| Question And Answer | |
|---|---|
| Subject: | In the business premises of A, survey took place, where-in excess stock was found for ` 15 lakh. In the statement recorded during the course of survey the assessee stated that excess stock is due to adjustment of profit by valuation of stock in earlier years and offered for tax in the current year. |
| Category: | Income-Tax |
| Querist: | Ravi aiftp |
| Answered by: | Mr .Ganesh Purohit, Sr. Advocate |
| Tags: | excess stock, s.133A, survey |
| Date: | January 13, 2024 |
Query:-
(i) Can the surrender of stock be treated as undisclosed u/s 69 of the Act?
(ii) Application of section 115 BBE is correct in law or it can be treated as business income taxable at normal rate?
(iii) Is it possible to apply 115BBE by passing 154 order when section 69 is not applied?
Answer :
(i) It is not clear from the question whether quantitative details of stock are maintained or not.
If quantitative details are not maintained then explanation of the assessee is valid in law, that it is out of accumulation of stock due to adjustment of G.P It is not the case of the department that purchase are not recorded.
In my opinion as there is proper explanation for excess stock section 69 is not applicable. The addition has to be made for excess stock as income from business.
(ii) In case of income from business section 115BE is not attracted. The assessment has to be made on normal rate of tax.
(iii) The provision of section 154 cannot be invoked as it is a debatable issue.
Satya Narayan Choudhary v. ACIT (2020) 80 ITR (Trib) 95(Jodhpur)
ACIT v. Suesh Kumar Gupta (2020) 206 TTJ (JP)1019
Surendra Kumar v. ACIT (C.G) ITA No. 148/Amritsar/2022 dated 10/10/2022 (A.Y. 2019-20)
(Source : AIFTP Journal June , 2023 )