, , आयकरअपीलीयअिधकरण इंदौर(cid:586)ायपीठ इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER ITA No. 778/Ind/2025 Assessment Year: 2019-20 Assessment Year: 2019-20 Assessment Year: 2019-20 Assessment Year: 2019-20 Assessment Year: 2019-20 Assessment Year: 2019-20 Assessment Year: 2019-20 Assessment Year: 2019-20 Assessment Year: 2019-20 Assessment Year: 2019-20 Assessment Year: 2019-20 Assessment Year: 2019-20 Assessment Year: 2019-20 Assessment Year: 2019-20 आदेश /O R D E R Per B.M. Biyani, A.M.:

Feeling aggrieved by appeal-order dated 10.07.2025 passed by learned Commissioner of Income-Tax (Appeals)-3, Bhopal [“CIT(A)”], which in turn arises out of assessment-order dated 29.09.2021 passed by learned ACIT, Central Circle-3, Indore [“AO”] u/s 143(3) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2019-20, the assessee has filed this appeal on following grounds:

“1. The appellant further craves leave to add, alter, and OR to amend the aforesaid grounds ofappealas when necessary.

2) That the learned Commissioner of Income tax (A) erred in law in not considering overall facts and circumstances i.e. the nature of business of the appellant in a small town. The appellant did not retract the surrender made during survey just to avoid litigation and to buy peace of mind yet bonafide and true explanation given regarding excess stock was not considered legitimate by treating the same as unexplained investment us 69B of the Act. Levy of tax at higher rate u/ s 115BBE of the Act is wholly unjustified, improper, bad in law and deserves to be quashed.

3) Without prejudice to above, the learned Commissioner of Income tax (A) further erred in law in not considering the fact that in case of small business entities, it is practically not possible to prepare physical inventory of stock at the close of the year and as per normal trade practice and tradition, the stock valuation is made on estimates based on average gross profiton sales. Adoption of such method resulted into accumulation of additional stock in trade over a number of years offered for tax but it was income from business only. Therefore, treatment of such additional income offered for tax as unexplained investment u/ s 69B of the Act read with section 115BBE of the Act is wholly unjustified, improper, bad in law and deserves to be quashed.

4. Thatthe learned Commissioner ofIncome tax (A) further erred in law in not appreciating the fact that the gold ornaments and jewellery found as excess stock overand above the books ofthe accounts cannot be identified individually because besides accumulation year after year, even purchase invoices of ornaments are being raised by the sellers in an consolidated manner by weighing the ornaments. Therefore, even from such invoices specific jewellery cannot be identified after they are mixed in the stock and for this reason, excess stock found cannot be considered as un-identified so as to treat the same as unexplained investmentu/ s 69B ofthe Act

5. That the Ld. CIT(A) further erred in not following various judgments of Income tax Appellate Tribunals including that of Jewellers wherein excess stock of ornaments found during survey which did not have any independent identity and mixed part of overall stock, was held to be represented by business income only. The practical approach in relation to specific trade carried on by the appellant should have been considered by Ld. CIT(A) while confirming the levy of tax u/ s115BBE of the Act instead of normal rate of tax on income surrendered. The order so passed by the Ld. CIT(A) confirming the taxability at higher rate on the value of excess stock found during survey is wholly unjustified, improper, bad in law and deserves to be quashed.”

2. Heard the learned Representatives of both sides at length and case-

records perused.

3. The background facts leading to present appeal are such that the assessee