COURSE OF SEARCH, STATEMENT OF SHRI RAJESH M. SHAH AND OTHERS WERE RECORDED UNDER SECTION 132(4) OF THE INCOME TAX ACT. SHRI R AJESH M. SHAH ADMITTED TOTAL UNDISCLOSED INCOME AT RS.25,00,35,469/-. ACC ORDING TO THE AO, ITA NO.460/AHD/2016 2 BIFURCATION OF THE INCOME, HEAD-WISE AND YEAR-WISE, WAS NOT GIVEN IN THIS STATEMENT UNDER SECTION 132(4) OF THE ACT. YEAR-WI SE AND ASSESSEE-WISE BREAK UP WAS GIVEN BY THE GROUP SUBSEQUENTLY. THE ASSESS EE HAS FILED HIS RETURN OF INCOME ON 25.3.2013 DECLARING TOTAL INCOME AT RS.1, 50,52,490/-. THE ASSESSEE HAS DISCLOSED UNACCOUNTED INCOME OF RS.1.5 0 CRORES IN HIS HAND. THE AO HAS PASSED ASSESSMENT ORDER UNDER SECTION 14 3(3) ON 31.1.2014, AND HE ACCEPTED DISCLOSED INCOME OF THE ASSESSEE. THE LD.AO HAS INITIATED PENALTY PROCEEDINGS UNDER SECTION 271AAA OF THE ACT. HE IS SUED A SHOW CAUSE NOTICE UNDER SECTION 274 R.W.S. 271AAA. IN RESPONS E TO THE SHOW CAUSE NOTICE, THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS, AND THIS SUBMISSION HAS BEEN REPRODUCED BY THE AO IN THE PENALTY ORDER. IT READS AS UNDER: 2. IN RESPONSE TO THE NOTICE SO ISSUED, THE ASSES SEE HAS SUBMITTED HIS REPLY ON 12.05.2014, RAISING VARIOUS CONTENTIONS WH ICH ARE REPRODUCED AS UNDER: 1. 'WITH REFERENCE TO THE ABOVE, ASSESSEE WOULD LIK E TO SUBMIT THE BRIEF FACTS OF THE CASE. THE SEARCH WAS CONDUCTED IN THIS CASE ON 09/08/2011 BY THE DEPARTMENT U/S. 132 OF THE I.TACT AS A RESUL T OF WHICH DISCLOSURE FOR RS. 1,50,00,000/- WAS MADE FOR THE YEAR UNDER C ONSIDERATION BEEN DULY SHOWN IN THE RETURN OF INCOME & ACCEPTED IN TH E ASSESSMENT ORDER PASSED U/S. 143(3) OF THE I.TACT BY THE ASSESSING O FFICER. THE DUE TAXES ON THIS DISCLOSED INCOME WERE ALSO PAID BY THE ASSE SSEE. 2. NOW THE QUESTION OF LEVY OF PENALTY U/S. 271AAA OF THE ACT HAS BEEN RAISED BY YOUR GOOD SELF ON THIS DISCLOSED INCOME F IGURE WHICH IS NOT APPRECIABLE CONSIDERING THE FACTUAL & LEGAL ASPECTS OF THE CASE. THE RELEVANT SECTION 271AAA READS AS UNDER: (I) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANYT HING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1S T DAY OF JUNE, 2007 [BUT BEFORE THE 1ST DAY OF JULY, 2012], THE ASSESSE E SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM , A SUM COMPUTED AT ITA NO.460/AHD/2016 3 THE RATE OFTEN PER CENT OF THE UNDISCLOSED INCOME O F THE SPECIFIED PREVIOUS YEAR. (2) NOTHING CONTAINED IN SUB-SECTION (I) SHALL APPL Y IF THE ASSESSEE, ; (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UND ER SUB-SECTION (4) OF SECTION 132. ADMITS THE UNDISCLOSED INCOME AND SPECIFIES TH E MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLO SED INCOME WAS DERIVED; AND (HI) PAYS THE TAX, TOGETHER WITH