TaxTMI 
TaxTMI 
TaxTMI 
2024 (8) TMI 1589
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....hip business is simply the business income. 3.The appellant craves leave to add, amend, modify, or withdraw any of the grounds of appeals at the time of hearing." 3. Brief facts of the case is that the assessee is a partnership firm engaged in the business of trading in aluminium items. Survey operation u/s 133A of the Act carried out on 27.02.2019 at the business premises of the firm and during the course of survey operation physical stock was taken by the survey team and the assessee surrendered excess stock amounting to Rs.52,25,297/-. Thereafter the assessee filed return of income on 11.09.2019 declaring income of Rs.33,90,310/-. Case selected for compulsory scrutiny followed by validly serving notices u/s 1432) and 142(1) of the Act. During the course of assessment proceedings Ld. A.O observed that the assessee had included the excess stock amounting to Rs.52,25,297/- and paid taxes thereon as per the normal provisions of Income Tax Act. Ld. A.O further observed that the income surrendered by the assessee is in the nature of deemed income u/s 69 of the Act as the assessee did not given any explanation about the surrendered income and therefore provisions of Section 115BBE....
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....ons estimated the cost as per the books and then valued with the physical stock and calculated the excess stock figure. There is no finding of the survey authorities that any excess quantity of stock was found at the assessee's premises. He thus stated that this is not a case of any undisclosed investment or any other undisclosed income from other source other than the business activity carried by the assessee and is purely business income and therefore provisions of Section 115BBE of the Act should not be applied. Ld. Counsel for the assessee placed reliance on following decisions:- i) ACIT (Central), Ujjain V. M/s Italian Edibles Pvt. Ltd, Indore [(2023) 34ITJ Online 246 (Trib. Indore)] ii) DCIT (Central)-2 Indore Vs. Shri Krishna Kumar Verma, ITAT Indore (185/Ind/2020) iii) Shahnai Shriram Market Vs. Income Tax Officer (2018) 5 ITJ Online 268 (Trib. Indore) iv) Shri Premdeep Rajput Vs. ACIT (2023) 10 ITJ Online 239 (Trib.Indore) v) ACIt (Central) v/s Shri Anoop Neema, Indore (2022) 31 ITJ Online 524 (Trib. Indore). vi) Saaras Agro Industries, Khandwa and Other's V/s ACIT, Khandwa and other's (2022) 31 ITJ Online 473 (Trib. Indore). 5. Per contra Ld. Department....
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....ot mentioned about any stock records being maintained by the assessee nor any quantitative details is appearing in Form 3CD annexed to Form 3CB. The assessee admits to be calculated the closing stock on an estimated basis applied the method cost or market value, whichever is less and taking gross profit rate into consideration. In other words the closing stock is estimated by the assessee. Now on the date of survey when the survey team noticed that assessee is not maintaining any stock records then they based on the records of opening and closing stock as well as gross turnover calculated the stock in hand as per books as on 27.02.2019 at Rs.27,59,426/- and same is referred in Question-18 in the statement recorded during the survey proceedings (copy placed at page-35 of the paper book). I find that there is no calculation by the survey team as to how they arrived at the book stock of Rs.27,59,426/-. It itself proves that survey team has estimated the stock in hand and then calculated the excess stock after reducing the value of physical stock calculated by them. Now the Ld. A.O has invoked the provisions of Section 69 of the Act which provides that "where in the financial year imme....
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.... the addition of Ld. A.O of taxing the excess income as per the provisions of Section 115BBE of the Act. Though plethora of decisions have been referred by Ld. Counsel for the assessee which supports the view taken by me, however I would like to first refer and rely to the finding of this Tribunal in the case of Italian Edibles Pvt. Ltd (supra) wherein the Tribunal referring to plethora of decisions held as under: "11. Therefore, once the facts emerging from record shows that the excess stock found during survey was a part of entire lot of stock of assessee, part of which is recorded in 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 treated as deemed income u/s 69 or 69B of the act in view of the judgment of Hon'ble Rajasthan High Court and Coordinate Bench of this Tribunal cited above. Accordingly, this issue is decided in favour of the assessee and against the revenue. The orders of the authorities below qua this issue is set aside. The assessee succeeds to this extent. Acco....
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....urce of excess stock was the income earned during the relevant financial period from the trading of bullion, jewellery etc. and income from Adat/dalali and regarding excess cash found in his business premises the assessee also explained that though it was not recorded in the books of accounts but it was accrued to him on account of sale of jewellery in cash and the same pertains to his business activity of trading in business of jewellery. Therefore in the present case the assessee has successfully explained the source of excess stock and excess cash found during the course of search & survey operation and surrendered during the said operation. The Ld. CIT(DR) has not disputed or controverted very factual position that the assessee filed return of income including the surrendered amount and which was acceptedby the Assessing Officer without any dispute and without making any further addition in the hands of assessee u/s. 69A or any other section of the Act. In view of above as the assessee has successfully explained and established the source of excess stock and excess cash as his business activity and of trading in jewellery and gems and activity of Adat/dalali thus the benefit of....