Excess Stock is Business Income, Not unexplained investment: Mumbai ITAT

Govind Gidomal Lulla Vs CIT (ITAT Mumbai) Income Tax Appellate Tribunal (ITAT), Mumbai Bench, has delivered a ruling in favor of Govind Gidomal Lulla, determining that excess stock discovered during a survey, if it originates from and is part of the assessee’s regular business operations, constitutes “undeclared business income” rather than “unexplained investment” under Section 69 of the Income Tax Act, 1961. This distinction is critical as it exempts such income from the higher tax rates stipulated under Section 115BBE. The appeal stemmed from an assessment for ...