INTEREST, IF A NY, IN RESPECT OF THE UNDISCLOSED INCOME. (3) NO PENALTY UNDER THE PROVISIONS OF CLAUSE (C) O F SUB-SECTION (I) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE IN RESPECT O F THE UNDISCLOSED INCOME REFERRED TO IN SUB-SECTION (I). (4) THE PROVISIONS OF SECTIONS 274 AND 275 SHALL, S O FAR AS MAY BE, APPLY IN RELATION TO THE PENALTY REFERRED TO IN THIS SECTION . EXPLANATION.FOR THE PURPOSES OF THIS SECTION, ( A) 'UNDISCLOSED INCOME' MEANS (I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRE SENTED, EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 132, WHICH HAS (A) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEAR CH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR; OR (B) OTHERWISE NOT BEEN DISCLOSED TO THE CHIEF COMMISSIONER OR COMMISSIONER BEFORE THE DATE OF SEA RCH; OR (II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPR ESENTED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPECT OF AN EXP ENSE RECORDED ITA NO.460/AHD/2016 4 IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAIN ED IN THE NORMAL COURSE RELATING TO THE SPECIFIED PREVIOUS YE AR WHICH IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CONDUCTED; (B) 'SPECIFIED PREVIOUS YEAR' MEANS THE PREVIOUS YE AR (I) WHICH HAS ENDED BEFORE THE DATE OF SEARCH, BUT THE DATE OF FILING THE RETURN OF INCOME UNDER SUB-SECTION (I) O F SECTION 139 FOR SUCH YEAR HAS NOT EXPIRED BEFORE THE DATE OF SE ARCH AND THE ASSESSEE HAS NOT FURNISHED THE RETURN OF INCOME FOR THE PREVIOUS YEAR BEFORE THE SAID DATE; OR (II) IN WHICH SEARCH WAS CONDUCTED.]' 3. FROM THE ABOVE CLAUSES OF THE SECTION IT BECOMES CLEAR THAT NO PENALTY ON THE INCOME DISCLOSED & PERTAINING TO THE SEARCH YEAR CAN BE LEVIED IF THE SAME IS ACCEPTED BY THE ASSESS EE & DUE TAXES ON THE SAME ARE PAID BY HIM. REGARDING THE ISSUE OF MANNER OF DERIVING OF DISCLOSED INCOME & ACCEPTING THE SAME I N 132(4) STATEMENT IS NOT AT ALL RELEVANT IF SPECIFIC QUESTI ON FOR THE SAME HAS NOT BEEN RAISED DURING THE COURSE OF SEARCH & M ORE SO WHEN THE DUE TAXES ARE PAID ON THE SAME WHICH LATER ON A LSO HAS BEEN ACCEPTED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. FOR THIS PROPOSITION OF LEGAL POSITION THE ASSESSEE WOU LD LIKE TO PLACE RELIANCE ON THE FOLLOWING JUDGEMENTS: I) CONCRETE DEVELOPERS V. ASSTT. COMMISSIONE R OF INCOME- TAX [2013] 34 TAXMANN.COM 62(NAGPUR - TRIB.) HEAD NOTE: 'SECTION 271AAA OF THE INCOME-TAX ACT, 1961 - PENAL TY - WHERE SEARCH HAS BEEN INITIATED - ASSESSMENT YEAR 2009-10 - WHETHER WHERE DURING COURSE OF SEARCH ASSESSEE ADMITTED UND ISCLOSED INCOME, PAID TAX TOGETHER WITH INTEREST, FILED RETU RN SHOWING SAID INCOME AS BUSINESS INCOME AND ASSESSING