IN THE INCOME TAX APPELLATE TRIBUNAL
PANAJI BENCH : PANAJI
[THROUGH VIRTUAL HEARING]
BEFORE SHRI RAMA KANTA PANDA, VICE PRESIDENT
AND
SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER
I.T.A.No.200/PAN./2023
ALONG WITH
Stay Application No.1/PAN./2024
Assessment Year 2016-2017
Mrs. Moureen Camara,
Ionic Apartments,
1
st
Floor, Albamar Road,
Tiswadi, Panaji, Goa.
PIN – 403 001.
PAN AABAS8153Q
vs.
National Faceless Appeal
Centre [“NFAC”], Govt. of
India, Ministry of Finance,
I.T. Department,
Delhi
(Appellant) (Respondent)
I.T.A.No. 215/PAN./2023
ALONG WITH
Stay Application No.3/PAN./2024
Assessment Year 2016-2017
Mr. Melwyn Camara,
Dias Building, Near GPO,
Panaji, Goa - 403 001.
PAN ABMPC9039L
vs.
The Income Tax Officer,
Ward-1(1), Aaykar Bhawan,
Plot No.5, EDC Complex,
Patto Plaza, Panaji, Goa.
(Appellant) (Respondent)
For Assessee : Shri D.E. Robinson
For Revenue : Shri Sridhar Dora, Sr. DR
Date of Hearing : 03.06.2024
Date of Pronouncement : 07.06.2024
ORDER
PER BENCH :
These twin assessees appeals, for assessment year
2016-2017, arise against the National Faceless Appeal Centre
[in short the “NFAC”] Delhi’s as many Din and Order Nos.
ITBA/NFAC/S/250/2023-24/1057640303(1) and 1058226174(1),
2
I.T.A.Nos.200 & 215/PAN./2023
dated 02.11.2023 and 24.11.2023; involving proceedings
u/s.147 r.w.s.144 and 143(3) of the Income Tax Act, 1961 (in
short “the Act”); respectively. They have also filed their stay
applications S.A.No.1 & 3/PAN./2024 seeking to restrain the
department from recovering the consequential outstanding
demand(s) of Rs.30,13,680/- and Rs.13,10,588/-;
respectively.
Heard the assessees as well as the department at
length. Case files perused.
2. It emerges at the outset with the able assistance
coming from both the sides that these twin assessees’ have
raised a common/identical substantive ground challenging
learned lower authorities action making sec.69C addition(s) of
Rs.58,91,080/- in case of Mrs. Moureen Camara after invoking
sec.5A of the Act as per the Portuguese Civil Code, 1939 in
light of the corresponding addition of unaccounted imports
added in her husband Mr. Melwyn Camara’s hands. We
further clarify that although the assessees’ and more
particularly the former taxpayer in ITA.No.200/PAN./2023;
questions validity of sec.148/147 proceedings. She also
challenges “transfer” of the Assessing Officer’s jurisdiction
u/sec.127 r.w.s.129 of the Act. Learned counsel has not
argued these pleadings during the course of hearing on
03.06.2024.
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I.T.A.Nos.200 & 215/PAN./2023
2.1. Faced with this situation, we proceed to deal with
the above identical sole substantive issue raised in both these
appeals that the learned lower authorities have erred in law
and on facts in making sec.69C r.w.s.115BBE unexplained/
unaccounted import expenditure addition(s) of Rs.58,91,080/-
during the course of assessment(s) dated 27.12.2018 in case
of Mr. Melwyn Camara, followed by his consequential latter
assessment dated 20.09.2021 in the hands of Mrs. Moureen
Camara. It is in this factual backdrop that we proceed to
decide this sole issue in the succeeding paragraphs.
3. Both the learned representatives at this stage take
us to the former assessee Mr. Melwyn Camara’s appeal
ITA.No.215/PAN./2023 wherein the learned NFAC has
affirmed the Assessing Officer’s action as under :
“8.1. Ground No.(1) : Unexplained Expenditure under
Sec.69C towards purchases amounting to Rs.89,79,665.
