Survey action 133A of the Act was carried out on the business premises. There was excess stock which assessee accepted and offered for taxation as business income. The Assessig Officer taxed the excess stock as undisclosed investment u/s 69 read with section 115BBE of the Act . On appeal the CIT(A) confirmed the addition . On appeal the Tribunal held that If assessee is carrying on business and has some undisclosed stock then same is taxable as an undisclosed business income. It cannot be held it is a case of undisclosed investment. Neither during the course of survey neither in the statement it was found nor has assessee ever stated that there is some undisclosed investment representing in the form of undisclosed assets. It is a case of excess stock found during the carrying of the business and stock is generated out of business income and therefore, the provision of section 69 on the facts of the case has no applicability. Addition was deleted . (ITA 4 No. 2285/Mum/2022 dt. 11/04/2023 ) (AY. 2019-2020)
Govind Gidomal Lulla v. ITO ( 2023) The Chamber’s Journal – May -2023 -P. 108 ( Mum)( Trib)
S. 69 :Unexplained investments -Survey – Excess stock – Assessable as business income and not as undisclosed investment [ S. 115BBE , 133A ]