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TMI BlogUrgent Solution required- Excess Stock found during SurveyX X X X Extracts X X X X X X X X Extracts X X X X ..... Urgent Solution required- Excess Stock found during Survey X X X X Extracts X X X X X X X X Extracts X X X X ..... red and due taxes were paid. IT Return was also filed which reflects Net Taxable Income i.e. Normal profit + Income declared towards excess stock Rs.50 Lakh. Assessee passed the entry in the books of account for excess stock on the date of Survey. He debited Excess Stock (and incrased stock with that amount, no quantity details are maintained-Business of Wood) and credited Income Declared Towards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excess Stock A/c which is transferred to Profit and Loss on credit side for FY 2008-09, During the scrutniy for AY 2009-10. Jt Com of IT cited ITAT judgement, Income-Tax Officer. Versus Smt. Sundari Chimandas (2008 -TMI - 68947 - ITAT MADRAS , Other Citation: ITR-SUPP 309, 278) . He says though the assessee has not shown purchases and there are unexplained expenditures towards purchases, that is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... why excess stock came into existence. He says besides Rs.50 Lakh declared towards Excess stock, he will be making further addition of Rs. 50 Lakh as the assess has increased the stock, which he will showing/ has shown as opening stock in the next period, which as per Section 69C is not an allowable expenditure. Above case of Sundari Chimandas he cites for his action. The said case I presume was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t argued properly, which results in taxing the income twice. Also in this case assessee expressly shown purchases in Trading A/c, however the whole amount as declared was brought to Tax. I have searched plethora of judgements and nowhere I could found such case as that of Sundari Chimandas. Even the IT departments own survey manual says that Excess Stock found is an Investment. While our AO says i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is unexplained expenditure or say he wants to tax the declared amount of both count i.e as unexplained investment on one hand and also as unexplained expenditure u/s 69C. Urgent opinions are needed CA. P C Bhandari-Akola (MS) Reply By DEV KUMAR KOTHARI: The Reply: 2008 - TMI - 68947 - ITAT MADRAS Income-Tax Officer. Versus Smt. Sundari Chimandas Reply By ranganath shenoy: The Reply: What ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is their regular method of purchase.Is it cash purchase or credit purchase ,where payment is made after realisation of sales. X X X X Extracts X X X X X X X X Extracts X X X X
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