TaxTMI 
TaxTMI 
2025 (7) TMI 1838
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.....09.2016 was issued by the ITO, Ward-1, Hissar. Through email dated 23.09.2016, assessee requested for transfer of case to ITO, Ward-51(5), New Delhi. The case was transferred by the Office of ITO, Ward-1, Hissar as per territorial jurisdiction and order under Section 127 of the Pr. CIT, Hissar on 07.11.2017. Notice under Section 142(1) of the Act was issued to assessee. Ms. Priyanka Singhal, CA and Learned Authorized Representative of the assessee attended the proceedings. On completion of assessment proceedings, Ld. AO vide order dated 28.12.2017 made additions of Rs. 2,10,85,592/- and Rs. 2,38,36,834/-. Against order dated 28.12.2017, assessee preferred appeal before the Ld.CIT(A) which was partly allowed vide order dated 04.08.2023. 3. Being aggrieved, appellant/revenue preferred present appeal. 4. Learned Authorized Representative for the Revenue submitted that Ld.CIT(A) has erred in deleting the additions of Rs. 2,38,36,834/- made by Assessing Officer under Section 69C of the Act. Ld. CIT(A) erred in deleting the additions of Rs. 1,81,86,600/- (out of Rs. 2,10,85,942/- made by Ld. AO on account of unaccounted purchases. Ld. CIT(A) erred in ignoring the relevant and circ....
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....proceedings u/s 271(1)(c) are being initiated separately. (Addition of Rs. 2,38,36,834/-)" 7. Discussion, reason and decision by the Ld. CIT(A) are as under: "I have fully considered the grounds of appeal no.4 and no.5, order of the AO and the submission of the appellant. The AO in the course of assessment proceeding has conducted inquiry from the three custom house agent (CHAs) namely Ms. S3 Cargo Mumbai, Ms. ICS Cargo Delhi and Ms. Commercial Clearing agencies Pvt. Ltd. Mumbai and gathered certain documents such as PAN, IEC document, Copies of bill of loadings, commercial invoices, packing list, bill of entries, receipt of cargo charges etc. Further he has also downloaded the documents and details from the ICE gate website regarding the import purchases of the appellant. On the basis of the enquires conducted from the custom house agents (CHAs) and the verification made from the ICE gate website he has reached to the conclusion that the appellant assessee has made a total of 14 imports purchases amounting to Rs. 15,05,38,118/- and has paid custom duty of Rs. 1,00,14,613/- on these Imports during the FY 2014-15. The details of these imports have been given in the as....
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....nt accounts no. 20082320000026 of HDFC Bank maintained in the name of the appellant assessee or any other accounts maintained by the assessee. It is also important to mention that the AO has failed to make any enquiry regarding the sources of payments to the suppliers, payments of custom duty and to the custom house agents for their services. Nowadays almost all the import purchases are made through the mode of Letter of Credit (LC). A LC is an instrument issued by the Bank of Importer to the Bank of Exporter for the payment of imports. As per this arrangement the bank of the importer on the request of the customer (importer) agrees to make payment to a beneficiary(supplier) on receipt of documents from the beneficiary as per the terms stipulated in a letter of credit. This arrangement of payment to the foreign suppliers by the importers in the international transaction has been extensively discussed and acknowledged by the AO in his assessment order. The AO while discussing the import process in India as per the guidelines of the DGFT has stated in the para 7 of the assessment order has stated that to import goods in India, the assessee has to obtain an import/export code no. from....
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....practice where the original Importer of goods sells the goods to another person before the goods pass through the custom clearance. In this case also as the facts and circumstances shows it appears that high sea sale has happened because although the import has been made in the name of the appellant but the payments to the suppliers, to the custom duty and to the custom house agents has not been found made from the bank accounts of the assessee. This clearly shows that the payments have been made by other parties. Therefore it is case of high sea sale where the profit on the sale of the goods before the custom clearance has to be taxed in the hands of the appellant. : The AO has estimated the profit on this undisclosed purchase @12% of the total import made. But the AO has not given any reason as to how he has arrived at the figure of 12% profit on the undisclosed import purchase of the appellant. Whereas the appellant in his submission has given the data of gross profit and net profit for AY 2012-13 to AY 2015-16 to show that the AO estimation of net profit is excessive and unreasonable. As per the data given by the appellant he has earned net profit @ 0.71% in AY 2012-13....