USHA KHETAN,MUMBAI vs. THE INCOME TAX OFFICER WARD 33(1)(1), MUMBAI
IN THE INCOME-TAX APPELLATE TRIBUNAL “E” BENCH,
MUMBAI
BEFORESHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER
&
SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER
Usha Khetan,
Gala No. 6, Neha Industrial
Estate, Dutta Pada Road,
Near
Suhasit
IT Park,
Borivali East, Mumbai 400
066, Maharashtra v/s.
बनाम
The Income Tax Officer, Ward
33(1)(1),
Kautilya
Bhawan,
Avenue 3, Near Videsh Bhavan,
Bandra Kurla Complex, Bandra
East,
Mumbai
–
400051,
Maharashtra
स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AEXPK6415Q
Appellant/अपीलार्थी
..
Respondent/प्रतिवादी
Appellant by :
Shri Sumit Mantri
Respondent by :
Shri Hemanshu Joshi (Sr. DR)
Date of Hearing
12.03.2025
Date of Pronouncement
01.04.2025
आदेश / O R D E R
PER PRABHASH SHANKAR [A.M.] :-
The present appeal emanating from the appellate order dated
16.05.2024 is preferred by the assessee against the order passed by the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal
Centre, Delhi [hereinafter referred to as “CIT(A)”] pertaining to assessment order passed u/s. 143(3) of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 29.12.2018 for the Assessment Year [A.Y.] 2016-17. P a g e | 2
A.Y. 2016-17
Usha Khetan, Mumbai
The grounds of appeal are as under:- 1. On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (appeals) NFAC erred in confirming the addition of Rs.7,97,17,209/- Import and Rs.1,79,75,718/- custom duty under section 69C as unexplained expenditure without appreciating the facts that the M/s Priyankshi Fashion Private Limited was the actual importer of goods using the IEC no of appellant.
On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (appeals) NFAC erred in appreciating the Custom duty and clearing and forwarding charges were directly paid by M/s. Priyankshi Fashion Pvt. Ltd.
Facts of the case are that the Assessing Officer noted that as per information in hand, the assessee had imported goods to the tune of Rs. 7,97,17,209/- during the year and custom duty to the tune of Rs. 1,79,75,718/- was paid on such import. However, the financials of the assessee did not reflect any such import. On being asked, firstly, it was stated that she had imported certain items from China, however, since those goods were substandard, the same were not accepted, hence not entered in books of accounts. However, after further enquiry by Assessing Officer, the assessee stated that those goods were imported by her on behalf of one company namely “Priyankshi Fashion Pvt. Ltd”(henceforth ‘PFPL’), and the amount was paid by this company to the bank account of the assessee and same was remitted to the overseas sellers. Custom duty
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A.Y. 2016-17
Usha Khetan, Mumbai was also stated to be paid by the above company. The AO, after discussing the issue in detail, did not accept the submission of the assessee and held the amount of Rs. 7,97,17,209/- as unexplained expenditure u/s 69C of the Act and added to the income.
4. In the subsequent appeal, the assessee submitted that she was mainly engaged in business of trading in textile, handlooms, Power looms and finished fabrics in local. During the year, her local sales were Rs.12,80,055/- and showed the Net profit from the trading of Rs.40,095/-.
During the year, the assessee on behalf of PFPL imported 30 consignments from China using her Import Exports Code(henceforth ‘IEC’). The said imports were made based on the understanding entered with PFPL wherein it was agreed that the imports would be made under assessee’s
IEC code and all payments would be made by them. Thus, the PFPL had made total imports of Rs 797.17 lakh on payment of the custom duty amounting to Rs. 179.76 lakh using the IEC of the assessee. The said concern made the payment for above import and custom duty. It was stated further that all the payments for the same were first to be made by PFPL to her and same in turn, would be paid by her to the supplier. The assessee only facilitated the IEC No. and thus these imports were not related to her and therefore, were not accounted in their books. The imports were of PFPL and Custom duty for the same was also paid by them
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A.Y. 2016-17
Usha Khetan, Mumbai and they cleared the goods from customs. In support, the assessee submitted its bank statement highlighting that the first payment received by the assessee from PFPL, then after that the payment made to supplier.
During the year this party has imported goods worth Rs.7,97,17,209/- and same amount was transferred to the assessee. In this regard, the Assessee furnished details of transactions and once again it is emphasised that PFPL made imports through the IEC No. of assessee and for which payments were made by them to the appellant, and the appellant made payments to the foreign parties. The Ld. Assessing Officer without appreciating the above facts, explanation and documents submitted during the assessment proceeding, passed assessment order under section 143(3) of the Act with prejudiced mind.
