The appeal by Shri Chandrasekhara Thamma Reddy challenges the assessment year 2016-17 decision made by the Income-Tax Officer, Ward-53(2), New Delhi, regarding export transactions.
The main issue in this appeal was the addition of Rs. 2,50,340, which the tax authorities claimed as earnings based on the export of leather products and readymade garments. The initial income declared by the appellant was Rs. 3,36,286.
During the assessment, the officer noted exports amounting to Rs. 25,03,399 and requested details, subsequently assuming 50% of this as the appellant’s income due to inadequate documentation provided.
The appellant contested this decision, leading to a partial acceptance by the Commissioner of Income-Tax (Appeals), who reduced the addition by assuming a 10% profit on the export value. The tribunal, however, removed the addition altogether, acknowledging the appellant’s adherence to a cash accounting system and recognizing that the income for these exports was declared when actually received.
The tribunal’s decision underscores the importance of accounting practices in determining tax obligations and highlights the need for clear documentation and timely receipt of export revenues. This decision could influence future cases where export income timing affects tax liability.
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