Case Law Details
Fathima Jewellers Vs DCIT (ITAT Chennai)
In the case of Fathima Jewellers vs. DCIT (ITAT Chennai), the Income Tax Appellate Tribunal (ITAT) provided a crucial ruling regarding excess gold jewellery stock discovered during a survey. The ITAT clarified that this stock should not be considered an unexplained investment under the Income Tax Act.
Detailed Analysis:
1. Background: Fathima Jewellers is a retail business dealing in gold and silver jewellery. In February 2019, a survey was conducted under Section 133A of the Income Tax Act at the business premises of Fathima Jewellers.
2. Assessment and Controversy: During the subsequent scrutiny assessment, the Assessing Officer (AO) treated the excess stock, valued at Rs. 40,77,814, as unexplained investment under Section 69B of the Income Tax Act. The AO’s reasoning was that this stock was not accounted for and, therefore, constituted unexplained investment.
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