Understock found during survey operation by incometax

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anand kumar (Querist)
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11 April 2012 we have a textile shop and recently during a survey operation the income tax authorities found an deficiet/understock of around 5 lacs in our premises .we would like to know how will that be treated by the department

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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12 April 2012 Mr Anand Kumar,
It shows that your accounts are not correct and secondly they conclude that at that moment a sale of Rs5laks are suppressed and further make an estimation of such evasion throughout the year.They may add at least double of that amount to the taxable amount.

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anand kumar

anand kumar (Querist)
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14 April 2012 i was not in the premises for 1 yr as i was not keeeping well. i think the stock has been stolen by my staff .how do i go with this

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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14 April 2012 Mr A Kumar,
There should be a police complaint,before the date of IT inspection to support your claim.However, if you proove your absense to the IT authorities,they may show some sympathy. Destruction of damaged property,with some accounting adjustments and cooperation of IT dept is one of the ways. You can claim that some stock was destroyed due their old and worn out condition.....MJK

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