आयकर अपीलीय अिधकरण,अहमदाबाद (cid:8)यायपीठ ‘C’ अहमदाबाद।

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE MS. SUCHITRA R. KAMBLE, JUDICIAL MEMBER ]

AND MAKARAND V.MAHADEOKAR, ACCOUNTANT MEMBER ITA No.1647/Ahd/2019 Asstt.Year : 2015-2016 The DCIT, Cir.4(1)(2) Vishal Exports Overseas P.Ltd.

Polytechnic Vs. 301, Sheetal Complex Ahmedabad. Mayur Colony Mithakali, Ahmedabad PAN : AAACV 2354 D (Applicant) (Responent)

Assessee by : Shri Vivek Chavda, AR Revenue by : Shri Rignesh Das, CIT-DR सुनवाई क(cid:9) तारीख/Date of Hearing : 12/08/2025 घोषणा क(cid:9) तारीख /Date of Pronouncement: 14/08/2025 आदेश/O R D E R PER MAKARAND V.MAHADEOKAR, AM:

This appeal by the Revenue is directed against the order of the Commissioner of Income-tax (Appeals)-8, Ahmedabad [hereinafter referred to as “the CIT(A)”] dated 30.08.2019, arising from the assessment order dated 26.12.2017 passed under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) by the Assistant Commissioner of Income-tax, Circle-4(1)(2), Ahmedabad [hereinafter referred to as “the AO”]

for the Assessment Year 2015-16.

2. Facts of the Case

2.1 The brief facts of the case, as emanating from the assessment order, are that the assessee is a public limited company engaged in the business of import, export, trading, and generation of electricity. The assessee filed its return of income for the A.Y. 2015-16 on 30.09.2015 declaring a loss of Rs.23,01,21,415/-. The return was processed u/s 143(1) of the Act.

Subsequently the case was selected for the scrutiny.

2.2 During assessment proceedings, the assessee was asked to furnish details of purchases, job work expenses, and sales. On perusal, the AO found that the assessee was providing only services such as utilisation of its custom licences, and that purchase, sale, and job work were performed either with the same company or between related entities. AO issued a show cause notice on 13.12.2017 stating that high seas purchases, jobwork, and high seas sales were from/to the same party — M/s. Atlantis Products Pvt.

Ltd. — and illustrated amounts:

- Purchase on high seas: Rs. 42,62,400/-

- Job work: Rs. 5,91,576/-

- Sale on high seas: Rs. 59,85,527/-

- Custom duty: Rs. 11,12,955/-

2.3 The Assessing Officer’s prima facie view was such that the transactions were structured so that the assessee’s custom licences were used by third parties, with no real manufacturing or genuine trading activity, and thus the loss claimed was not allowable.

2.4 In reply dated 18.12.2017, the assessee submitted that the purchases, job work, and sales were not entirely with the same parties; different parties were involved at different stages. The assessee also submitted that high seas purchases were from various suppliers, and the goods, after clearance, were processed into finished goods through job work at different locations, and thereafter sold in the domestic market after payment of applicable excise duty and VAT. The Assessee further stated that the transactions were conducted under statutory permissions granted by DGFT, and utilisation of licences was in accordance with law. The assessee contended that it had carried on genuine business activity and incurred a genuine business loss of Rs. 17,45,94,780/- on account of fluctuation in crude prices affecting raw material rates. Supporting documents, annexures, and confirmations from parties were filed.

2.5 After considering the assessee’s submissions, the AO held that:

- Although the Bill of Entry was in the assessee’s name, the goods were never brought to the assessee’s premises. They were handled directly by the purchasing party and sent for job work at the purchase party’s own or designated premises. The assessee had no control or ownership rights over the goods.

- The assessee entered into separate purchase, job work, and sale transactions not out of business necessity, but to comply with DGFT requirements to utilise its custom duty licences. All transactions were guided by third parties.

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