TaxTMI 
TaxTMI 
2026 (4) TMI 1464
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....e of INR 3.89 crores declared on account of difference in closing stock and INR 1.79 crores on account of cash payment u/s 40A(3) of the Act, as admitted during the course of survey conducted u/s 133A of the Act on 13.10.2023 at the business premises of Bharat Construction Group of which the assessee is one of the sub-contractor. Thereafter, the assessment was completed wherein AO has made following additions:- (a) Unexplained and undisclosed expenditure u/s 69C by alleging purchases from Two parties as bogus amounting to INR 33,24,865/-; (b) Disallowance u/s 40a(ia) of INR 16,18,500/-; (c) Disallowance u/s 40A(3) of the Act INR 30,000/- 3. Besides this, AO treated the income declared in the return of income filed at INR 3.89 crores on account of difference in survey during the course of search as unexplained investment u/s 69A of the Act as against the business income declared by the assessee and charged special rate of tax as provided u/s 115BBE of the Act. Accordingly, the total income of the assessee was assessed at INR 10,03,80,095/-. 4. Against the said order, the assessee preferred appeal before Ld. CIT(A) wherein except the disallowance of I....
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....T(A) which are crucial/ goes root of the issue in hand. Under these circumstances, in our considered view, AO should be provided sufficient opportunity and accordingly, we restore this issue to the file of AO with the directions to make necessary verifications of the details of filed by the assessee to establish the purchases made from the alleged two suppliers as genuine and decide the issue in accordance with law. With these directions, Ground of appeal No.1 raised by the Revenue is allowed for statistical purposes. 10. Ground of appeal No.2 raised by the Revenue is with respect to the deletion of disallowance of INR 16,18,500/- made u/s 40(a)(ia) of the Act. 11. Heard the contentions of both the parties at length and perused the material available on record. The AO alleged that assessee made purchases of INR 53,94,983/- from one party namely, M/s. Tripura Enterprises and not deducted tax at source @ 0.1% as per section 194Q of the Act. It was the claim of the assessee that TDS is required to be made on the net amount of purchases i.e. net of GST and if the amount of GST is reduced from gross value of purchases, the net amount of purchases made from M/s Tripura Enterprises ....
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....e AR has stated that the AO considered the difference of closing stock as unexplained u/s 69A which was offered for tax and addition of same income will lead to double taxation. In para 2 of the assessment order, the AD has clearly stated that the assessee had voluntarily disclosed unaccounted business income of Rs. 3.89 crores being difference in the value of the closing stock. The AO during the assessment proceedings stated that the assessee has surrendered the said amount in the return as business income but the assessee was liable to declare the same as unaccounted business income. As per AO, since the nature & source of the business income was not explained, hence the said amount was taxed u/s 69A r.w.s. 115BBE of the Income Tax Act, 1961. The AR during the appellate proceedings stated that the stock surrendered by the assessee is related to the business of the assessee and the said fact is not disputed by the AO. Further, as per AR, the surrender was made under the head 'business income and not under the head 'unaccounted receipts'. Perusal of the assessment order also shows that the AO has acknowledged the fact that the surrender was made under the head ....
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....sections 69B and 1158BE, of the Income-tax Act, 1961- Business Income Chargeable as (Excess stock) Assessment year 2018-19 Pursuant to survey conducted at assessee's premises under section 133A, assessee surrendered amount of Rs. 28.53 lakhs on account of excess stock over and above its normal business income Assessing Officer observed that surrendered income on account of excess stock was chargeable under section 69B and, accordingly, taxed same as per provisions of section 1158BE It was observed that revenue was not able to point out that excess stock had any nexus with any other receipts other than business being carried on by assessee-Nature and source of such unaccounted stock was nothing but arising out of assessee's business operations There was no physical distinction between accounted stock and unaccounted stock Difference in stock so found out by authorities had no independent identity and was in terms of value terms only and thus part and parcel of entire stock Whether, in view of aforesaid, income so surrendered on account of investment in excess stock was from business operations and, thus, should be treated as business income Held, yes-Whether, therefore, said....
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....ar in the case of Bunty Kumar vs. ACIT, Central Circle, Jammu in ITA No. 215/Asr/2023 has held in para 7, 8 & 9 of its order as under: 7. Heard the rival contention, perused the material on record, the impugned order and case laws cited before us. Admittedly, the CIT appeal has restricted the addition made on account of excess stock found during survey of at Rs. 18,85,319/- as against Rs. 40 lacs, surrendered by the assessee but taxed u/s 69B r.w.s. 115BBE of the Act. The Id. counsel contended that the excess stock found during the survey was business income out of business carried out by the assessee but not declared in the books of account. Since, the excess stock found during the survey primarily pertains to the business carried out by the assessee, and secondly surrendered as business income during survey as accepted by the AO and hence, the excess stock would only be treated as income under the head business income and not as deemed income. In our view, the Id. CIT(A) was wrong in confirming the action of the AO regarding the applicability of the provisions of section 115BBE in case of the excess stock which was not separate or part of another lot of stock Accordingly....