P. Maneklal and Co Vs DCIT (ITAT Ahmedabad)
The case of P. Maneklal and Co. Vs. DCIT involves an appeal before the Income Tax Appellate Tribunal (ITAT), Ahmedabad, challenging an addition made to the assessee’s income under Section 69A of the Income-tax Act, 1961 (the Act), concerning an alleged unexplained difference in gold stock found during a survey operation.
Background of the Case
The assessee, P. Maneklal and Co., is a Partnership Firm engaged in the business of trading and re-selling Gold and Gold Ornaments. The dispute arose following a survey action carried out at the business premises, which housed three concurrent business concerns, including the assessee.
During the survey, a discrepancy was noted between the physical stock of gold ornaments and the stock recorded in the books of accounts.
- Stock as per books of accounts: 11,695 grams
- Physical stock found: 11,840 grams
- Excess stock: 145 grams
This excess stock, valued at Rs. 4,78,500, was considered unaccounted for by the Assessing Officer (AO).
Assessment and Initial Admissions
Shri Narendrakumar M. Soni, a partner of M/s. P. Maneklal & Co. and the primary person of the concern, had his statement recorded under Section 131(1A) of the Act during the survey. In his statement, he categorically admitted that he could not explain the reason for the excess gold stock of 145 grams. Furthermore, he admitted that the excess stock, valued at Rs. 4,78,500, would be declared as undisclosed income for the Assessment Year (AY) 2019-20 and offered for taxation in addition to the regular income.
