TaxTMI 
TaxTMI 
2026 (9) TMI 495
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.... in India. The assessee's return of income was picked up for limited scrutiny and during the assessment proceedings the AO examined the issue of mismatch in import duty and custom duty payment. Ld. AO after examining the issue has concluded that the Import- Export Code (IEC) of the assessee was used to make the imports and the assessee's claim that the same were made without its knowledge was found to be not sustainable. Ld. AO concluded that assessee had made purchases against which import duty has been paid during the relevant year and the same has never been booked in the financials of assessee, hence, the same were considered to be out of books/bogus purchases and a total invoice value of Rs. 84,63,000/- against the import purchases made by the assessee were added back to the income of the assessee under the head business and profession as per Section 69A of the Act and for completeness we reproduce the findings of ld. CIT(A) in para 5.1 to 5.4: "5.1. The Critical Failure to Discharge Onus of Proof ():5.1.1. The crux of the matter lies in the fundamental legal principle of the (burden of proof) in income tax proceedings. When the AO brings forth specific evidence or in....
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....ip between the goods delivered at the ARINC premises and the financial records of the Appellant firm was not reconciled" remains unaddressed by the Appellant's submissions. 5.2.2. The transactions, by their very nature of using the Appellant's IEC, legally attach to the Appellant until conclusive evidence proves otherwise. The legal notice, which attempts to shift the burden onto M/s Blue Dart Express Limited to provide statutory documents, is an administrative action in a commercial dispute, not an income tax defense. The Income Tax Act dictates that the financial entries and consequences arising from the utilization of a firm's legal identity must be explained by the firm itself. The Revenue is not bound to wait for the outcome of potential civil or criminal proceedings between the Appellant and a third-party logistics provider. 5.2.3. The Hon'ble Supreme Court, in SumatiDayal vs. CIT [1995] 214 ITR 801 (SC), emphasized that where the explanation offered by the assessee is implausible or contrary to human probabilities and common sense, the tax authorities are justified in rejecting it, notwithstanding the documents furnished. The present case, i....
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....nt had made payment for imported goods which has not been recorded in its books of account. (e) appellant had a malafide intention of tax avoidance. 4. That on facts and in law the CIT(A) has erred in not appreciating that M/s Trans Global Logistics had conveyed misleading information to the tax department in reply to notices issued u/s 133(6) of the Income Tax Act, 1961. 5. That on facts and in law the CIT(A) has erred in passing the impugned order without objectively considering the written pleadings on record. 6. That on facts and in law the CIT(A) has erred in misrepresenting the findings of assessment order in para 3.2 of the impugned order. That the appellant craves for leave to add, amend, modify or alter the grounds of appeal." 4. We have given considered thought to the submissions which were primarily relying the respective cases as coming up from the assessment order and the order of ld. CIT(A). We find that the ld. CIT(A) has sustained the addition primarily on the basis of failure of assessee to discharge the onus of proof to establish that IEC of assessee was not used by assessee and there was inadequacy of documents in r....
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....er there is a letter dated 05.12.2017 at page No. 54 of the paper book wherein ARINC has further confirmed that Bird Consultancy Services did not make payment of the customs duty for such shipment and the title of such equipment belongs to ARINC and not Bird. 8. Our attention is also drawn to a legal notice issued by assessee dated 11.01.2018 copy of which is available at page No. 56-58 of the paper book wherein assessee has called upon M/s Trans Global Logistics and its partner alleging that the said persons shared incorrect information with ld. Tax authorities and the shipment of goods were on Delivery Duty Paid (DDP) basis with all payments were made by ARINC, USA and that ARINC, USA appointed M/s Polaris Worldwide Logistics, USA as their Freight Forwarding Agent to deliver the goods to M/s Bird Consultancy Services and that M/s Polaris Worldwide Logistics, USA appointed M/s Worldwide Logistics India Pvt. Ltd. to do the services in India and M/s Worldwide Logistics India Pvt. Ltd. in turn appointed them to do the clearance and delivery of the goods to Bird Consultancy Services is wholly false, misconceived and misconstrued because assessee never ordered or purchased such good....