The Assessing Officer observed that there was imported
goods from China to the extent of Rs.89,79,665 and the
said amount was not included in the purchases and the
corresponding custom duty was also not included in the
purchases amounting to Rs.28,02,495. The turnover is not
exceeding the threshold limit of 44AD and the income does
not undergo any change as the said income was
considered by the Assessing for computing the total
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I.T.A.Nos.200 & 215/PAN./2023
income. Hence, even though the assessee claimed that the
payment was not made towards purchases as the goods
were found to be defective and the said goods were to be
returned to the supplier and hence it was not included in
purchases, the fact remains that there is a transaction in
relation to that business which is not a recorded
transaction and it is in relation to raw materials supplied
by a concern in China. The quantum consists of bill of
lading of + custom duty. The said amount of purchases
figuring as payable in the books of supplier from China is
stated to be 123000 $ as at the end of the financial year
2015-16. But the confirmation letter from the supplier
alone cannot be a conclusive evidence to show that the
said amount was not paid to the supplier. The appellant
has to substantiate the fact with copy of letter of credit
and invoice and custom duty charged towards the said
product and the arrangement between the parties to
procure the goods. The appellant has not "produced the
primary documents. Normally bills have to be cleared
against acceptance. The transaction between India banker
and China banker and the correspondence between the
parties as to how the goods were to be returned. Thus, no
documentation is produced for expenditure which is found
not recorded in the books of accounts. Further, customs
duty paid cannot be reimbursed and it is a payment made
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I.T.A.Nos.200 & 215/PAN./2023
for importing the goods. Further no contract could be
concluded without making part payment towards the
product for a consideration of 123000 $. Hence, it is a
concluded transaction which consists of two components,
Principal value of good imported + payment to the
government. Entire transaction is omitted to be recorded in
the books without there being any reason. In view of the
above factual matrix, the Assessing Officer has rightly
treated this transaction to the extent of the value of the
goods as unexplained expenditure and the addition made
towards purchase of Rs.89,79,665 as unexplained
expenditure is upheld. This ground is “Dismissed”.
4. Learned counsel vehemently argued during the
course of hearing that both the lower authorities herein have
erred in law and on facts in making the impugned addition in
assessees’ hands. He invited our attention to the assessees’
detailed paper book running into 69 pages; and more
particularly, the corresponding import related documents from
pages 38 to 48 that these tax payers had not made any actual
payment to the Hong-kong/China based furniture supplier. He
referred to the concerned supplier’s clarification submitted
during the course of hearing that the imported furniture items
herein deserve to be returned as well once they failed to satisfy
the quality bench-works. Learned counsel lastly contended
that the customs duty component herein amounting to
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I.T.A.Nos.200 & 215/PAN./2023
Rs.28,02,495/- paid through banking channel; added in the
course of assessment and deleted in the NFAC’s order, has to
be granted a deduction on netting basis against the foregoing
sole substantive addition as per law.
5. The Revenue has drawn strong support from the
NFAC’s foregoing detailed discussion affirming sec.59C
r.w.s.115BBE addition made in the course of assessment(s)
herein.
6. We have given our thoughtful consideration to the
foregoing rival stands and find no merit in assessees cases. We
make it clear first of all that there is no dispute inter alia on
the clinching facts herein that the assessee had not recorded
the impugned furniture import expenditure in the books of
account. We wish to reiterate here that the furniture supplier
herein is China based and therefore, we fail to comprehend as
to how the assessee could get such huge imports items on
credit without proving any past business relation even if it is
accepted that no actual payment had been made. There is
further no issue that custom duty (supra) stood duly paid on
imports. These assessees’ explanation herein fails to satisfy
the test of human probabilities going by Sumati Dayal vs. CIT
[1995] 214 ITR 801 (SC) and CIT vs. Durga Prasad More [1971]
82 ITR 540 (SC).
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I.T.A.Nos.200 & 215/PAN./2023
7. We thus see no reason to accept the impugned
identical sole substantive ground(s) raised in both these
appeals. We further wish to make it clear that it was the
bounden duty of the assessee only to plead and prove all the
relevant facts including the import agreement conditions so as
to buttress the point that in case of any eventuality of quality
defect on the furniture items ought to be returned to the China
based supplier. No such explanation, much less a satisfactory
one, has come from the assessees’ side all along. We thus
affirm the learned lower authorities action deleting the
impugned addition.
8. The assessees’ alternative prayer that we ought to
grant relief of the foregoing custom duty component against
the impugned addition(s) also carries no substance in light of
the fact that the learned NFAC has already granted sufficient
relief(s) to this effect in lower appellate proceedings. Coupled
with this sec.69C proviso also bars such addition. The
assessees instant alternative prayer is declined in very terms.
Ordered accordingly.
9. These twin assessees’ appeals I.T.A.Nos.200 &
215/PAN./2023 are dismissed in above terms. Their respective
stay applications S.A.Nos.1 & 3/PAN./2024 are stand rejected
in same terms. A copy of this common order be placed in the
respective case files.
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I.T.A.Nos.200 & 215/PAN./2023
Order pronounced in the open Court on 07.06.2024
Sd/- Sd/-
[R.K. PANDA] [SATBEER SINGH GODARA]
ACCOUNTANT MEMBER JUDICIAL MEMBER
Pune, Dated 07
th
June, 2024
VBP/-
Copy to
1. The applicant
2. The respondent
3. The Pr. CIT, Panaji concerned.
4. D.R. ITAT, Panaji Bench, Panaji.
5. Guard File.
//By Order//
//True Copy //
Sr. Private Secretary, ITAT, Pune Benches,
Pune.