Survey action 133A of the Act was carried out on the business premises. AO in assessment noted that, during the course of survey proceedings, inventory of stock was prepared and as on the date of survey, in books of account the stock was shown,However, the stock as per the physical inventory was arrived. The  stock discrepancy  which assessee accepted and offered for taxation as business income. However, AO taxed the excess stock as undisclosed investment u/s 69 and subsequently u/s 115BBE. CIT(A) confirmed the action of AO.  Tribunl  held that  the Assessee offered the difference for taxation as business income, because the excess stock was said to be purely purchase of material for making sweets during the course of the business. 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.  (ITA No. 2285/Mum/2022 dt. 11/04/2023)  (AY 2019-2020)