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2020 (1) TMI 287 - AT - Income TaxPenalty u/s 271AAB - search and survey operation under section 132(1) was conducted - assessee at the time of search admitted an undisclosed income of ₹ 1.90 Crores under section 132(4) - HELD THAT:- In this case there was an existing tax liability on the assessee to pay the taxes and, therefore, the Assessing officer should have adjusted the tax from the seized assets , hence, it cannot be said that the assessee has not complied the aforesaid requirement of provisions of section 271AAAB of the Act . Even otherwise, the assessee has also explained that it was not possessed of sufficient funds and the moment it got possessed of funds, it filed the revised return on 12.2.2014 and paid due taxes. So far as the contention of the Ld. Counsel for the assessee that the aforesaid surrender can not / does not fall within the definition of the undisclosed income, as defined under the provisions of section 271AAB is concerned, we do not agree with the above submissions. The assessee has duly made a statement that the aforesaid disclosure was on account of unrecorded transactions / discrepancies in the accounts and on account of certain loose papers found during the search action. In view of this, the aforesaid disclosure, in our view, falls within the scope of undisclosed income as provided under Explanation (C) to section 271AAB - We hold that the case of the assessee does not fall under the provisions of section 271AAB(3) of the Act but under the provisions of section 271AAB(1) of the Act and minimum penalty@ 10% of the undisclosed income is leviable. - Appeal of the assessee is partly allowed.
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