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2023 (10) TMI 256 - AT - Income TaxExcess stock found during the course of survey - income from business & profession OR unexplained investment - AO excessed stock valued u/s. 69B and computed tax u/s. 115BBE on the ground that the assessee could not explain source for excess stock found during the course of survey - HELD THAT:- We find that the excess stock found during the course of survey was mixed with regular stock in trade employed by the assessee in his business. The stock was not separately identified so as to assess it under the head ‘unexplained investment’. The assessee is having only one source of income i.e. income from trading in gold jewellery and silver articles. The entire stock found during the course of survey was available for trade at the business premise of the assessee and it was part and parcel of the regular business stock. Once, it is considered as regular business stock, then, obviously the source for acquisition of said stock is out of business income earned for the relevant assessment year, because, it is a general practice in business that whatever excess income earned is kept in the form of stock and debtors. Since the excess stock found during the course of survey was not separately identified and was mixed with regular business income, the assessee has rightly offered additional income declared during the course of survey under the head ‘income from business & profession’, and this position is supported by the decision of Bajargan Traders [2017 (11) TMI 388 - RAJASTHAN HIGH COURT] AO and the Ld. CIT(A) are erred in assessing additional income declared towards excess stock found during the course of survey u/s. 69B of the Act r.w.s. 115BBE of the Act, and thus, we direct the AO to assess the income under the head ‘income from business & profession’ as declared by the assessee. Decided in favour of assessee.
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