OFFICER HAD ACCEPTED SAME, IT COULD NOT BE SAID THAT ASSESSEE HAD NOT SP ECIFIED MANNER OR COULD NOT SUBSTANTIATE MANNER IN WHICH INCOME WA S DERIVED - HELD, YES - WHETHER, THEREFORE, PENALTY UNDER SECTI ON 271AAA ITA NO.460/AHD/2016 5 WAS NOT LEVIABLE AS ASSESSEE 'S CASE FELL UNDER SUB -SECTION (2) OF SECTION 271AAA - HELD, YES' II) PRAMOD KUMAR JAIN V. DPTY. COMMI SSIONER OF INCOME -TAX [2013] 33 TAXMANN.COM 651 (CUTTACK - TRIB.) HEAD NOTE: 'SECTION 271AAA OF THE INCOME-TAX ACT, 1961 - PENAL TY - WHERE SEARCH HAS BEEN INITIATED - ASSESSMENT YEARS 2007-0 8 AND 2008- 09 - WHERE ASSESSEE HAD MADE DISCLOSURE UNDER SECTI ON 132(4); INCLUDED SAID AMOUNT IN ITS RETURN; AND PAID TAX AN D INTEREST THEREON, PENALTY WAS NOT LEVIABLE UNDER SECTION 271 AAA [IN FAVOUR OF ASSESSEE]' III) NEERAT SINGAL V. ASSTT. COMMISIONER OF IN COME - TAX [2014] 101 DTK 238 (DEL. TRIB.) HEAD NOTE: 'PENALTY UNDER S. 271AAA- CONDITIONS PRECEDENT- SUR RENDER OF INCOME VIS-A-VIS MANNER OF EARNING - ASSESSEE UNDIS PUTEDLY ADMITTED UNDISCLOSED INCOME IN HIS STATEMENT UNDER S. 132(4), PAID TAX THERE ON & THE SAME WAS ACCEPTED BY THE DE PARTMENT- PENALTY LEVIED U/S. 271AAA FOR THE REASON THAT ASSE SSEE HAD NOT SUBSTANTIATED THE MANNER IN WHICH THE UNDISCLOSED I NCOME WAS DERIVED AS REQUIRED BY CL. (II) OF SUB S. (2) OF S. 271AAA- NOT JUSTIFIED-UNLESS THE AO PUTS SPECIFIC QUESTION WITH REGARD TO THE MANNER IN WHICH INCOME HAS BEEN DERIVED, IT IS NOT EXPECTED FROM THE PERSON TO MAKE A STATEMENT IN THIS REGARD - ON THE CONTRARY THE ASSESSEE HAS TRIED TO EXPLAIN THE EARN ING OF THE DISCLOSED INCOME IN QUESTION IN ITS REPLY DURING TH E COURSE OF RECORDING OF HIS STATEMENT U/S. 132(4) & THEREAFTER - AO WAS NOT JUSTIFIED IN IMPOSING PENALTY U/S. 271AAA SPECIALLY _WHEN THE OFFERED UNDISCLOSED INCOME HAS BEEN ACCEPTED & DUE TAX THEREON HAS BEEN PAID BY THE ASSESSEE' 4. IN THE BACKGROUND OF THE ABOVE LEGAL POSITION, I F THE FACTS OF THE CASE BEFORE HAND ARE CONSIDERED THE STATEMENT U /S. 132(4) OF THE ASSESSEE WAS RECORDED ON 10/08/2011 WHEREIN IN ANSWER TO QUESTION NO. 7 IT WAS CLEARLY STATED THAT THE DETAI L EXPLANATION OF ITA NO.460/AHD/2016 6 THE LOOSE PAPER FOUND AS PER ANNEXURE - 2 PAGE NO. 1 TO 169 WILL BE GIVEN BY HIS SON SHRI RAJESHBHAI M. SHAH. ON VER Y SAME DAY SHRI RAJESHBHAI M. SHAH HAS ALSO GIVEN STATEMENT U/ S. 132(4) IN WHICH HE HAD AFTER CONSIDERING THE SAID LOOSE PAPER FILES & OTHER DOCUMENTS AS WELL AS ANSWER GIVEN BY HIS FATHER, DI SCLOSED THE TOTAL INCOME OF RS. 25,00,35,469/-. FOR THIS DISCLO SURE DETAILED BIFURCATION IN CONSULTATION WITH FAMILY MEMBERS WAS SUBMITTED LATER ON. THE SAID BIFURCATION SUBMITTED OF DISCLOS ED INCOME FIGURE INCLUDED