During survey proceedings, excess stock was found and ...

Excess stock found in survey not taxed under strict laws; AO's reasoned order upheld.

Case Laws     Income Tax

August 31, 2024

During survey proceedings, excess stock was found and surrendered by the assessee. The Assessing Officer (AO), after examining the findings, documents, and statements, accepted the surrendered income as business income chargeable to tax for the relevant year, applying due diligence. This view was deemed plausible considering the facts and circumstances, and no unsustainable aspect was pointed out. The Principal Commissioner of Income Tax (Central) did not establish how the AO's order was erroneous, despite citing court decisions. Merely stating the survey operation and excess stock attracting Section 115BBE cannot justify invoking Section 263. Consequently, the Principal Commissioner's order u/s 263 was set aside, and the assessee's appeal was allowed.

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