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2019 (6) TMI 545 - AT - Income TaxPenalty u/s 271AAB - treating the declared income during the course of search as ‘undisclosed income’ - search and seizure action u/s 132(1) - HELD THAT:- No question was raised or asked about the undisclosed income for purchase of iron ore as recorded in the exehibit-2 page 25 at the time of search then the disclosure made by the assessee vide letter dated 25.01.2013 on account of the cash purchases cannot be considered as undisclosed income for the purpose of levy of penalty u/s 271AAB. Neither the investigating team nor the AO during the assessment proceedings detected any excess stock or discrepancy in the stock as recorded in the books of accounts by the assessee in comparison to the stock which was found at the time of search and seizure action. Even there is payment for purchase of raw material the said outgo of money itself cannot be treated as undisclosed income of the assessee in the absence of corresponding asset found at the time of search. There was no discrepancy found in the physical stock as well as stock recorded in the books of account despite the physical verification and inventorization carried out of investigating team at the time of search then the mere details of payment for purchases in cash would not constitute undisclosed income as per the definition provided in explanation to Section 271AAB. Accordingly, the penalty levied u/s 271AAB is not sustainable and the same is liable to be deleted. - Decided in favour of assessee.
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