Apka Faisala Gold Palace Vs ACIT-Central Circle (ITAT Jabalpur)
Ex-parte dismissal by CIT(A) not sustainable – Stock Surrender in survey- decision on applicability of s.69B vs treatment as business income – matter remanded
Tribunal examined whether excess stock surrendered during survey should be taxed u/s 115BBE or treated as part of business income.
Assessee, a jewellery trader, filed return declaring ₹1.35 crore. During survey u/s 133A conducted on 18/02/2019, excess stock of ₹1,05,15,579/- was found & surrendered. AO held that such stock was unexplained investment u/s 69B & taxed it u/s 115BBE. On appeal, CIT(A), Raipur-3, dismissed Assessee’s appeal ex parte, without addressing submissions that surrendered stock was duly entered in books & ought to be treated as business income.
Before Tribunal, Assessee argued that CIT(A) ignored binding judicial precedents holding surrendered stock as business income & mechanically upheld AO’s view. It was submitted that adequate opportunity was not provided. Revenue contended that since surrender was admitted, addition was rightly confirmed.
Tribunal noted that CIT(A) passed the order without considering Assessee’s explanations & without recording findings on crucial grounds. To uphold principles of natural justice, Tribunal set aside CIT(A)’s order & remanded matter back for fresh adjudication by way of a speaking order, after giving adequate opportunity to Assessee. Assessee was also directed not to seek adjournments unnecessarily & to co-operate.
