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

ITA 1180/PUN/2023

AI Insights

The case involves Vikram Mohanrao Moholkar, who appealed against the order of the CIT(A)/NFAC which upheld an addition of Rs.15,36,476 as unexplained expenditure under section 69C of the Income Tax Act for the Assessment Year 2018-19. The assessee argued that the expenditure was for importing goods, which were sold during the year, and only the net profit should be taxed. The Departmental Representative supported the lower authorities' decision, emphasizing the lack of explanation for the purchases. The Tribunal found that while the assessee was engaged in regular business activities, the purchases were not declared in the income tax return, leading to an estimation of profit at 10% on the unexplained purchases.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 32563 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJAY DHIVARE
• Assessee Lawyers: RAMESH VIKRAM MOHOLKAR
• Keywords: Unexplained expenditure
• Section: 143(3); 142(1); 143(2); 69C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.1180/PUN/2023 िनधाᭅरण वषᭅ / Assessment Year : 2018-19 Vikram Mohanrao Moholkar, H.No.5-10-5, Station Road, Near Farm Road Nx, Bansilal Nagar, Aurangabad- 431005. PAN : AHIPM9129M Vs. ITO, National E- Assessment Centre, Delhi. Appellant Respondent आदेश / ORDER PER MANISH BORAD, AM: 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. 2. The sole grievance of the assessee revolves around the issue of addition made for unexplained expenditure u/s 69C at Rs.15,36,476/-. Assessee by : Shri Ramesh Vikram Moholkar Revenue by : Shri Sanjay Dhivare Date of hearing : 03.02.2025 Date of pronouncement : 04.02.2025 ITA No.1180/PUN/2023 2 3. At the outset, Ld. Counsel of the assessee submitted that the alleged expenditure is towards import of goods from outside India and that the said purchases though not disclosed in the regular return of income but the alleged imported goods have been sold during the year and therefore prayed that only net profit element should be subjected to tax. 4. 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. 5. 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 ITA No.1180/PUN/2023 3 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 ITA No.1180/PUN/2023 4 in the income tax return, however under the given facts and circumstances of the case and that the assessee being unable to furnish the details of sales made against the said purchases, I estimate the profit @ 10% on the alleged purchases of Rs.15,36,476/- which comes to Rs.1,53,648/- and accordingly sustain the addition at Rs.1,53,648/- as against the addition alleged of Rs.15,36,476/- and give part relief to assessee. Accordingly, grounds of appeal raised by the assessee are partly allowed. 6. In the result, the appeal of the assessee is partly allowed. Order pronounced on this 04th day of February, 2025. Sd/- Sd/- (S. S. VISWANETHRA RAVI) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 04th February, 2025. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “SMC” बᱶच, पुणे / DR, ITAT, “SMC” Bench, Pune. 5. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. "