TaxTMI 
TaxTMI 
2017 (7) TMI 359
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....e furnished the copies of agreements and invoices, etc., and as per the agreement the assessee is entitled for a consideration of 2% over and above the invoices value clear of all the expenses. The assessee has not furnished any material to show that the sales were done on 'no Profit & Loss' basis. Therefore, the AO estimated the income at the rate of 2% on gross High Sea sales and brought to tax the exchange rate fluctuation of Rs. 1,75,01,599/- as income. Aggrieved by the order of the AO the assessee went on appeal before the CIT(A) and challenged the order of the AO in respect of both reopening and the additions made in the reassessment order. The Ld CIT(A) confirmed the reopening of assessment, estimation of income and deleted the addition of exchange rate fluctuation. Aggrieved by the order of the Ld.CIT(A) the assessee filed appeal before us. 3.0 The assessee raised two issues in its grounds of appeal. The first issue is related to the re-opening of assessment and the second issue is the estimation of income @2% on High Sea sales. 4.0 Ground Nos.1 & 10 are general in nature which do not require specific adjudication. 5.0 Ground Nos.2 to 6 are related to the re-opening of a....
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....no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year24, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure24 on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts24necessary for his assessment, for that assessment year: In this case, the assessee has made the High Sea sales of Rs. 1,03,55,040/- and received the income of Rs. 1,75,01,599/- which has come to the notice of the Income Tax Department from the commercial tax Department and the assessee has not disclosed the above receipts in the income Tax returns. From a query raised from the Bench, the Ld.AR fairly conceded that the information regarding the High Sea sales and the Exchange fluctuation was not disclosed in Income Tax Return in the original Return. Thus there is a failure on the part of the assessee in not disclosing the income. The Ld.CIT(A) also dealt with the issue in detail in his order in Para No.4.1 to 4.1.6 which is extracted here under for the sa....
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....urn was processed u/s.143(1) on 21.08.2004. Then, the assessee filed a revised return of income on 4.3.2005 returning a total income of Rs. 1,15,24,380. Later, scrutiny assessment u/s.143(3) of the Act was completed on 27.02.2006 and the taxable income was determined at Rs. 1,38,74,513/-. Against the assessment order, the assessee preferred an appeal before CIT(Appeals). The CIT (Appeals)-III, vide order in ITA No.58/2006-07 dated 04.06.2007, deleted certain disallowances / additions made in the assessment order and consequently, the taxable income was revised at Rs. 1,33,70,916/- and a refund of Rs. 14,59,060/- was determined, which was fully adjusted against demand of assessment year 2004-05. * Subsequently, from the copies of Commercial Tax Department's assessment order it is seen that the assessee has made High Sea Sales of Rs. 1,03,55,040/- and it appeared that the assessee received an income of Rs. 1,75,01,599/- as Exchange Rate difference. The assessee has not disclosed these receipts in the P&L account as turnover and under 'Other income' respectively. * In view of the above, the assessment was reopened u/s.147-of the Act and a notice u/s.148 was issued on 18.03.2010.....
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.....1.6 Therefore, in view of the above discussions and the judicial pronouncements, the Assessing Officer's action of re-opening the assessments u/s.147 of the Act, is as per the Act and hence confirmed. The assessee fails in its appeals in this regard. 6.1 Since the income has escaped from the assessment because of the failure on the part of the assessee to disclose fully and truly all material facts for the assessment, we do not find any infirmity in the order of the Ld.CIT(A) and uphold the same. Accordingly, Ground Nos.2 to 6 are dismissed. 7.0 Ground Nos.7 & 8 are related to the estimation of income on High Sea Sales: The assessee made High Sea Sales of Rs. 1,03,55,040/- which was not disclosed in the Income Tax returns. The assessee furnished the agreements copies of invoices, etc., and as per the agreement the assessee is entitled for a consideration of 2% over and above the invoice value clear of all the expenses. The assessee has not furnished any material to show that the sales were done on 'no Profit & Loss' basis. Therefore, the AO estimated the income at the rate of 2% on gross sales and the first Appellate Authority has confirmed the addition. 7.1 Aggrieved by the ....
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....details during the assessment proceedings u/s.142(1) of Income Tax Act (in short 'the Act') but the assessee has not furnished the details such as party wise details of export sales, prevailing rate of exchange as on the date of invoice and the date of realization etc., Hence the AO treated the entire Exchange rate fluctuation as income and added back to the Income. On the other hand, Learned Authorized Representative (in short 'Ld.AR') relied on the Ld.CIT(A) order. 11.0 We have considered the submissions made by the both the parties and perused the material placed on record. As per the Assessment Order, the assessee has made High Sea sales of Rs. 150355340/- and it had received the income Rs. 1,75,01,599/- as exchange rate difference. During the assessment proceedings, the AO has called for the details u/s.142(1) but the assessee has failed to furnish the details called for. The assessee has filed the revised return admitting the turnover of Rs. 168,23,12,632/- against the total turnover of Rs. 171,45,06,509/-. The income of Rs. 1,75,01,599/- received as exchange rate difference was not included in the turnover admitted for income tax purposes. The assessee has not furnished th....