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2022 (1) TMI 872 - AT - Income TaxUnexplained excess cash and stock found and surrendered during the course of survey as business income - survey action u/s 133A - applicability of provisions of section 115BBE - CIT-A deleted addition - HELD THAT:- The crux of the statement given during the course of survey on the facts that the alleged stock was not accepted to be undisclosed income from other sources but was a part of the business income which required some reconciliation as books of account were not completed at the time of survey proceedings - since the income alleged excess stock and excess cash found during the course of survey is part of the business income, the provisions of section 115BBE would not be applicable as rightly held by the ld. CIT(A) and also in view of the facts that there was an amendment in the provisions of section 115BBE w.e.f. 1st April 2017 and the assessee’s case is pertaining to A.Y. 2015-16, thus, it is not be applicable on the case of assessee. Observation of the Ld. AO clearly indicates that he is not aware how to disclose the undisclosed income in the books of account. In case he was not satisfied with the book results, he has to first find error/mistake in the books of account, give detailed finding on it, and then should have re-casted the trading account. The manner in which the Ld. AO has made addition is not justified and thus Ld. CIT(A) has rightly deleted the addition by accepting book results shown by the assessee. AO has also not given weightage to the fact that once the excess stock has been debited in the Profit and Loss Account then the unsold stock as on 31st March 2015 also forms part of the closing stock which is to be valued as per the method regularly adopted by the assessee. We, find no reason to interfere in the finding of Ld. CIT(A) deleting the impugned addition made by the ld. AO and has also holding that the provisions of section 115BBE of the Act are not applicable on the assessee since the income declared during the course of survey is a ‘business income’. Accordingly all three grounds of appeal raised by the revenue are dismissed.
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