TaxTMI 
TaxTMI 
2024 (1) TMI 418
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....he assessment year 2019-20 u/s. 143(3) of the Income Tax Act, 1961 (hereinafter the 'Act'), vide order dated 30.09.2021. 2. The only issue in this appeal of assessee is as regards to the order of CIT(A) confirming the action of AO in making addition of unexplained investment in stock being difference in valuation of stock found during the course of survey conducted u/s. 133A of the Act and added u/s. 69B of the Act and also applied higher rate of tax by invoking the provisions of section 115BBE of the Act. For this, assessee has raised various grounds which are argumentative, exhaustive and hence, need not be reproduced. 3. Briefly stated facts are that the assessee is engaged in the business of wholesale trading of stainless steel it....
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.... by relying on the decision of Hon'ble High Court of Madras in the case of M/s.SVS Oils Mills, supra. The CIT(A) decided the issue vide para 7.7 & 7.9 as under:- 7.7 It is clear from the above that the excess stock is unaccounted and the assessee has not furnished any satisfactory explanation as to how the source for the investment in excess stock emerged from its business or other known sources. Thus, the twin conditions in section 69B are satisfied. Hence, the excess stock is assessable u/s 69B. Thus the claim of the assessee in the grounds that the AO had ulterior motive to assess it u/s 69B is fatally wrong 7.9 Similar issue had come up for consideration before the jurisdictional Madras High court in the case of Ms. SV....
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....w, I am bound to follow the jurisdictional Madras High Court in the case of SVS Oil Mills relied on by the AO and have no other alternative except to confirm the order of the AO assessing the unexplained excess stock as unexplained investment u/s 69B of the Act. Even during the appeal proceeding, the assessee except stating that the AO was wrong in treating the impugned amount as unexplained investment in excess stock, no corroborative evidence was furnished. I therefore sustain the assessment of excess stock found during survey u/s 69B and taxed under the rates u/s 115BBE and dismiss the grounds raised. Aggrieved, now assessee is in appeal before the Tribunal. 5. We have heard rival contentions and gone through the facts and circumst....
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....s under:- Opening Stock 89,32,200.00 Purchases (01.04.2018 - 06.02.2019) 11,95,49,972.00 Direct Expenses (01.4.2018-06.02.2019) 6,91,885.00 GP 9% 1,07,33,678.28 Total 13,99,07,835.28 Sales (01.04.2018-06.02.2019) 11,92,63,092.00 Closing Stock as on 06.02.2019 2,06,44,743.28 Alleged stock at the time of survey 1,92,95,775.00 Excess Stock (13,48,968.28) The assessee has taken GP at 9% as the average GP of previous three assessment years and thereafter computed the excess stock at Rs. 13,48,968/-. The ld.counsel now stated that as per books of accounts, stock as on 06.02.2019 is Rs. 2,06,44,743/- and therefore, even assuming without conceding the physical stock inventory had been properl....
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....stock of leather and allied products has been found and such excess stock was noticed when physical inventory of stock in trade of the assessee was taken up. Further, said stock is mixed with regular stock in trade of the assessee. The assessee has explained before the Assessing Officer that it could not immediately reconcile difference in stock and thus, to buy peace from Department, additional income has been offered under the head income from business, equivalent to the amount of excess stock found during the course of survey. The explanation offered by the assessee either during the course of survey or during the assessment proceedings is not negated with any other evidences to disprove the claim of the assessee that source for acquisit....