Rajeev Jain Vs PCIT (Central) (ITAT Jaipur)
ITAT Jaipur Upholds Section 263 Revision: Undisclosed Stock Taxable under Section 115BBE as Unexplained Income, Not Normal Business Profit
This summary details the Income Tax Appellate Tribunal (ITAT), Jaipur Bench’s decision in the case of Rajeev Jain Vs PCIT (Central) concerning the revisional jurisdiction of the Principal Commissioner of Income Tax (PCIT) to subject undisclosed income to a higher tax rate. The central issue was whether the value of excess stock found during a survey should be treated as normal business income or as “unexplained investment” taxable under the punitive provisions of Section 115BBE of the Income Tax Act, 1961.
Background of the Case
The appeals were filed by the assessee, Rajeev Jain (proprietor of M/s Sandeep Micron), challenging two similar revisional orders passed by the PCIT (Central), Jaipur, under Section 263 of the Income Tax Act, 1961, for the Assessment Year 2018-19.
A survey action under Section 133A was conducted on the assessee’s business premises (manufacturing and trading of mineral products) on October 11, 2017. During the survey, an excess stock of ₹15,21,176/- was found compared to the book value. The assessee surrendered this amount as additional undisclosed income for the year under consideration and subsequently included it in his filed Return of Income.
