TaxTMI 
TaxTMI 
2022 (10) TMI 1034
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....ods had not been accounted for in the books of account." 3. Facts have been taken from the order of the Ld. CIT(A). 4. These grounds are against addition in gross profit of Rs. 1,38,17,091/- and addition of Rs. 31,07,529/- on account of variation in the valuation made by the customs authorities in the assessable value of goods imported. 5. The brief facts are that the assessee is a proprietor of M/s. Shikhar Enterprises and is wholesaler dealer of PVC films, Sheets, Tape, Leather clothes and shoes. During the financial year 2002-03, the assessee also started two new proprietorship concerns namely M/s. Sterling Impex and M/s. Diamond Overseas. 6. A search and seizure action under section 132 of the Act was carried out at the premises of the assessee on 16.02.2005 and in pursuance to which, notice under section 153A of the Act was issued on 27.10.2005 and served on the assessee. The assessee in compliance to the notice, filed a return of income on 07.12.2005 declaring income of Rs. 63,91,229/-. Thereafter, in pursuance to various notices, the Assessing Officer framed an assessment at an income of Rs. 2,35,19,018/-. 7. It was noted by the A.O. that a large number of loo....
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.... these receipts. According to the AO, this shows that the assessee is making the sales without bringing in the record the name of the purchasing party and it is impossible to verify the genuineness of the rates charged and the goods supplied. The Assessing Officer thereafter has stated that the assessee makes sales against the cash only and it is in exceptional cases only that credit sales are made. 10. The Assessing Officer noted, that the assessee was also asked to furnish the addresses of the person to whom, as revealed from the loose papers seized, huge sales have as also referred to page 7 of Annexure A-1 seized from FD-12, Vishakha Enclave, Pitampura, New Delhi on the basis of which, it has been alleged that the assessee has received part payments in cash and part payments by drafts from the persons whose names have been given in coded abbreviations and the pattern of the above receipts also indicates that the assessee is in the practice of receiving the payments in two modes possibly with an intention to show the sale in the books of account to the extent of drafts received and the remaining amount of cash is not accounted for in the books of account. Apart from above, it....
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....ring competitive prices, which can be only by reducing profit margins. The change in the nature of business-which is from domestically to imported goods as well as the nature of goods dealt is depicted by the following table. Assessment Year Domestic items dealt in Assessment Year 2 001 - 02 Imported Leatherite Fabric Sales in % Decrease Over last yea r Decrease over 2 001 - 0 2 Increase ov er last year Increase ov er 2001 - 0 2 2002 - 0 3 60 % 60 % 1086 69 3 10 , 8 8 , 69 3 2003 - 0 4 72 % 80 % 257 43 , 0 2 , 25 7 2004 - 0 5 38 % 93 % 26 48 , 6 0 , 75 2 2005 - 0 6 95 % 99 % 100 97 , 2 1 , 50 4 (b) The volume of sales has multiplied many times from the sales of Rs. 384.99 lakhs in A.Y. 2001-02. The increase is not by simple percentage but by hundreds of percent. Assessment Year Sales Rs. In Lakhs % of increase Over A. Y. 200 1 - 0 2 Last Year 2002 - 0 3 1353 . 87 252 % 252 % 2003 - 0 4 3359 . 65 773 % 148 % 2004 - 0 5 3585 . 18 831 % 7 % 2005 - 0 6 4367 . 70 1034 % 22 % (c) The growth in the v....
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....esh T. Patodia (79 ITD 40). 18. The Ld. CIT(A) held that the first and foremost issue involved in the instant appeal is in respect of rejection of books of accounts by invoking the provisions contained in section 145 of the Act. The Assessing Officer has rejected the books of accounts by holding that, neither the amount of purchase of goods is fully accounted for in the books of accounts and nor the sales have been fully accounted for and therefore, the book result of the assessee cannot be relied upon. So far as the conclusion regarding non-accounting for purchases is concerned, the same is essentially based on the bills of entries found and impounded during the course of search from the premises at 11, Paschimi Marg, Vasant Vihar, New Delhi. According to the A.O., these bills of entries give details of goods imported by the assessee and duty charged by the custom authorities. The AO found that a number of occasions, value of goods imported by the assessee was enhanced by the custom authorities and same was also accepted by the assessee. The AO found that in the instant year, the assessed value was increased by Rs. 31,07,529/-, the details whereof are tabulated hereunder: S.....
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....bsp; A-185 44 7.8.03 $1,121 867109 951897 84788 A-185 36 5.8.03 $1.21 777801 855633 77832 A-190 133 22.4.03 $.36 633270 651985 18711 A-190 132 22.4.03 $.36 633270 651985 18711 A-190 131 19.4.03 $.36 633270 651985 18711 A-190 130 19.4.03 $.36 633270 651985 18711 A-128 2 4.3.03 $.24 1514263 1581992 67729 A-125 81 24.3.03 $1.1 460751 559408 98657 A-125 76 1.4.03 $1.1 384515 4682.42 83727 A-125 27 17.4.03 Rs. 54.01 per kg 443330 560320 116990 ...... ....... ..... ...... ...... ...... ...... ....... .......... Total 16617 3107529 983612 19. It was to be noted that the assessee had challenged the action of customs authorities regarding variation in the invoice value in three cases where the L....
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....zed in Rule 4(2) of the Customs Valuation Rules and clear and cogent evidence of contemporaneous import, it is mandatory for the Customs to accept the invoice value. In this case, no evidence is brought on record to show that the transaction value is not the true commercial value. The Hon'ble Supreme Court has held in the case of Commissioner of Customs, New Delhi's vs. Prodelin India (P) Ltd., 2006 (202) ELT 13 (SC), that it is settled law that the department is bound to accept the transaction value between the two parties in absence of any evidence that identical or similar goods imported by the importer at higher price. Moreover, vide amended provision of section 17(5) of the Customs Act, 1962, it is mandatory that the customs official have to pass the speaking order within 15 days from the date of clearance the goods in case the importer does not accept the loading of the Value and no such orders were passed by the Assessing Authority for loading the true declared by the appellants." 20. In the case of the assessee, there is no evidence on record to suggest that assessee, has paid any amount over and above the purchase consideration shown in the purchase bil....