THE AMOUNT OF RS. 1,50,00,000/- BEL ONGING TO THE ASSESSES & THIS FACT HAS BEEN NOTED IN THE FORM OF CHART IN ASSESSMENT ORDER. SO, IN SUBSTANCE THE ASSESSEE HAD MADE DISCLOSURE OF RS. 1,50,00,000/- ON THE DATE OF THE SEARCH WHICH WAS INCLUDED IN THE TOTAL DISCLOSURE AMOUNTING TO R S. 25,00,35,469/-. THUS, CONDITION OF ACCEPTING THE UN DISCLOSED INCOME IN STATEMENT 132(4) GETS FULFILLED. NOW, AS FAR AS MANNER OF EARNINGS OF THIS INCOME IS CONCERNED NO SUCH QUE STION WAS RAISED DURING THE COURSE OF RECORDING STATEMENT & S O, IT DOES NOT BECOME NECESSARY FOR GETTING THE IMMUNITY FROM THE SECTION OF PROVISION 271AAA OF I.T ACT AS PER THE LEGAL POSITI ON EXPLAINED BEFORE. ONCE THE INCOME IS DISCLOSED, ACCEPTED & TA XES ARE PAID THE COURTS HAVE TAKEN LIBERAL VIEW THAT NO PENALTY CAB BE LEVIED EVEN IF OTHER TECHNICALITIES OF THE SECTION ARE NOT FULFILLED. THE ASSESSEE IS NOT EXPECTED TO KNOW THE IMMUNITY PROVI SIONS UNLESS SPECIFIC QUESTIONS ARE RAISED BEFORE HIM. 5. THUS, IT IS HUMBLE REQUEST OF THE ASSESSEE TO YO UR GOODSELF TO KINDLY DROP THE PENALTY PROCEEDINGS INITIATED U/S. 271AAA OF THE I.TACT.' 4. THE LD.AO IMPOSED PENALTY OF RS.15 LAKHS. HE WA S OF THE VIEW THAT THE ASSESSEE FAILED TO DISCLOSE MANNER OF EARNING UNDIS CLOSED INCOME AND ALSO FAILED TO SUBSTANTIATE THE ALLEGED MANNER, AS TO HO W THE INCOME WAS EARNED. 5. DISSATISFIED WITH THE ORDER OF THE AO, THE ASSES SEE CARRIED THE MATTER IN APPEAL BEFORE THE LD.FIRST APPELLATE AUTHORITY. HE FILED DETAILED WRITTEN SUBMISSIONS, WHICH HAS BEEN REPRODUCED BY THE LD.CI T(A). THE LD.FIRST APPELLATE AUTHORITY ON ANALYSIS OF THE SUBMISSIONS OF THE ASSESSEE ARRIVED AT ITA NO.460/AHD/2016 7 CONCLUSION THAT THE ASSESSEE HAS DULY DISCLOSED THE MANNER IN WHICH THE INCOME WAS EARNED AND ALSO SUBSTANTIATE SUCH MANNER . WELL REASONED FINDING OF THE LD.CIT(A) IS WORTH TO NOTE. IT READS AS UND ER: 4.1 I HAVE PATIENTLY HEARD THE ARS AND MINUTELY PE RUSED THE WRITTEN SUBMISSIONS AS ALSO THE DECISIONS RELIED UPON AND O BSERVATIONS OF THE AO BOTH IN PENALTY AND ASSESSMENT ORDERS. IT HAS TO BE FACTUALLY OBSERVED THAT THE LD. AO DURING BOTH THE ASSESSMENT PROCEEDINGS AS ALSO DURING PENALTY PROCEEDINGS CALLED UPON THE APP ELLANT TO 'EXPLAIN THE MANNER OF EARNING UNDISCLOSED INCOME' AND ALSO TO 'SUBSTANTIATE THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERI VED', IN RESPONSE TO WHICH THE APPELLANT HAS MERELY RELIED ON DISCLOS URE MADE IN THE RETURN OF INCOME AND HAS, AS MENTIONED EARLIER, REL IED ON THE DECISION OF HON'BLE GUJARAT HIGH COURT IN CASE OF COMMISSION ER OF INCOME-TAX V. MAHENDRA C. SHAH [2008] 172 TAXMAN 58 (GUJ.), AN D FURTHER DECISIONS AS REPRODUCED ABOVE TO CONTEND THAT 