Amount surrendered under unrecorded stock taxable as business income

Ashok K. Kriplani Vs CIT (ITAT Pune)

ITAT Pune held that that the amount surrendered under unrecorded stock has to be brought to tax under the head “business income” and no provision u/s. 115BBE of the Income Tax Act is attracted.

Facts- The assessee is an individual and conducts its business as proprietor of M/s. Mohan Dry Fruit. A survey was conducted on 04-10-2017 in the business premises of M/s. Mohan Dry Fruit u/s. 133A of the Act. The assessee filed return of income declaring a total income of Rs.1,38,40,940/-.

According to the AO that the assessee surrendered an amount of Rs.73,69,908/- on account of excess stock and Rs.8,09,032/- on account of excess cash totaling to Rs.81,78,941/- and included the said surrendered income in the computation of income as business income and he proceeded to exclude the above said both the amounts and treating the same as unaccounted stock u/s. 69 and excess cash u/s. 69A of the Act, charged the same u/s. 115BBE of the Act.

CIT(A) confirmed the order of AO in charging the additional income offered u/s. 115BBE of the Act. Being aggrieved, the present appeal is filed.

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