• International trading transaction

An Indian Pvt Ltd company, purchased 4 equipments from a USA Manufacturer (no relation between promoters/directors) and sold all 4 equipment to a UAE based company (no relation between promoters/directors).
Invoice is raised to the UAE company, upon receipt of payment, remittance towards purchase to USA shall also be made.
Total transaction amount approx $300,000 x 4 = $1.2 Million (Rs. 8 CR). Trading income is about 5%. 
What problems do you foresee from IT dept for such transaction?
Asked 8 years ago in Audit

Dear Sir,

I don't foresee any issues from it department as long as it is done as a part of ordinary business activities and you have properly accounted the purchases and sales in the books and paid property taxes on the same.

However if it is purcahse as capital assets and then sold, in that case it department may treat it as capital gain.

Please feel free to revert in case you require any additional clarification on the above.

Thanks and Regards

CA Abhishek Dugar

Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

Apparently no problems foreseen in this transaction. It seems to be a normal business activity involving importing & exporting. In case of further info pl email on: rkk@rkkabra.com.

CA Rajesh Kabra

Rajesh Kabra
CA, Thane
9 Answers
1 Consultation

Hello Sir,

As per the information provided by you it appears that it is purely a trading transaction. So no issue can be foreseen from the IT Department, all you have to do is make sure that you are properly recording your Purchase/ Sales and Foreign exchange gain/ loss in case any query is pushed by the IT Department.

Trust this clarifies your query.

Feel free to get back/ call back for any further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, ACA, LLB - GEN, CERT. FAFP

Rohit R Sharma
CA, Mumbai
2104 Answers
95 Consultations

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