'SUFF ICIENT COMPLIANCE TO IMMUNITY CONDITION IN S. 271AAA(2)(II) HAS BEEN MADE DURING 132(4) WHEREIN THE RAJESH SHAH STATED THAT UNDISCLOSED INC OME IS INCOME FROM VARIOUS PROJECTS AND FROM THE TRANSACTION OF SALE O F LAND ETC, AND RECEIVED FROM VARIOUS BUSINESS PROJECTS, AND THE EN TITY-WISE BIFURCATION WAS GIVEN IN THE STATEMENT U/S 131 RECORDED IN CONT INUATION OF SEARCH PROCEEDINGS. THE APPELLANT'S SHARE OF ALLOCATION/MA NNER WAS STATED TO BE 'ON ACCOUNT OF MISCELLANEOUS TRANSACTION TO COVE R UP OTHER NOTINGS, LEAKAGES ETC'. HAVING GIVEN CAREFUL CONSIDERATION, I AGREE WITH THE LD. ARS, THAT THERE IS NO DEFINITION OF 'STATING THE MA NNER AND SUBSTANTIATING THE SAME' LAID DOWN IN S. 271AAA, AS INDEED IT IS TO BE GATHERED FROM NOT ONLY THE STATEMENT U/S 132(4) BUT ALSO THE SEIZED DOCUMENTS/ASSETS WHICH ARE CONFRONTED TO THE APPELL ANT. WHEN SEEN IN THE LIGHT OF MAHENDRA C SHAH (SUPRA), I FIND FORCE IN THE CONTENTION OF THE ARS THAT SUBSEQUENT TO ADMISSION U/S 132(4), CL EARLY INDICATING THE BROAD MANNER OF EARNING TO BE 'ON ACCOUNT OF MISCEL LANEOUS TRANSACTION TO COVER UP OTHER NOTINGS, LEAKAGES ETC ' FOLLOWED BY OFFERING IN THE RETURN, AND UNCONDITIONAL AND UNALT ERED BRINGING OF THE SAME TO TAX BY THE AO, SUBSTANTIALLY TANTAMOUNT TO STATING THE MANNER AND SUBSTANTIATING THE SAME, AND THAT THE AO CANNOT HOLD OTHERWISE DURING PENALTY PROCEEDINGS WITHOUT BRINGING IN POSI TIVE EVIDENCE TO ESTABLISH THE ABSENCE OF SUBSTANTIATION OR THE FALS ITY IN CLAIM OF THE APPELLANT OR WITHOUT REFERRING TO SEIZED DOCUMENTS. AS SUCH, IN LIGHT OF VARIOUS AUTHORITIES CITED BY THE AR AND ALSO OTHERW ISE PERUSED BY ME, I AM OF THE CONSIDERED OPINION THAT THE FACT THAT THE AUTHORIZED OFFICER ITA NO.460/AHD/2016 8 DURING SEARCH AND INVESTIGATING OFFICER THEREAFTER HAS ACQUIESCED IN THE REPLY GIVEN BY THE APPELLANT, WITHOUT ANY FURTH ER PROBE AT THAT TIME, CLEARLY BRINGS OUT THAT COMPLIANCE SATISFACTORY TO THE INVESTIGATING OFFICER HAS BEEN MADE BY THE APPELLANT. THEREAFTER, ONCE THE APPELLANT HAS FILED THE RETURN HONORING HIS COMMITMENT FULLY, WHICH HAS ALSO-BEEN ACCEPTED DURING ASSESSMENT WITHOUT ANY MODIFICATION TO RETURNED INCOME, THE LD. AO'S INSISTENCE FOR 'STATING THE MA NNER AND SUBSTANTIATING THE SAME' IS SIMPLY SUPERFLUOUS AND UNCALLED FOR IN THE CIRCUMSTANCES, IN THE FACE OF CLEAR-CUT DISCLOSURE OF MANNER OF EARNING AND/OR PURPOSE OF 'DISCLOSURE' BY THE APPELLANT, AN D ALSO IN LIGHT OF MAHENDRA C. SHAH (SUPRA). SUCH INSISTENCE OF THE AO AND 'NON- COMPLIANCE THERETO' BY THE APPELLANT PLEADING 'SUFF ICIENT COMPLIANCE', HAS OBVIOUSLY NOT IMPACTED THE QUANTIFICATION OF IN COME AND ASSESSMENT THEREOF. 