ONE OF THE JEWELER SHOP HAS NOT DISCLOSED GOLD STOCK IN HIS BOOKS OF ACCOUNT. DURING SEARCH / SURVEY WHAT IS THE TAX TREATMENT FOR THE SAME UNDER THE PROVISIONS OF INCOME TAX ACT?
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Undisclosed gold stock in the books of jeweler shop
Replies (2)
I think Undisclosed gold stock will be treated as income from undisclosed sources / unexplained income in the form of gold and tax interest penalty under 271(1)(c) will be levied. Also a provision for prosecution.
1. If the Jewellery shop had not disclosed the stock in its books of accounts it becomes an unaccounted income and subsequently, it is dealt as per sec 69B.
2. Since you have mentioned that it is a stock, thus it becomes a part of business income which had escaped income tax.
3. An application cannot be moved u/s 132B(4) even if the nature and source of such income were explained to the satisfaction of the A.O.
4. The value of the above stock will be taxed as per sec 115BBE at a maximum marginal rate. Followed by penalty and prosecution.
Please correct me if the above solution has an alternative view.
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