The ITAT upheld an addition of ₹2.78 Crores for undisclosed aluminium stock, finding the taxpayer's claims of storing 28,000 kgs in a small premises implausible.
ITAT Upholds Addition for Undisclosed Aluminium Stock
The Income Tax Appellate Tribunal (ITAT) affirmed an addition of ₹2.78 Crores for undisclosed aluminium stock after determining that the appellant's claim of storing 28,000 kgs in a small premises was implausible. The tribunal emphasized that repeated admissions under oath justified treating the stock as undisclosed investment under Section 69.
The ruling underscores the importance of credible inventory management practices and the necessity for taxpayers to provide reasonable justifications for their stock holdings during assessments. The tribunal examined the physical capacity of the premises in relation to the claimed stock and deemed the explanation insufficient.
For taxation practitioners, this decision highlights the rigorous standards adopted by the ITAT in evaluating claims related to stock and inventory, stressing the need for clear evidence when large quantities are ostensibly maintained.
Citations
- Income Tax Officer v. GHI Metal & Alloys Pvt. Ltd. (2026) ITAT Delhi 1446429
