PRINCIPAL COMMISSIONER OF INCOME TAX Vs. SWAPNA ENTERPRISE

JUDGEMENT

(1.) By this appeal under section 260A of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), the appellant-Revenue has challenged the order dated April 10, 2017, made by the Income-tax Appellate Tribunal, "B" Bench, Ahmedabad, (hereinafter referred to as "the Tribunal") in ITA No. 1355/Ahd/2014 by proposing the following two questions, stated to be substantial questions of law:

(2.) The assessment year is 2011-12 and the corresponding accounting period is April 1, 2010 to March 31, 2011.

(3.) The assessee-firm was engaged in the business of development of housing projects. Search and seizure proceedings came to be carried out under section 132 of the Act at the business as well as the residential premises of the assessee. During the course of search, a statement of one of the partners of the firm, namely, Shri Alpeshbhai G. Kotadia came to be recorded on January 20, 2011 under section 132(4) of the Act, wherein he had admitted Rs. 15 crores as undisclosed income on oath. A notice under section 142(1) of the Act was issued to the assessee, in response to which, the assessee furnished return of income on September 29, 2011 declaring total income of Rs. 17,11,33,110/- for the year under consideration. The Assessing Officer observed that during the course of assessment, the assessee was asked to substantiate the income of Rs. 15 crores offered by it, which was admitted as undisclosed income in the statement of Shri Alpeshbhai G. Kotadia. During the course of search action, the assessee was also asked for the manner in which the income was derived. The assessee having failed to substantiate the manner in which the undisclosed income was derived, the Assessing Officer levied penalty of Rs. 15 lakhs at the rate of 10 per cent, of the undisclosed income admitted to Rs. 15 crores under section 271AAA of the Act. The assessee carried the matter in appeal before the Commissioner (Appeals), who, by an order dated February 12, 2014, deleted the penalty. The Revenue went in appeal to the Tribunal, but did not succeed.