4.3 THE ID. ARS HAVE ALSO BROUGHT MY ATTENTION TO A ND TAKEN ME THROUGH THE OPERATIVE PORTIONS OF THE AUTHORITIES R ELIED UPON BY THE ARS. IT IS FURTHER VERY VEHEMENTLY CONTENDED THAT T HE APPELLANT'S FACTS ARE FAR STRONGER THAN THE FACTS OBTAINING IN THE FO LLOWING CASES WHEREIN THE JURSDICTION HC AND TRIBUNAL FOUND IN FAVOUR OF THE APPELLANT: CIT V. MAHENDRA C SHAH 299 ITR 305 (GUJ) ...THE VIEW TAKEN BY THE TRIBUNAL TO THE EFFECT THA T EVEN IF THE STATEMENT DOES NOT SPECIFY THE MANNER IN WHICH THE INCOME IS DERIVED, IF THE INCOME IS DECLARED AND TAX THEREON IS PAID, THERE WOULD BE SUBSTANTIAL COMPLIANCE NOT WARRANTING ANY FURTHER DENIAL OF THE BENEFIT UNDER THE EXCEPTION NO. 2 IN THE EXPLANATION 5 WAS COMMENDABLE. [PARA 15]... [EMPHAS IS SUPPLIED] CITV. SIDHNATHGOEL 359ITR481: ....EXPLANATION 5 MAKES IT CLEAR THAT WHERE IN THE COURSE OF SEARCH THE ASSESSEE MAKES A STATEMENT UNDER SECTION 132 (4) AND OWNS THAT HE ACQUIRED ANY OF SUCH ASSETS OUT OF HIS UNDISCLOSED INCOME, NOT SO FAR RETURNED, AND FURTHER STATES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AND PAYS TAX TOG ETHER WITH INTEREST IF ANY IN RESPECT OF SUCH INCOME, NO PRESU MPTION OF CONCEALMENT HAS TO BE DRAWN, NOTWITHSTANDING THE AD MISSION TO THAT EFFECT. IN OTHER WORDS TO THE EXTENT THE ASSES SEE MAKES A ITA NO.460/AHD/2016 9 CLEAN BREAST OF HIS UNDISCLOSED INCOME REPRESENTED BY ASSETS FOUND TO BE IN THE POSSESSION OF THE ASSESSEE HE IS NOT DEEMED TO HAVE CONCEALED HIS INCOME OR CONCEALED PARTICULARS THEREOF. THE EXPLANATION IS NOT CONFINED TO PHYSICAL POSSESSION BUT EXTENDS TO OTHER FORMS OF POSSESSION, [EMPHASIS SUPPLIED] 4.4 THE FACT THAT THE LD. AO HIMSELF HAS TAXED THE AMOUNT OFFERED U/S 132(4) AND FURTHER IN THE RETURN U/S 153A, WITHOUT CONTRADICTING OR CONTESTING THE BASIS AND QUANTIFICATION OF SUCH 'UN DISCLOSED INCOME' TO DISPROVE THE SAME WOULD ALSO, IT WAS VEHEMENTLY CON TENDED, GO TO ESTABLISH THAT THE MANNER AS STATED BY THE APPELLAN T U/S 132(4) STANDS NOT ONLY SUBSTANTIATED AS REQUIRED U/S 271AAA(2)(II ) BUT THE AO IS ALSO SATISFIED ABOUT SUCH SUBSTANTIATION RIGHT AT THE AS SESSMENT STAGE, AND THE AO IS NOT EXPECTED TO SUDDENLY HOLD OTHERWISE D URING PENALTY PROCEEDINGS UNLESS HE BRINGS POSITIVE MATERIAL TO D ISPROVE THE ALREADY ACCEPTED SUBSTANTIATION BY THE APPELLANT. I FIND CO NSIDERABLE FORCE IN THE CONTENTIONS RAISED AS ABOVE AND HAVE NO HESITAT ION IN FULLY AGREEING WITH THE SAME. WHILE ON ONE HAND HC HAS CLEARLY OPI NED THAT CONSIDERING THE SOCIAL ENVIRONMENT, THE APPELLANT C ANNOT BE EXPECTED TO GIVE GRAPHIC DETAILS OF MANNER OF EARNING UNACCOUNT ED INCOME, THE INSISTENCE OF THE LD. AO FOR SUCH DETAILS OR SUBSTA NTIATION HAS NO BEARING OR RELEVANCE DURING THE