SHRI VISHWAKARAMA JEWELLERS ,AKOLA vs. DCIT AKOLA CIRCLE, AKOLA

ITA 99/NAG/2025Status: DisposedITAT Nagpur22 September 2025AY 2017-18Bench: SHRI NARENDER KUMAR CHOUDHRY (Judicial Member)22 pages
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What did the Tribunal hold?

The Tribunal held that the excess stock found during the survey was part of the assessee's business stock and not an undisclosed investment. Therefore, it should be treated as business income and not under the deeming provisions of Section 69B, making Section 115BBE inapplicable.

What were the facts?

During a survey, excess stock valued at Rs. 82,58,593 and cash difference of Rs. 61,377 were found. The assessee offered a total of Rs. 85,00,000 as additional income. The AO treated this as undisclosed income under Section 69B and taxed it under Section 115BBE, reducing partner's remuneration.

What were the issues?

Whether excess stock found during a survey constitutes undisclosed investment taxable under Section 69B and Section 115BBE, or if it should be treated as business income.

Which sections of the Income-tax Act were involved?

Section 133A,Section 69B,Section 115BBE,Section 40(b)

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Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR

Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI K.M. ROY, ACCOUNTANT, MEMBER

For Appellant: Shri S.G. Gandhi
For Respondent: Shri Surjit Kumar Saha

PER K.M. ROY, A.M.

This appeal filed by the assessee is against the impugned order dated 20/01/2025, passed by the learned Commissioner of Income Tax (Appeal)–3, Nagpur, [“learned CIT(E)”] for the A.Y. 2017–18. 2. The assessee has raised following grounds of appeal: –

“1] Whether on the facts and circumstances of the case and in law, The Ld Commissioner of Income Tax (Appeals), NFAC, Delhi was right in confirming action of AO (NaFAC) in not allowing the excess stock found during the survey due to valuation difference which is not separate from the entire lot of stock of the assessee as stock pertaining to the business of assessee and treat as undisclosed income?

2 Shri Vishwakarma Jewellers ITA

The order continues below.

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