Laxmaiah Gundogoni, Hyderabad V. Income Tax Officer, Ward-15(2), Hyderabad

ITA 1078/Hyd/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6576 (ITAT-HYDERABAD)
• Duration Of Justice: 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 29-06-2018
• Assessment Year: 2013-2014
• Appeal Filed On: 25-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B K VISHNU PRIYA
• Assessee Lawyers: RAVINDRA CHENJI
• Keywords: Application of stay
• Section: 143(3)

Judgement Text

SA NO 129 AND ITA NO 1078 OF 2018 OF LAXMAIAH GU NDOGONI HYDERABAD. PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER S.A. NO.129/HYD/2018 (ARISING OUT OF ITA NO.1078/HYD/2018) AND ITA NO.1078/HYD/2018 (ASSESSMENT YEAR: 2013-14) SHRI LAXMAIAH GUNDOGONI HYDERABAD PAN: AOWPG7009M VS INCOME TAX OFFICER WARD 15(2) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI RAVINDRA CHENJI FOR REVENUE : SMT. B.K. VISHNUPRIYA, DR O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE CIT (A)-7, HYDERABAD DATED 23.04.2018. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL, HOLDING A LICENSE FOR SALE OF LIQUOR IN UPPAL, FILED HIS RETURN OF INCOME FOR THE RELEVANT A.Y ON 27.09.2013 , DECLARING AN INCOME OF RS.15,84,480. DURING THE ASSESSMENT PROCE EDINGS U/S 143(3) OF THE ACT, THE AO OBSERVED THAT THE ASSESSE E HAS DECLARED THE PROFIT RATE OF 2.08% WHICH ACCORDING TO HIM, WA S TOO LOW. IN REPLY TO THE QUERY RAISED BY THE AO, THE ASSESSEE S UBMITTED THAT THE ISSUE OF SALE BILLS IS NOT POSSIBLE IN WINE SHO P AND THAT IT WAS DATE OF HEARING: 29.06.2018 DATE OF PRONOUNCEMENT: 0 3 . 0 7 .2018 SA NO 129 AND ITA NO 1078 OF 2018 OF LAXMAIAH GU NDOGONI HYDERABAD. PAGE 2 OF 3 NOT ABLE TO EARN 5% INCOME GOODS PUT TO SALE AS PRO POSED BY THE AO. IT WAS ALSO SUBMITTED THAT HE HAD TO PAY HUGE L ICENSE FEE TO THE EXCISE DEPARTMENT AND THEREFORE, IT IS NOT POSS IBLE TO EARN PROFIT AT 5% WHICH IS VERY HIGH. HOWEVER, THE AO ES TIMATED THE NET PROFIT AT 5% OF THE COST OF THE GOODS PUT TO SA LE AND BROUGHT IT TO TAX. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A), WHO CONFIRMED THE ORDER OF THE AO AND THE ASSE SSEE IS IN SECOND APPEAL BEFORE US. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAD TO PAY HUGE LICENSE FEE AND IN ORD ER TO WITHSTAND THE HEAVY COMPETITION, IT HAD TO SELL AT LOW PRICES AND HENCE IT WAS NOT POSSIBLE TO EARN INCOME AT THE RATE ESTIMATED B Y THE AO AND THE CIT (A). HE ALSO PLACED RELIANCE UPON THE VARIO US DECISIONS OF THIS BENCH WHEREIN THE HON'BLE TRIBUNAL HAS ESTIMAT ED THE INCOME AT 3% OF THE STOCK PUT TO SALE AND PRAYED FO R SUCH ESTIMATION IN THE CASE OF THE ASSESSEE AS WELL. 4. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT IN THE CASE OF VENKATESWARA WINES IN ITA NO.725/HYD/2015, THE COORDINATE BENCH OF THIS TRIBU NAL HAS HELD THAT THE UNIFORM NET PROFIT CANNOT BE ADOPTED IN EACH AND EVERY CASE OF SIMILAR BUSINESS AND ESTIMATION OF IN COME AT 5% OF THE TURNOVER WAS VERY HIGH AND THE INCOME ESTIMATED BY THE AO AT 2.5% OF SALES WAS CONFIRMED BY THE TRIBUNAL. SIMILA RLY, IN OTHER SA NO 129 AND ITA NO 1078 OF 2018 OF LAXMAIAH GU NDOGONI HYDERABAD. PAGE 3 OF 3 CASES, THE NET PROFIT WAS ESTIMATED AT 3% OF THE CO ST OF THE GOODS SOLD. RESPECTFULLY FOLLOWING THE SAME, WE DIRECT TH E AO TO ESTIMATE THE NET PROFIT OF THE ASSESSEE AT 3% OF THE COST OF THE GOODS PUT TO SALE. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. 7. IN VIEW OF THE DISPOSAL OF THE APPEAL OF THE ASS ESSEE ABOVE, THE STAY APPLICATION BECOMES INFRUCTUOUS AND IS ACCORDINGLY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD JULY, 2018. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 3 RD JULY, 2018. VINODAN/SPS COPY TO: 1 SHRI RAVINDRA CHENJI, ADVOCATE, C-308, 4-1-970 UP AWSANA, AHUJA ESTATE, ABIDS, HYDERABAD 500001 2 INCOME TAX OFFICER, WARD 15(2) IT TOWERS, AC GUAR DS, HYDERABAD 3 CIT (A)-7 HYDERABAD 4 PR. CIT 7 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER