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 10 months ago in Audit from Mumbai, Maharashtra
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
Caabhishekdugar@gmail.com
Abhishek Dugar
CA, Mumbai
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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
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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
1080 Answers
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