ASSESSMENT WHEN DUE TAXES HAVE BEEN PAID BY THE APPELLANT. THE APPELLANT ALREADY MADE ' A CLEAN BREAST OF HIS UNACCOUNTED INCOME', AS IN SIDH NATH GOEL, (SUP RA) AND THERE IS NO FURTHER MATERIAL BROUGHT BY THE LD. AO TO HOLD OTHE RWISE. THUS, I FIND, AS ARGUED BY THE LD. ARS THAT THE APPELLANT'S CASE IS SQUARELY COVERED BY THE RATIOS OF MAHENDRA C SHAH AND SIDH NATH GOEL (SUPRA), AND THUS IT IS TO BE HELD THAT THE APPELLANT HAS MADE E FFECTIVE AND SUFFICIENT COMPLIANCE TO IMMUNITY CONDITION OF S. 271AAA(2)(II ) ALSO. 6. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, I HAVE GONE THROUGH THE RECORD. AREA OF DISPUTE BETWEEN BOTH THE PARTIES I S WHETHER THE ASSESSEE IS ENTITLED TO BENEFIT OF SUB-SECTION (2) OF SECTION 2 71AAA OF THE INCOME TAX OR NOT. SECTION 271AAA CONTEMPLATES LEVY OF PENALTY U PON AN ASSESSEE. HOWEVER, SUB-SECTION 2 PROVIDES THAT SUB-SECTION 1 OF SECTION 271AAA WOULD NOT BE APPLICABLE UPON AN ASSESSEE IF HE FULF ILLS THE FOLLOWING CONDITIONS VIZ. (A) THAT THE ASSESSEE IN THE COURSE OF SEARCH, IN A STATEMENT ITA NO.460/AHD/2016 10 UNDER SUB-SECTION (4) OF SECTION 132 ADMITS THE UND ISCLOSED INCOME AND SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED, AND (B) SUBSTANTIATE THE MANNER IN WHICH THE UNDISCLOSED IN COME WAS DERIVED, AND (C) PAYS THE TAX TOGETHER WITH INTEREST, IF ANY, IN RES PECT OF UNDISCLOSED INCOME. 7. AS FAR AS THE FULFILLMENT OF CLAUSE (C) IS CONCE RNED, THERE IS NOT DISPUTE BETWEEN THE PARTIES. SIMILARLY, ASSESSEE HAS DISCL OSED THE INCOME DURING THE COURSE OF SEARCH. THE DISPUTE BETWEEN THE PARTIES IS WHETHER THE ASSESSEE HAS SPECIFIED MANNER IN WHICH SUCH INCOME HAS BEEN DERI VED AND SUBSTANTIATE THE MANNER IN WHICH UNDISCLOSED INCOME WAS DERIVED. TH E AO HAS SIMPLY OBSERVED THAT THE ASSESSEE HAS NOT ADMITTED THE INC OME HIMSELF AND HAS NOT DISCLOSED THE MANNER. THE INCOME WAS DISCLOSED BY THE SON OF THE ASSESSEE. IT IS PERTINENT TO SAY THAT THE STATEMENT OF SHRI R AJESH M. SHAH WAS RECORDED ON BEHALF OF GROUP ITSELF. HE HAS SPECIFIED THE IN COME OF RS.25 CRORES NOT ONLY ASSESSABLE IN HIS HAND, BUT POINTED OUT THAT I T WILL BE ALLOCATED BETWEEN DIFFERENT ENTITIES AND THE PERSONS. HE HAS ALSO DI SCLOSED THE MANNER IN WHICH THE INCOME WAS DERIVED. ALL THESE ASPECTS HAVE BEE N SPECIFICALLY CONSIDERED BY THE LD.FIRST APPELLATE AUTHORITY IN THE FINDING EXTRACTED SUPRA. AFTER PERUSAL OF THE FINDING OF THE LD.CIT(A), I DO NOT S EE ANY REASONS TO INTERFERE IN IT. ACCORDINGLY, THE APPEAL OF THE REVENUE IS DEVO ID OF ANY MERIT, AND DISMISSED. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE COURT ON 27 TH JULY, 2016 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 27/07/2016