ENTERPRISE INTERNATIONAL LTD.,KOLKATA vs. I.T.O., WARD - 12(3), KOLKATA

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ITA 2713/KOL/2025Status: DisposedITAT Kolkata28 April 2026AY 2017-201815 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the assessee had provided evidence of its purchases and that the Assessing Officer had not dislodged this evidence. Therefore, the addition made by the Assessing Officer and confirmed by the CIT(Appeals) was deleted.

What were the facts?

The assessee's import purchase value in the P&L account differed from the invoice value, leading to an addition of Rs. 14,31,337/- as unexplained expenditure. The assessee claimed to have provided reconciliation and evidence, which the Assessing Officer and CIT(Appeals) rejected.

What were the issues?

Whether the difference in import purchase value constituted unexplained expenditure, and if the assessee had provided sufficient reconciliation and evidence.

Which sections of the Income-tax Act were involved?

Section 69C,Section 115BBE,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA

Before: Shri Duvvuru RL Reddy, Vice-(KZ)

. IN THE INCOME TAX APPELLATE TRIBUNAL, ‘SMC’ BENCH, KOLKATA Before Shri Duvvuru RL Reddy, Vice-President (KZ) I.T.A. No. 2713/KOL/2025 Assessment Year: 2017-2018 Enterprise International Ltd.,…………….…Appellant Malayalay, Unit No. 2A(S), 2nd Floor, 3, Woodburn Park, Kolkata-700020 [PAN:AAACE5587F] -Vs.- Income Tax Officer,……………………………..Respondent Ward-12(3), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 Appearances by: Shri Ashish Rustagi, FCA, appeared on behalf of the assessee Shri Susanta Saha, Sr. D.R., appeared on behalf of the Revenue Date of concluding the hearing: March 16, 2026 Date of pronouncing the order: April 28, 2026 O R D E R

The present appeal is directed at the instance of assessee against the order of Id. Additional/Joint Commissioner of Income Tax (Appeals)-1, Vadodara dated 31.10.2025 passed for Assessment Year 2017-2018.

. 2. Brief facts of the case are that the appellant-assessee filed its revised return of income for AY 2017-18 on 13.06.2018 declaring total income of Rs.8,05,300/-. The case was selected for scrutiny through CASS. Accordingly, the Department initiated assessment proceedings under section 143(3) and notices under sections 143(2) and 142(1) were issued and duly served upon the assessee. Verification of the assessee’s export import data revealed that the Invoice value of purchase was shown at Rs.38,16,59,608/-, whereas the purchase (foreign) debited to the profit & loss account as revealed from the assessee’s submission dated 20.11.2019 was found to have been shown at Rs.38,02,28,271/- out of the total purchase debited in P&L A/c to the tune of Rs.43,49,42,815/-. The assessee was asked to reconcile the difference in foreign purchase vide show cause notice dated 08.12.2019. In reply, the assesse instead of offering any reconciliation supported by valid documentary evidence, merely sought the copies of documents relied upon by the department. As such, it is evident that no reconciliation was offered by the assessee. Therefore, the difference of Rs.14,31,337/- between the Invoice value of import purchase to the tune of Rs.38,16,59,608/- and the value of import purchase shown by the assessee in the P&L A/c to the tune of Rs.38,02,28,271/- is nothing but explained expenditure where the assessee failed to offer any satisfactory explanation regarding the source of such expenditure. The ld. Assessing Officer treated the amount of Rs.14,31,337/- as unexplained expenditure under section 69C read with section 115BBE of the Act and added to the total income of the assessee. Thus ld. Assessing Officer determined

. the assessed income of the assessee at Rs.22,36,637/- under section 143(3) of the Income Tax Act.

3.

