IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER AND SHRI K.M. ROY, ACCOUNTANT, MEMBER (Assessment Year : 2017–18) Shri Vishwakarma Jewellers M.G. Road, Akola 444 001 ……………. Appellant PAN – ADBFS5406Q v/s Dy. Commissioner of Income Tax ……………. Respondent Akola Circle, Akola Assessee by : Shri S.G. Gandhi Revenue by : Shri Surjit Kumar Saha Date of Hearing – 24/06/2025 Date of Order – 22/09/2025

O R D E R

PER K.M. ROY, A.M.

This appeal filed by the assessee is against the impugned order dated 20/01/2025, passed by the learned Commissioner of Income Tax (Appeal)–3, Nagpur, [“learned CIT(E)”] for the A.Y. 2017–18. 2. The assessee has raised following grounds of appeal: –

“1] Whether on the facts and circumstances of the case and in law, The Ld Commissioner of Income Tax (Appeals), NFAC, Delhi was right in confirming action of AO (NaFAC) in not allowing the excess stock found during the survey due to valuation difference which is not separate from the entire lot of stock of the assessee as stock pertaining to the business of assessee and treat as undisclosed income?

2] Whether on the facts and circumstances of the case and in law, Ld. CIT (A) has erred in law as much as in fact in not holding that valuation report obtained by the Survey Team during the course of survey was incorrect though the assessee has accepted the same and offered the amount of difference as business income of the assessment year under consideration?

3] Whether having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in treating a sum of Rs.69,37,859/- as undisclosed investment u/s 69B and further erred in charging tax as per provisions of section 115BBE and not considering the amount offered as income for the purpose of allowance of partners' remuneration ?

4] Whether on the facts and circumstances of the case, action of Ld.CIT (A) in treating Rs.69,37,859/- as undisclosed income/investment u/s 69B of IT Act and not appreciating/considering the fact that income offered and assessed has got direct nexus with the business income of assessee and the basis of stock valuation was same as followed consistently in earlier years and accepted by the "Department" ?

3. Facts in Brief:– The assessee commenced its business on 01/06/2016 as partnership firm constituted by three brothers by taking over a running business of erstwhile proprietorship concern of one of the partners. It is engaged in the business of trading in gold, silver, diamonds etc. A survey action under section 133A of the Income Tax Act, 1961 (for short "the Act") was conducted on the business premise of the assessee on 18/01/2017. During the survey, the stock with the assessee was valued at ` 13.43,14,843, by the Govt. Registered Valuer, whereas as per the Trial Balance prepared by the assessee, the stock was valued at ` 12,60,56,250. This difference of ` 82,58,593, along with the cash difference of ` 61,377, was offered by the assessee as additional income over and above the regular income for the assessment year 2017-18. The total declaration was given of ` 85,00,000, which covers up the above two discrepancies mentioned. Subsequently, the assessee filed return of income for the assessment year 2017-18 on 09/10/2017 declaring total income of ` 97,04,550. The case was selected for complete scrutiny. During the assessment proceedings, the Assessing Officer did not accept the contention of the assessee that the declaration of additional income of ` 85,00,000 was part of its business income. The Assessing Officer held this additional income as income from undisclosed sources under section 69B of the Act. Accordingly, the Partners' remuneration was reduced proportionately. Further, the Assessing Officer taxed the income under section 69B at higher rates as per provisions of section 115BBE of the Act. The assessment proceedings were completed by passing order under section 143