ACIT, DR. SPM CIVIC CENTRE NEW DELHI vs. ALLOY WAREHOUSE & INTERIORS LLP, DELHI

The solitary issue raised by the Revenue is as to whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 48,72,540/- made on account of Page 1 of 6 [A.Y. 2017-18] Alloy Warehouse & Interiors disallowance of custom duty and addition of Rs. 1,68,55,426/- on account of disallowance of overseas purchase and whether the ld. CIT(A) has erred in deleting the above addition of Rs. 2,17,27,966/- in spite of the fact that the assessee has failed to explain the transactions at the time of assessment.

At the very outset, the ld. DR heavily relied upon the order of the Assessing Officer and contended that there is discrepancy in the purchase shown in the ITR and the value of imports shown in the export import data which led to the addition.

On the other hand, the ld. counsel for the assessee submitted that the ld. CIT(A) has duly examined the data from the CBEC Portal and found the difference between CBEC data and the amount recorded in the books of the assessee are duly explained. With regard to claim of import duty, the ld. A.R explained that the same was incurred on behalf of their principal and obtained thereafter as reimbursement.

We have heard the rival submissions and have perused the relevant material on record. We find that the ld. CIT(A) has deleted both the additions by holding as under: "3.3 On the issue of excessive purchase shown by the assessee, they disputed the data based on which the Assessing Officer had come to the conclusion that purchases were inflated in the books of accounts. They claimed that at the time of assessment, in spite of their request, the Assessing Officer did not supply them with the CBEC data as Page 2 of 6 [A.Y. 2017-18] Alloy Warehouse & Interiors reflected in Income Tax Portal. However, at the time of the appeal proceedings, they have claimed to access the portal of the CBEC and from that in such portal the assessed value taken for the imports is reflected for Rs.11,68,14,144/- where as in the books of accounts, the corresponding value was debited for Rs. 11,62,83,757/-. The details as per the CBEC portal and as per books of accounts are noted as follows:*** The Assessee claimed that the difference of Rs.5,30,357/- is on account of notional charges like landing charges at the rate 1% of CIF value, concessional value of Air Freight and nominal insurance value of 1.125% of C & F. Since, these are notional value, these do not form part of purchases and accordingly are not reflected in the books of accounts. A copy of the data fetched from the CBEC portal was enclosed with reply of the assessee dated 24.09.2024. I have considered the Assessment Order and I have also considered the documentary evidences submitted by the assessee and I find that the matter could be explained properly by the assessee. Therefore, I do not hold that the purchases reflected in the books of accounts were falsely enhanced by the assessee. The Assessing Officer is therefore directed to delete the disallowance of Rs. 1,68,55,426/- on account of excess purchase.

On the second issue of claim of Import Duty as expense when such import was made on behalf of other importers for which the Assessing Officer made a disallowance, the CIT(A), after examining the facts, held as under:

We have heard the rival submissions and have perused the material on record. On both the issues, we find no reason to interfere with the well- reasoned findings of the ld. CIT(A). Grounds raised by the Revenue stand dismissed.