2024 (1) TMI 28

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....was framed by the Deputy Commissioner of Income Tax, Central Circle 3(3), Chennai for the assessment year 2019-2020 u/s. 143(3) of the Income Tax Act, 1961 (hereinafter 'the Act'), vide order dated 30.09.2021. 2. The first issue in this appeal of assessee is as regards to the order of ld. CIT(A) confirming the addition made by the ld. Assessing Officer being excess stock found during the course of survey and added as unexplained investment u/s. 69B of the Act amounting to Rs.54,89,056/-. 3. For this assessee has raised ground Nos. 1 to 5 which are argumentative and exhaustive, hence need not be reproduced. 4. Brief facts of the case are that assessee is an individual engaged in the business of trading in textile and manufacturing o....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....o be noted that this income shown is over and above the net profit from the accounted business. No proof given to show how it has arisen from his business. Thus, SVS Oil Mills case squarely applies in the assessee's case and not that of Hon'ble Rajasthan High Court decision in the case of Pr. CIT vs. Bajargan Traders in ITA No.258 of 2017. Even if it is taken that there are conflicting views, it is well settled principle of law that if there is conflicting views rendered by different High Courts, the view taken by the jurisdictional High Court is binding in the jurisdictional area of the respective High Court. The Hon'ble Bombay High Court in the case of Subramaniam -vs.- Siemens India Ltd. (1985) 156 ITR 11 (Bom.) held that so ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ssing Officer computed excess stock which reads as under:- ''Q.17 After physical verification of the stock available in the various floors of the premises at New no. 66, Old No. 300, Thambu Chetty street, Chennai, it is seen that there is total stock of Rs. 4,40,46,209/-. When compared to the closing stock going by the Tally accounting details there is an excess stock of Rs. 1,96,34,424 /-. The detailed computation of the computation of the stock as per the books and as per the physical verification is given as under. Closing stock as on 31-03-2018 as per P & L account of the return of income for the assessment year 2018-19 (F.Y 2017-18) Rs. 4,89,19,852/- Add: Purchases accounted in the tally accounting maintained at Thamb....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....te stocks of textile and handloom within one day. Even otherwise, the Revenue could not point out how they have valued each items because they have not valued in term of quality i.e value of the textile and handloom. In view of the above, it cannot be said that excess stock found, which is also based on estimate only, is unexplained investment. In view of the above, the same is to be assessed as business income as declared by the assessee and it cannot be charged at special rate of tax u/s. 115BBE of the Act. Hence, we direct the Assessing Officer to assess the income of excess closing stock found during the survey operation in the business premises of the assessee as ''business income'' and not as unexplained investment u/s. 69B of the Act....