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TMI Blog2022 (5) TMI 778X X X X Extracts X X X X X X X X Extracts X X X X ..... on can be restricted to that extent. In view of this the order of the learned CIT (A) is not sustainable in law. In view of the above findings, we set aside the whole issue back to the file of the learned Assessing Officer with a direction to the assessee to reconcile the purchases with the invoices value stated by customs authority from the books of account of the assessee. The relevance to the assessable value is not the reason to make an addition as it is value only for the purposes of levy of customs duty. Assessee is directed to produce all the invoices mentioned in the information received from customs authority and also the respective custom duty paid against each of the invoices. AO is directed to examine the same and if still a different arises, the assessee may be given opportunity of hearing to explain the same and thereafter the issue may be decided on the merits of the case. Thus we allow the Grounds raised by the ld AO accordingly. - ITA No. 3765/Mum/2019, CO No. 122/Mum/2021 (Arising in ITA no.3765/Mum/2019) - - - Dated:- 13-5-2022 - Shri Prashant Maharishi, AM And Shri Rahul Chaudhary, JM For the Assessee : Shri Pranav Phadke, AR For the Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25,74,120/ . Return was picked up for scrutiny. The assessee is carrying on the business in proprietary concern of Chandak Expo International. He imports the Yarn. The learned Assessing Officer examined the custom duty payments, he found that assessee has claimed custom duty of ₹ 2,11,16,502/ in the books of account, however according to ITS details custom duty paid by assessee was ₹ 2,50,90,954/ . There was discrepancy of ₹ 39,74,452/ . The learned Assessing Officer requested details from custom authorities. As per the information received, assessee has imported goods worth ₹ 10,71,83,467/ and paid custom duty of ₹ 2,50,90,954-/ . However, the books of accounts shows the purchase of only ₹ 7,92,84,701/ and custom duty payment of ₹ 2,11,16,502/ . The assessee was questioned vide show cause notice dated 18th December, 2017, which was replied on 21st December, 2017. Assessee submitted that due to multiple transactions he is not in a position to reconcile discrepancy and agreed that an amount of ₹ 3,18,73,218/ may be taken as his undisclosed turnover and on which gross profit rate of 9.836 percentage may be applied as addition. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into consideration for addition. In addition to the above it is also noted that appellant has also not disclosed custom duty paid on unrecorded transactions to the extent of Rs.39,74,452/- This amount needs to be added as unexplained expenditure u/s.69C on the Income Tax Act. The conclusion is supported by recent judgement of the Hon'ble Gujarat High Court in case of M/s. Hytaisun Magnetics Ltd vs. Jt. Commissioner of Income (2018) 95 taxmann.com248(Gujarat). It is held as under: The Assessing Officer after declaring that the return was invalid proceeded to frame best judgment assessemtn. In the process, he noticed that the assessee had made unrecorded purchases for a total consideration of rs.5.01 crores (rounded off) during the year under consideration. He estimated the excise duty of such purchases at rs.1.25 crores (rounded off). To the total of two i.e. rs.6.26 crores(rounded off), he estimated the assessee's profit at the rate of 10 percent and added Rs.62.65 lakhs (rounded off) by the way of additional income. He also added excise duty of R.1.25 crores which the assessee had evaded to come to total addition of Rs.1.88 crores (para 11) The Tribunal gave ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding sales have not been disputed. The additions should be limited to G/P which A.O. himself have calculated at Rs.31,34,731/-. Addition of this G/P on unrecorded transaction is therefore confirmed. The Peak amount of Rs.11,95,9637- as discussed above is also to be added in addition to G/P. The custom duty paid for unrecorded purchases i.e. Rs.39,74,452/ due should be added as unexplained expenditure u/s.69C of the act. The additions is confirmed to the extent as discussed above. The ground of appeal are therefore Partly allowed. 06. Therefore, both the parties are aggrieved and are in appeal before us. 07. The learned Departmental Representative reiterated the facts and supported the order of the learned Assessing Officer. 08. The learned Authorised Representative for deleting of addition under section 69C of the Act supported the order of the learned CIT(A) however, with respect to the addition of peak u/s 69C of the Act submitted that when section 69C of the Act has been deleted there is no reason to uphold the addition on account of custom duty and on account of peak amount. 09. We have carefully considered the rival contentions and perused the orders of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ils] and from such quantitative details, the sales have been made of the similar quantity during the year, then only the addition could have been restricted to G P . Otherwise, without that examination probably addition could not have been deleted. There is no material available with the learned CIT (A) to hold so. We also failed to understand that in such circumstances how the peak amount can be worked out and addition can be restricted to that extent. In view of this the order of the learned CIT (A) is not sustainable in law. In view of the above findings, we set aside the whole issue back to the file of the learned Assessing Officer with a direction to the assessee to reconcile the purchases with the invoices value stated by customs authority from the books of account of the assessee. The relevance to the assessable value is not the reason to make an addition as it is value only for the purposes of levy of customs duty. Assessee is directed to produce all the invoices mentioned in the information received from customs authority and also the respective custom duty paid against each of the invoices. The learned Assessing Officer is directed to examine the same and if still a diffe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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