Customs assessable value cannot by itself prove unexplained expenditure when import records and books support the transaction value.

A customs assessable value fixed for duty purposes does not, by itself, establish suppression of purchase price or unexplained expenditure under section 69C when the assessee's books, import invoices, bills of entry and bank statements are reconciled and support the transaction value recorded in accounts. The higher customs valuation was treated as notional for duty assessment only, and it did not override the actual invoice value paid to suppliers. On those facts, the addition under section 69C was held unjustified and the deletion by the first appellate authority was upheld in favour of the assessee.

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Issues: Whether the addition made by treating the difference between the invoice value and the customs assessable value of imported goods as unexplained expenditure under section 69C was sustainable.

Analysis: The imported goods were valued by customs authorities for levy of duty on the basis of valuation rules, which permitted re-determination where the declared transaction value appeared low. The remand report and the customs communication confirmed that the assessable value was a notional value for customs duty purposes and did not enhance the actual invoice value recorded in the books. The assessee had reconciled the import bills, invoices, bills of entry and bank statements, and the material showed that the purchase value in the accounts reflected the transaction value paid to suppliers. On these facts, the higher assessable value could not be treated as suppression of purchase price or unexplained expenditure.

Conclusion: The addition under section 69C was not justified and the deletion made by the first appellate authority was upheld in favour of the assessee.

Final Conclusion: The revenue's challenge failed because the customs assessable value was held to be relevant only for duty assessment and not as proof of unaccounted purchases or unexplained expenditure.

Ratio Decidendi: A customs assessable value determined for duty purposes does not, by itself, establish unaccounted expenditure or suppression of purchase value when the assessee's transaction value is supported by reconciled books and documentary evidence.

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