4.1 In the subsequent appeal, it was noted by the ld.CIT(A) that the AO on receipt of response of the appellant, asked her to furnish certain clarifications i.e 1. Reason for using your IEC by any other entity, 2. Confirmation letter from PFPL confirming her version, 3. Financials of PFPL to substantiate that the said company had shown the above import and corresponding sale, 4. Copy of ledger account of the party in the books of accounts. However, after much delay, it was submitted that directors of the said party were not responding the calls and mails and made a request to issue a notice directly to them.
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A.Y. 2016-17
Usha Khetan, Mumbai
2 Based on the above facts, the ld.CIT(A) observed that though it was contented that import was made using the IEC number of the assessee, this transaction was not reflected in her accounts. The assessee initially tried to mislead the Assessing Officer by stating that the imported goods were not accepted as those were sub-standard articles; hence not entered in books of accounts. However, when the AO confronted the appellant with more facts with details of datewise imports with as many as 30 occasions of import with different BE numbers, the appellant came forward with a different narrative that the imports were actually made by the company PFPL using the IEC number of the assessee. She however, failed to furnish the necessary evidences in support of her contention, like copies of purchase bills, copy of any such agreement, copies of financials of PFPL depicting above purchases etc. The Assessee has not shown any commission income also, generated from such arrangements. Even the inspector deputed by the AO reported that the address of corporate office of PFPL, did not exist on the address given by the assessee. Only a letter was sent to the Assessing Officer from the registered office of the company confirming the version of the assessee, however, no other evidences confirming that the above purchases shown by the company in its books of accounts were produced. It was noted that though it was stated that the director of the P a g e | 6 A.Y. 2016-17
Usha Khetan, Mumbai company was not responding but from the PAN database, it was seen that the name of father of the assessee was Shri Laxminarayan Khetan.
Further, from the MCA site, it was revealed that name of Directors of the company PFPL, were Shri Krishnakumar Laxminarayan Khetan and Shri Ramta Krishnakumar Khetan. Thus the company was a closely held company by the family members of the assessee. Therefore, her contention that the directors of the company were not responding to her call, was only an effort to mislead the appellate proceedings. It was further observed that when purchases have been made by the appellant, by using her IEC number, payments were remitted from her bank accounts, then it was imperative that those purchases should have been reflected in her financials. Since it was not so, onus lies on her to prove with evidence that the said purchases were reflected in the books of accounts of PFPL. Even, in the books of the assessee, should have reflected the above transactions. However, the assessee failed to furnish the same, not only during the assessment proceedings, but also during the present appellate proceedings. Based on these facts, the action of the AO in treating the above purchase as unexplained expenses under the provisions of sec. 69C was found correct and was sustained by the ld.CIT(A) dismissing the appeal.
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Usha Khetan, Mumbai
Before us, the ld. DR relied on the orders of the authorities below stating further that the assessee is a habitual defaulter and in AY 2015- 16 also identical issue was involved and the matter was remanded to the ld.CIT(A) by the hon’ble ITAT in its order ITA No.2071/Mum/2024 dated 31.07.2024.A copy of the order is also placed on record. The ld.AR has not controverted this fact. 6. We find that there are lot of inconsistencies in the stand taken by the assessee as evident from the contents of the assessment order as also the appellate order. The assessee could not adduce relevant materials in support of her contentions. Since the issue involved is already before the ld.CIT(A) in her own appeal in the AY 2015-16, following the principles of natural justice, we therefore, remand the present appeal also back to the ld.CIT(A) for substantive adjudication of the appeal. The assessee is also directed to cooperate and make proper compliance before him. 7. In the result, the appeal is allowed for statistical purposes. Order pronounced in the open court on 01/04/2025. NARENDER KUMAR CHOUDHRY PRABHASH SHANKAR (न्याययक सदस्य /JUDICIAL MEMBER) (लेखाकार सदस्य/ACCOUNTANT MEMBER)
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A.Y. 2016-17
Usha Khetan, Mumbai
Place: म ुंबई/Mumbai
ददनाुंक /Date 01.04.2025
Lubhna Shaikh / Steno
आदेश की प्रयियलयि अग्रेयिि/Copy of the Order forwarded to :
1. अपीलार्थी / The Appellant
2. प्रत्यर्थी / The Respondent.
3. आयकर आयुक्त / CIT
4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT,
Mumbai
5. गार्ड फाईल / Guard file.
सत्यावपि प्रवि ////
आदेशानुसार/ BY ORDER,
उि/सहायक िंजीकार (Dy./Asstt.