On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals). The ld. Additional/Joint CIT(Appeals) dismissed the appeal of the assessee saying that despite being provided with sufficient opportunities, the assessee failed to offer any acceptable explanation or reconciliation to the department’s query. In view of this, the difference of Rs.14,31,337/- between the invoice value of import purchases amounting to Rs.38,16,59,608/- and the import purchase value shown by the appellant in the profit & loss account at Rs.38,02,28,271/- has rightly been treated as unexplained expenditure and added back to the total income of the assessee. Therefore, the grounds challenging the addition of Rs.14,31,337/- made on account unexplained expenditure under section 69C read with section 115BBE of the Act remain unsubstantiated and do not warrant any relief.

4.

Being aggrieved with the order of ld. Addl/JCIT(Appeals), the assessee preferred an appeal before the Tribunal. It was the submission of the ld. Counsel for the assessee that in reply to the show-cause notice asking to explain with documentary evidence with reference to difference in foreign purchase of Rs.14,31,337/- being the alleged difference between Rs.38,16,59,608/- and Rs.38,02,28,271/-, details of total purchase (foreign) along with bill of entry number and data, details of value and customs duty payment for each individual consignment imported during the relevant year were furnished during the relevant year. Ld. Counsel

. argued that the total value of all the consignments imported during the relevant year amounting to Rs.38,02,28,271/- matched with the statement of accounts as furnished. The ld. Counsel pleaded to set aside the order of ld. Addl./JCIT(Appeals).

5.

On the other hand, it was the submission of the ld. Departmental Representative that as the assessee failed to offer any acceptable explanation or reconciliation to the department’s query, the difference of Rs.14,31,337/- between the invoice value of import purchases amounting to Rs.38,16,59,608/- and the import purchase value shown by the appellant in the profit & loss account at Rs.38,02,28,271/- has rightly been treated as unexplained expenditure by the ld. Assessing Officer which was rightly confirmed by the ld. CIT(Appeals). Therefore, ld. D.R. pleaded before the Bench to uphold the order of ld. Addl./JCIT(Appeals).

6.

I have heard the rival submissions and perused the material available on record. Perusal of the assessment order clearly shows that in para 3.1 and 3.4, the ld. Assessing Officer has raised the issue that the foreign purchase is only Rs.38,16,59,608/-, whereas as per the export import data, the invoice value of import purchase was found to have been shown at Rs.38,16,59,608/-. The difference of Rs.14,31,337/- has been added back as unexplained expenditure. The ld. Assessing Officer says that the assessee has not given any satisfactory explanation. However, the assessee has categorically shown at pages 175 to 183, which reads as follows:- The expenditure has been given to the ld. Assessing Officer as early as 11.12.2019 and even in response to the show-cause notice issued by the ld. Assessing Officer, the assessee has been categorically asking for evidence of the undisclosed foreign

. purchase of Rs.14,31,337/-, which is alleged in the show-cause notice, the ld. Assessing Officer is completely silent. The reply given by the assessee categorically shows that the purchases are only Rs.38,02,28,271/-. This is tallied with the invoices submitted by the assessee. As the evidences were before the ld. Assessing Officer and as the ld. Assessing Officer has not brought out anything to dislodge the evidences submitted by the assessee and there is no evidence produced by the Revenue to show that the invoice value of the import purchases is Rs.38,16,59,608/-. The addition as made by the ld. Assessing Officer and as confirmed by the ld. CIT(Appeals) stands deleted.

7.

In the result, the appeal of the assessee stands allowed. Order pronounced in the open Court on 28/04/2026.

Sd/- (Duvvuru RL Reddy) Vice-President (KZ) Kolkata, the 28th day of April, 2026

Copies to :(1) Enterprise International Ltd., Malayalay, Unit No. 2A(S), 2nd Floor, 3, Woodburn Park, Kolkata-700020 (2) Income Tax Officer, Ward-12(3), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 (3) Addl./JCIT(A)-1, Vadodara; (4) CIT - , Kolkata; 14

. (5) The Departmental Representative; (6) Guard File TRUE COPY By order

Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha

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