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2022 (7) TMI 1483 - AT - Income TaxCategorization of income Surrendered during survey - assessable as business income OR undisclosed income - huge difference of stock and excess cash found at the business premises - HELD THAT:- As excess stock was found in the business premises of the assessee on physical verification by the survey team with the help of employees of the assessee. Assessee, without objecting to the figures of excess stock arrived at by survey team accepted the same and offered the same as undisclosed income for the current year. In this context, we are of the considered view that since the excess stock of rice and paddy are the commodities in which the assessee was dealing under his regular business and accordingly any surrender on account of mismatch in physical stock and accounting balance of the stock can not be treated as income from the other source, the same has to be brought to tax under income from business, which the assessee has rightly done. See BAJARGAN TRADERS C/O. KALANI & CO. [2017 (11) TMI 388 - RAJASTHAN HIGH COURT] Thus we are of the opinion that the investment in the excess stock ought to be taxed under the head “business income” and not under the head “income from other sources”. Accordingly, we set aside the orders of the authorities below and direct the AO to delete the addition. Assessee appeal allowed.
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