Assessee was aggrieved by additions against export sales, wherein transportation charges and damage claim paid by assessee were disallowed. It was alleged that assessee had undisclosed export sales and accordingly 40% profit on alleged undisclosed export sales was added as the undisclosed additional income of the assessee. Held: CIT(A) accepted figure of import-purchase after taking note that assessee imported the goods against LC (letter of credit) and entire transaction took place through banking channel as well as there were bills of entry and invoices. So, when CIT(A) accepted the purchase of goods on import, CIT(A) erred while recasting to adopt the figure at lower figure. Net profit (NP) percentage shown by the assessee for export of fish dust after recast of export sale account was 21.5% which was reasonable and moreover considering the fact that the action of CIT(A) will result in NP of 46%, which will be high and unreasonable. Therefore, AO was directed to accept the re-casted export sale account of assessee, wherein assessee had shown N.P. of 21.5% and accordingly compute the tax.
IN THE ITAT, KOLKATA BENCH
J. SUDHAKAR REDDY, A.M. & A.T. VARKEY, J.M.
Surajit Dey v. ITO
I.T.A. No. 1847/Kol/2018
14 August, 2020
In favour of Assessee.
Appellant by: Miraj D. Shah, Advocate
Respondent by: Dhrubajyoti Roy, JCIT, DR
A.T. Varkey, J.M.
This is an appeal filed by the assessee against the order of learned Commissioner (Appeals)-13, Kolkata dated 16-7-2018 for assessment year 2015-16. The effective grounds of appeal raised by the assessee are as under :--
'1. For that the learned Commissioner (Appeals) in the facts and circumstances of the case was not justified in modifying and enhancing the returned income and thereby sustaining addition to the tune of Rs. 14,40,340 against export sales of Rs. 31,21,380 to Bangladesah.
2. For that in course of hearing of the case and passing the order the learned Commissioner (Appeals) erred in disallowing bona fide transportation charges and damage claim paid by the appellant of Rs. 2,31,500 and Rs. 1,45,000 respectively and related export for export.
3. For that on the facts and circumstances of the case, learned Commissioner (Appeals) erred in deriving 40% profit on alleged undisclosed export sales of Rs. 31,21,380, which is excessive and unjustified and in reality such net profit in the hands of small businessman never exists.'