https://www.taxtmi.com/caselaws?id=750910 The ITAT Ahmedabad addressed taxation of excess stock discovered during survey operations. The assessee argued that unaccounted purchases don't generate income until sold, claiming such stock was either sold or included in closing inventory. However, the assessee failed to provide documentary evidence from financial statements to support this claim. The tribunal rejected adding the full gross value of unaccounted stock to taxable income. Instead, it determined that only the profit element should be taxed. While the assessee suggested 2% profit rate based on disclosed business margins, the tribunal held that unaccounted stock should attract a higher profit rate than disclosed transactions. The ITAT ruled that profit embedded in unaccounted stock should be taxed at 5%, providing equitable treatment to both assessee and revenue. The appeal was decided partly in favor of the assessee. en-us Thu, 28 Mar 2024 00:00:00 +0530 Wed, 03 Apr 2024 06:26:36 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=750910 The ITAT Ahmedabad addressed taxation of excess stock discovered during survey operations. The assessee argued that unaccounted purchases don't generate income until sold, claiming such stock was either sold or included in closing inventory. However, the assessee failed to provide documentary evidence from financial statements to support this claim. The tribunal rejected adding the full gross value of unaccounted stock to taxable income. Instead, it determined that only the profit element should be taxed. While the assessee suggested 2% profit rate based on disclosed business margins, the tribunal held that unaccounted stock should attract a higher profit rate than disclosed transactions. The ITAT ruled that profit embedded in unaccounted stock should be taxed at 5%, providing equitable treatment to both assessee and revenue. The appeal was decided partly in favor of the assessee. Case-Laws Income Tax Thu, 28 Mar 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=750910