2023 (11) TMI 1099

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....me of Rs. 40 lacs on account of excess stock as unexplained stock u/s 69B and invoking the provisions of section 115BBE of the Income Tax Act, 1961. 2. At the outset, the ld. counsel for the assessee submitted that the ld. CIT(A) has confirmed the addition ignoring the fact that the assessee has earned business income as per the undisclosed income during survey from sale/purchase of goods and material from regular business activities and that the AO has not been able to prove that the assessee was found involved in activities other than the business activities. The ld. AR argued that during scrutiny assessment proceedings, the AO has accepted the business income declared by the appellant in return of income on account of excess stock dur....

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.... where it was held vide para 12 is as under: "12. That the excess stock found during the survey is part of the total stock and entire lot of stock of the assessee, part of which is recorded in the books of account and part of the same was not found recorded and therefore, treated as excess stock at the time of survey and consequently surrendered by the assessee and also offered to tax in the return of income then the excess stock cannot be as investment in specified asset or the assessee is owner of any bullion, jewellery or other valuable articles as per the provisions of section 69B of the Act. An identical issue has been considered and decided by Hon'ble High Court as well as this Tribunal in series of cases some of these ar....

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....ited interpretation by reason of its context and take its meaning from the specific term used in the provision. Therefore, the term other valuable articles would draw the meaning from the specific terms used in the provision of section 69B which is bullion and jewellery. Hence the other valuable articles shall be in the nature of the valuable article like bullion and jewellery and therefore, it must be a substitute of money like bullion and jewellery which has the liquidity and negotiability like money/currency. Therefore the excess stock found during the course of search which is not separable from the whole lot of stock of the assessee generated as a result of business activity of the assessee company and the same cannot....