Undisclosed stock

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CA BIREN SHAH (Querist)
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23 April 2012 sir, my book stock is 100000. during survey physical stock found at factory amounts to rs. 300000.
Q. what would be tax implications and how i should account it in books of account.?

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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28 April 2012 The difference shall be treated as undisclosed income provided you can prove that the excess stock is not salable and is dead and the market value is Zero. If you want to book the stock in your books then debit stock and credit P & L A/c

CA BIREN SHAH

CA BIREN SHAH (Querist)
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28 April 2012 sir, whether concealment penalty will be levied or not?

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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29 April 2012 Both are possible. First at the time of your assessment the stock value difference will be added as undisclosed income and on that tax + Interest u/s 234A, B & C will be levied and during the assessment proceedings the proceedings u/s 271(1)(c) will be initiated and that will be 100% to 300% of the tax to be evaded on the amount of difference between stock value. After that within 6 months the penalty will be levied.

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