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2022 (10) TMI 716 - AT - Income TaxAddition u/s 69 r.w.s 115BBE - difference as excess stock instead of short stock as noticed by the department - HELD THAT:- As evident from the record that the excess stock found during the survey was nothing but the Business Stock carried on by assessee which was not declared in the books of accounts and since there is direct nexus of stock found during survey and business carried on by the assessee. Therefore, in our view, the excess stock is only to be treated as income under the head Business and not under deemed income - excess stock found during the survey was not separately and clearly identifiable but was part of mixed lots of stock found at the premises which included the declared stock and stock of sister concern also. In these circumstances, the provisions of section 69 cannot be invoked and it should be taxable as business income The applicability of provisions of section 115BBE are not relevant in the present case as no excess stock was found. Even otherwise the provisions of section 115BBE cannot be made applicable particularly where the assessee has made a statement that the excess stock was a result of suppression of profit in respect of sales made outside the books of accounts. Therefore, in the present case, investment in excess stock computed by the department is liable to be treated as business income and to be taxed under normal provisions and not under the chapter no XII. In the case of ‘M/S BAJAJ SONS LTD.[2021 (5) TMI 956 - ITAT CHANDIGARH] it has been held that provisions of section 115BBE are not applicable where Surrender is made to cover any discrepancy. The action of the lower authorities in invoking provisions of Section 115BBE on the surrender income is perverse to the facts on record and held to be bad in law. AO is directed to compute the said surrendered income under normal provisions as applicable to the business income of the assessee. Appeal filed by the assessee is allowed.
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