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2019 (11) TMI 327 - AT - Income TaxPenalty u/s 271AAB - whether the penalty levied by the AO under section 271AAB is valid as the initiation of penalty was under section 271(1)(c) of the Act by issuance of notice under section 274 read with section 271(1)(c) dated 30.03.2015 - HELD THAT:- From the penalty order or the order of CIT(A), it is not coming out that the alleged undisclosed income is false claim of deduction or claim of income is false or claim of expenditure is false. The definition provided in section 271AAB under Explanation (c) of undisclosed income sub-clause (ii) clarifies that any income of the specified previous year represented either wholly or partly by any entry represented in respect of expense recorded in the books of accounts maintained in the normal course of business should found to be false or would not have been found to be so had the search not being conducted. We noted that the aforesaid expenses have not been found to be false or it is not a case of the Revenue that such expenses are not allowable under the provisions of the Act. Here the simplicitor case is that the assessee during the course of search in the statement recorded under section 132(4) of the Act admitted this to be the income to avoid litigation and to buy peace of mind. It is good piece of evidence for making assessment but not for levy of penalty under section 271AAB of the Act because for levy of penalty falsity of the expense is a pre-requisite under the provision. Hence, we delete the penalty and allow the appeal of the assessee on merits. Appeal of the assessee is allowed
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