Sumangal Gems v. DCIT - Taxpublishers.in

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The Tax Publishers2020 TaxPub(DT) 1422 (Jp-Trib) : (2020) 084 ITR (Trib) 0040

INCOME TAX ACT, 1961

Section 271AAB

AO had merely gone by surrender statement where stock had been valued at market price prevailing as on the date of search and had not examined the matter from perspective of determining any excess stock and cost of such stock which was not recorded in books of accounts. There was no finding that there was any excess stock which had been physically found and which had not been recorded in books of accounts as on date of search. In light of this it was thus clear that difference in stock of goods as per books and as found at the time of search was on account of valuation of such stock at market value instead of cost and same could not be a basis to hold that it represented undisclosed income so defined in explanation to section 271AAB and therefore, no penalty could be levied.

Penalty under section 271AAB - Leviability - Surrender on account of excess value of stock during the course of search -

Assessee during the course of search made surrender on account of excess value of stock and assessment under section 143(3) read with section 153B(1)(b) was completed accepting returned income. Also AO levied penalty under section 171AAB as regards amount srrendered.Held: AO had merely gone by surrender statement where stock had been valued at market price prevailing as on the date of search and had not examined the matter from perspective of determining any excess stock and cost of such stock which was not recorded in books of accounts. There was no finding that there was any excess stock which had been physically found and which had not been recorded in books of accounts as on date of search. In light of this it was thus clear that difference in stock of goods as per books and as found at the time of search was on account of valuation of such stock at market value instead of cost and same could not be a basis to hold that it represented undisclosed income so defined in explanation to section 271AAB and therefore, no penalty could be levied.

Relied:Padam Chand Pungliya v. Asstt. CIT [ITA No. 112/JP/2018, dt. 5-4-2019] : 2019 TaxPub(DT) 2207 (Jp-Trib).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

IN THE ITAT, JAIPUR BENCH