Sanyang Exim India Private Limited, New Delhi V. ITO, ward-22(3), New Delhi

ITA 829/DEL/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 3734 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 17-02-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 69

Judgement Text

1 | Page IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “SMC” BENCH: NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA No.829/Del/2020 [Assessment Year : 2015-16] Sanyang Exim India Pvt.Ltd., 2505/5, Guru Chamber Gurudwara Road, Bedan Pura, Karol Bagh, New Delhi-110005. PAN-AANCS4946H vs ITO, Ward-22(3), New Delhi. APPELLANT RESPONDENT Appellant by None Respondent by Shri Om Parkash, Sr.DR Date of Hearing 11.08.2022 Date of Pronouncement 24.08.2022 ORDER PER KUL BHARAT, JM : The present appeal filed by the assessee for the assessment year 2015- 16 is directed against the order of Ld. CIT(A)-XXV, New Delhi dated 29.04.2019. 2. The assessee has raised following ground of appeal:- 1). “That on the facts and circumstances of case the learned A.O was not justified in making a disallowance of Rs 867173/- out of Paid custom duty Rs 7415260.00 2) That the Ld A.O. erred in law as well as on facts in invoking provision of Sec 69 of Income Tax Act and the accounting principal & provision of Custom law. 3) That the order of the Ld A.O. is based on conjectures, surmise and suspicion and without considering the relevant material on records. 4) That on facts and circumstances and legal position of case the various observation made by the Ld AO are denied and are contrary to facts. 2 | Page 5) That the Ld CIT (Appeal) has not considered the facts and documents produced before him. 6) That the assessee reserve the right to add, modify, alter and delete in any of the above mentioned ground of appeal.” 3. At the time of hearing, no one attended the proceedings on behalf of the assessee. It is seen from the records that since 06.07.2021, no one has been attending the hearing. The notices were duly sent to the assessee but no compliance was made on behalf of the assessee. However, it is also seen that vide letter dated 22.03.2022, the assessee sought adjournment and the matter was adjourned to 15.06.2022. However, on that date also, no one attended the hearing on behalf of the assessee. Thereafter, the appeal was adjourned to 11.08.2022. Hence, ample opportunities have been provided to the assessee to represent its case. It was incumbent upon the assessee to pursue its appeal. Therefore, under the circumstances stated herein before, the appeal of the assessee is taken up for hearing and is being dispose off on the basis of material available on record. FACTS OF THE CASE 4. Facts giving rise to the present appeal are that income tax return was filed by the assessee company on 28.10.2015 declaring income of Rs.4,09,660/-. Subsequently, the case was selected for scrutiny through CASS. During the course of assessment proceedings, the Assessing Officer [“AO”] called upon the assessee to explain the discrepancy found in the payment of custom duty as per AIR [“Annual Information Report”]. It was noticed that the assessee had paid custom duty at Rs.74,15,260/-. However, the assessee had disclosed payment of custom duty of Rs.65,48,087/-. In 3 | Page response to the query of the AO, the assessee filed his reply which was not found acceptable by the AO and he proceeded to add a sum of Rs.8,67,173/- as unexplained expenses u/s 69 of the Income Tax Act, 1961 [“the Act”]. Hence, the AO assessed taxable income at Rs.12,76,833/- against the declared income of Rs.4,09,660/-. 5. Aggrieved against this, the assessee preferred appeal before Ld.CIT(A), who after considering the submissions, sustained the addition and dismissed the appeal of the assessee. 6. Aggrieved against the order of Ld.CIT(A), the assessee is in appeal before this Tribunal. 7. Ld. Sr. DR strongly supported the orders of the authorities below and submitted that the explanation offered by the assessee is not in accordance with law. He submitted that there is no infirmity into the orders of the authorities below. 8. I have heard the contention of Ld. Sr. DR and perused the material available on records and gone through the orders of the authorities below. I find that the assessee company is engaged in the business of import and trading of computer parts. During the year under consideration, the assessee had paid total custom duty amounting to Rs.74,15,260/- and a sum of Rs.8,67,173/- was claimed as refundable as per law. It is further stated that a sum of Rs.65,48,087/- was treated as direct expenses in the statement of Profit & Loss A/c during the period ending on 31.03.2015. It is further stated that the assessee company has been following Accepted Accounting Standard and the same method is being consistently followed by the assessee company and 4 | Page duly accepted by the Department. It was further stated that the assessee company disclosed in balance sheet and followed Customs Act Circular No.6/2008-Customs dated 28 th April 2008 and Notification No.102/2007 dated 14.09.2007. It is stated that the assessee company had paid custom duty during the year under consideration amounting to Rs.74,15,260/- and as per custom law, the assessee did not route the amount Rs.8,67,173/-through P&L A/c due to the fact that amount is not nature of expense since same has been claimed as exempt as per the Custom Act. However, the Ld.CIT(A) has given a finding on fact by observing as under:- 5. Findings “I have considered the facts of the case, the basis of the disallowance made by the Assessing Officer and the arguments of Ld. AR during appellate proceeding. The decision is as below- i. The AO made an addition of Rs. 8,67,173/- u/s 69 of the IT Act on account of mismatch in the custom duty paid by the assessee company during the year under consideration as appearing the in the Annual Information Report (i.e. AIR) vis a vis the schedule of payment of custom duty in the P&L Account for the year ended 31/03/2015. During this period the total customs duty paid by the assessee company was Rs. 74,15,260/-. The appellant seems to have adjusted an amount of Rs. 8,67,173/- claimed as refundable from the custom department on account of SAD (Special Additional Duty) and the amount of Rs. 65,48,087/- was paid and treated as a Direct Expenses in the profit and loss account statement of the appellant for the relevant period. The difference on account of out of total custom duty paid Rs. 8,67,173/- was claimed as refundable by the assessee company and shown under the head current assets in the books of accounts. The appellant has submitted before me as- 5 | Page “We would like to share that assessee company claims the refund of SAD (Special Additional Duty) from custom department and do not claim the expenses of this amount. This amount is booked as receivable from Custom Department and shown in Assets Side of Balance Sheet under “Long Term Loans & Advances", please refer Notes 2.8. We are enclosing ledger account of "Receivable from Custom" ledger for the said year." ii. The appellant has not explained the reasons for variations and the SAD receivable classified as current asset has to reflect in the P & L accounts at the stage of receipt of the funds/ set off. In view of the factual discussions as above and as enumerated above, the arguments of the appellant are not tenable. iii. In the result, the appeal is dismissed.” 9. From the above finding, it is clear that the assessee failed to explain the reasons for variation and the SAD [“Special Additional Duty”] classified as current asset to be reflected in the P&L A/c at the stage of receipt of the funds/set off. Even before this Tribunal, no explanation is made by the assessee despite sufficient opportunities were given to the assessee and the assessee chose not to attend the proceedings. Therefore, in view of the above facts and circumstances, I don’t see any reason to interfere in the finding of Ld.CIT(A), the same is hereby affirmed. Thus, grounds raised by the assessee are dismissed. 10. In the result, the appeal of the assessee is dismissed. Order pronounced in the open Court on 24 th August, 2022. Sd/- (KUL BHARAT) JUDICIAL MEMBER 6 | Page * Amit Kumar * Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI