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TMI Blog2024 (11) TMI 1119X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee on 21-02-2018. During the course of survey operations, excess stock valued at Rs. 5,72,39,510/- was found. The assessee surrendered the same under the head Income from Business and accordingly filed the return of income declaring a total income of Rs. 7.74 crores including the income surrendered by the assessee. The assessee later filed a revised return of income declaring a total income of Rs. 6.91 crores. The AO took the view that the excess stock found during the course of survey operation is in the nature of unexplained investment falling within the ambit of sec.69 of the Act. Accordingly, the AO assessed the surrendered income of Rs. 5.72 crores, referred above, u/s 69 of the Act and accordingly charged income tax thereon u/s 115BBE of the Act. 5. In addition to the above, the AO disallowed 20% shop & office expenses amounting to Rs. 1,98,484/- and 20% of packing expenses amounting to Rs. 2,51,498/- observing that they are supported by self made vouchers, which are not open for verification. 6. In the appellate proceedings, the Ld CIT(A) accepted the contentions of the assessee that the income surrendered by the assessee is assessable under the head Income fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year." 6.15 On perusal of section 69 of the Act, it is clear that section 69 is attracted where the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory. In the instant case the entries in respect of excess stock found during the course of survey amounting to Rs. 5,72,39,510/- have been made in the Books of Accounts. The said amount of Rs. 5,72,39,510/- on account of excess stock was included in the computation of income and declared total income of 6,91,29,140 u/s. 139(5) of the Act. 6.16 In a case where source of investment/expenditure is clearly identifiab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxmann.com 655 (Chandigarh - Trib.)wherein the Hon'ble ITAT CHANDIGARH BENCH 'B'vide order dated JANUARY 23, 2024 has held as under:- "Section 69A, read with sections 69B and 28(i), of the Income-tax Act, 1961 - Unexplained money (Amount disclosed at survey) - Assessment year 2019-20 - During course of survey under section 133A, assessee surrendered excess stock, cash and receivables, stating that same was to be taxed as business income - Assessing Officer, however, treated said surrendered amount as unexplained investment under sections 69A and 69B and charged same to tax as per provisions of section 115BBE - Whether since during survey proceedings, assessee was confronted not only with discrepancies found but also with nature and source thereof and it had emerged that source of income of assessee was from its business operations, income surrendered by assessee during survey could not be brought to tax under deeming provisions of section 69A and 69B and same had been rightly offered to tax by assessee under head of business income - Held, yes [Paras 29 and 30] [In favour of assessee]" 6.19 Reliance is placed in the case of MontuShalluKnitwearsv. Deputy Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee along with return of income, closing stock was higher than amount worked out by Assessing Officer - Assessing Officer noticing that assessee had admitted excess stock, presumed that assessee had invested income from undisclosed sources, and accordingly, added difference in value of stock to income of assessee under section 69 - Assessee submitted that by admitting closing stock more than stock found at time of inventory, assessee had disclosed more income and as such, no further addition could be made for excess stock - Whether since assessee had himself reflected quantum of closing stock in its books of account, closing stock shown by assessee could not be said to be unexplained investment of assessee and no addition could be sustained in this regard - Held yes [Para 16] [In favour of assessee] II. Section 69 of the Income-tax Act, 1961 - Unexplained investments (Construction of house property) - Assessment year 1996-97 - During a survey under section 133A conducted at premises of assessee, Assessing Officer found a number of vouchers and bills amounting to Rs. 6.50 lakhs relating to construction of house property by assessee and same was treated as unexplained investment - I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ock amounting to Rs. 5,72,39,510/- as unexplained investment u/s 69 of the Act and tax it in terms of provision of section 115BBE of the Act. Thus, these grounds of appeal are allowed." 8. The assessee herein is a Partnership Firm. There is no dispute with regard to the fact that the assessee does not have any other income other than the business income. Hence the assessee could have accumulated the stock out its business income only, which was not disclosed earlier. In the cases relied upon by Ld CIT(A), the co-ordinate benches of Tribunal and the Hon'ble High Courts have held that the discrepancy in the stock found during the course of search/survey operations should be assessed as business income only. Since the Ld CIT(A) has rendered his decision on the basis of various case laws and since the revenue did not contradict them, we affirm the order passed by Ld CIT(A) on this issue. 9. The appeal filed by the assessee relates to the adhoc disallowance of expenses incurred shop expenses, office expenses and packing expenses made by the AO and confirmed by Ld CIT(A). We notice that the AO has verified expenses on test check basis and noticed that they are supported by self made vo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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