VIKRAM MOHANRAO MOHOLKAR,AURANGABAD vs. INCOME TAX OFFICER ASSESMENT UNIT NEAC, NATIONAL E ASSESSMENT CENTRE DELHI

This appeal filed at the instance of assessee is directed against the order of Ld. CIT(A)/NFAC dated 16.10.2023 which is arising out of the assessment order u/s 143(3) r.w.s. 144B of the Act for Assessment Year 2018-19 framed on 19.04.2021 by the ITO, National E-Assessment Centre, Delhi.

The sole grievance of the assessee revolves around the issue of addition made for unexplained expenditure u/s 69C at Rs.15,36,476/-.

On the other hand, Ld. Departmental Representative supporting the orders of the lower authorities submitted that the assessee could not explain the purchase and therefore the impugned addition deserves to be sustained.

I have heard rival submissions and perused the record placed before me. The assessee is an individual and declared income of Rs.47,870/- in the e-return for Assessment Year 2018-19 filed on 31.03.2019. The assessee’s case selected for limited scrutiny based on the large value of imports shown in the export import data. Ld. Assessing Officer issued valid notices u/s 143(2) and 142(1) of the Act and asked the assessee to furnish product-wise details/documents of the goods imported by him during the year under consideration along with proof of payments through banking channel. Ld. Assessing Officer further observed that in the ITR the assessee has offered income under presumptive scheme calculating net profit @ 6% on the gross turnover of Rs.20,29,580/- but the imports from United Kingdom during the year are of Rs.30,14,180/-. Ld. Assessing Officer also observed that there were two imports during the year first one vide BE No.9133374 dated 03.04.2017 at Rs.14,77,703/- and second one vide BE No.5285580 dated 20.02.2018 at Rs.15,36,476/-. The payments for these purchases were made on 06.04.2017 and 01.03.2018. Ld. Assessing Officer was satisfied with the genuineness of purchase of Rs.14,77,703/- and also accepted that the assessee is carrying on regular business activity, however, alleged addition is made for unexplained expenditure i.e. purchase u/s 69C of the Act. I note that the assessee is found to be regularly carrying on the activity of import of goods and selling them in the local market. The alleged purchase is part of the total import made form United Kingdom. Since the assessee has turnover of Rs.20,29,580/- and there being no other details maintained about trading account, opening and closing stock, it can be presumed that the assessee has sold the goods during the year under consideration but has not declared them in the income tax return so what remains is only to estimate the net profit on the sales made out of the purchases of Rs.15,36,476/-. Though the assessee has calculated net profit of 6% on the turnover declared