Search Results For: 132(4)


QUERY: In search cases, penalty is leviable at 10% of the undisclosed income u/s. 271AAB of the Act in certain cases, if the conditions mentioned therein are met. One of such conditions is that in the course of the search in which such income is disclosed, the assessee specifies the manner in which such income is derived and also substantiates the manner in which such income is derived. In case of cash transactions, sometimes there is no evidence to substantiate the manner of earning. Also in some cases, it may be difficult to so prove. For example, case of bogus expenses, etc. How such condition is to be fulfilled?
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Exception 2 to Explanation 5 to section 271(1) also provides similar condition, while interpreting the said Explanation the Gujarat High Court in CIT v. Mahendra C. Shah [299 ITR 305] has held as under:

“In so far as the alleged failure on the part of the assessee to specify in the statement under section 132(4) of the Act regarding the manner in which such income has been derived,