Income Tax Officer, Warangal V. Sri Srinivas Kumar Gandla(HUF), Warangal

ITA 1248/HYD/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4813 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 04-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHVAN, JUDICIAL MEMBER ITA NO. 1248/HYD/2013 ASSESSMENT YEAR : 2010-11 INCOME TAX OFFICER-WARD-2, APPELLANT WARANGAL. VS. SRI SRINIVAS KUMAR GANDLA (HUF) RESPONDENT HYDERABAD APPELLANT BY : MR. GANGADHAR PANDA RESPONDENT BY : NONE DATE OF HEARING : 10/12/2013 DATE OF PRONOUNCEMENT : 10/12/2013 ORDER PER ASHA VIJAYARAGHAVAN, J.M: THIS APPEAL FILED BY THE REVENUE IS DIREC TED AGAINST THE ORDER PASSED BY THE CIT(A) VI, HYDERABAD ON 21/06/2013, FOR ASSESSMENT YEAR 2010-11. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN HUF DERIVING INCOME FROM RETAIL LIQUOR BUSINESS AT WARANGAL. IN THE ABSENCE OF PROPER MAINTENANCE OF BOOKS OF ACCOUNT AND NON-PROD UCTION OF PURCHASE AND SALE INVOICES DURING THE COURSE OF ASS ESSMENT PROCEEDINGS, THE ASSESSING OFFICER ESTIMATED THE IN COME OF THE ASSESSEE AT RS. 46,07,695/- BY TAKING INTO CONSIDER ATION THE RETAILERS MARGIN AS PER THE AS PER THE GOMS NO.184 DATED 7.2. 2005 AND ESTIMATED THE GROSS PROFIT @ 25% OF THE PURCHASE VO LUME AND ARRIVED AT PROFIT OF RS. 87,28,982/- , AGAINST WHICH THE AS SESSING OFFICER HAD 2 ITA NO. 1248/HYD/2013 SRI SRINIVAS KUMAR GANDLA (HUF) ALLOWED CREDIT TO THE EXPENDITURE CLAIMED BY THE AS SESSEE AND ARRIVE AT TAXABLE INCOME OF RS. 46,07,695/-. 4. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). BEF ORE THE CIT(A), THE ASSESSEE OBJECTED TO SUCH ESTIMATION ON BLANKET NOT E, WHEN THE PRODUCTS ARE OFFERING DIFFERENT MARGINS, EVEN AS PE R THE GO ISSUED BY THE APBCL. HE CONTENDED THAT THE ASSESSING OFFICER THE ASSESSING OFFICER ERRED IN NOT FOLLOWING THE DECISION OF JURI SDICTIONAL ITAT ON SIMILAR FACTS. IT WAS SUBMITTED THAT THE RATE FIXED BY THE GOVERNMENT OF AP IS ONLY TO KEEP AN EMBARGO ON THE MAXIMUM SAL E PRICE AND NOT WITH A VIEW TO PROVIDE PROFIT AT THE SAID RATE AND THAT NO MINIMUM PRICE IS FIXED. HE FURTHER SUBMITTED THAT THERE IS COMPETITION IN THE MARKET, AND THAT THE ASSESSEE HAS TO LIFT THE MINIM UM QUANTITY OF LIQUOR AND THAT IN CASE THE MINIMUM QUANTITY IS NOT REACHED, THERE IS A CLAUSE OF PENALTY PRICE PERMITTED BY THE EXCISE DEP ARTMENT. THE ASSESSEE PLACED RELIANCE ON THE ORDERS OF THE JURIS DICTIONAL ITAT IN THE CASES OF M/S KANAKA DURGA WINES IN ITA NO. 591/ HYD/2011 DT. 28/07/2011 AND MANJIT SING BAGGA VAS. ITO IN ITA NO . 371 DT. 30/09/2010, WHEREIN THE FACTS OF THE CASE ARE AKIN TO THAT OF THE ASSESSEE, AND THE TRIBUNAL DIRECTED TO ESTIMATE THE NET PROFIT OF THE ASSESSEE AT 3% OF THE PURCHASES OR STOCK PUT FOR SA LE DURING THE YEAR. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE CIT(A) FOLLOWED THE DECISION OF THE COORDINATE BENCH OF IT AT, HYDERABAD IN THE CASE OF AMARAVATHI WINE SHOP IN ITA NO. 1196/HY D/2011, DATED 08/06/2012 AND DIRECTED THE ASSESSING OFFICER TO ES TIMATE THE NET PROFIT AT 5% ON THE STOCK PUT FOR SALE DURING THE Y EAR. 6. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENU E IS IN APPEAL BEFORE US RAISING THE FOLLOWING SUBSTANTIAL GROUNDS : 2. THE CIT(A) OUGHT TO HAVE UPHELD THE UNDERSTATEME NT OF SALES DETERMINED ACCORDING TO THE ESTIMATING OF GRO SS SALES BY 3 ITA NO. 1248/HYD/2013 SRI SRINIVAS KUMAR GANDLA (HUF) FOLLOWING THE APBCL MEMORANDUM IN THE ABSENCE OF SA LE BILLS ON THE GROSS SALES ADMITTED IN THE RETURN OF INCOME S AND THE SAME COULD NOT BE PRODUCED BY THE ASSESSEE DURING T HE COURSE OF SCRUTINY ASSESSMENT. 3. THE CIT(A) HAS ERRED IN RELYING ON THE DECISION OF HONBLE ITATS ORDER IN THE CASE OF M/S AMARAVATHI WINES WI THOUT MENTIONING ANY OTHER FACTS OUGHT TO HAVE UPHELD THE UNDERSTATEMENT OF SALES INSTEAD OF ESTIMATING THE N ET PROFIT. 7. NONE APPEARED ON BEHALF OF THE RESPONDENT-ASSESS EES AT THE TIME OF HEARING BEFORE US. HOWEVER, WE PROCEEDED TO DISPOSE OF THIS APPEAL AFTER HEARING THE LEARNED DR AND ON MERITS. 8. AFTER HEARING THE LEARNED DR AND PERUSING THE RE CORD, WE FIND THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF THE COORDINATE BENCH IN THE CASE OF AMARAVATHI WINE SHOP (SUPRA) W HEREIN THE COORDINATE BENCH HELD AS FOLLOWS: WE HAVE HEARD THE SUBMISSIONS OF THE LEARNED DR AN D PERUSED THE RECORD AS WELL AS GONE THROUGH THE ORDERS OF TH E AUTHORITIES BELOW. AFTER TAKING INTO CONSIDERATION THE SUBMISS IONS OF THE DR, INTER-ALIA, THAT ESTIMATE OF NET PROFIT ABOVE 5 % OF THE PURCHASES MADE BY THE ASSESSEE IS TO BE ADOPTED, WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE AO TO ESTIMATE NET PROFIT AT 5% OF THE PURCHASES OR STOCK PUT FOR SALE DURING THE YEAR SUBJECT TO THE ASSESSED INCOME NOT LESS THAN R ETURNED INCOME. AS THE ISSUE UNDER CONSIDERATION IS IDENTICAL TO TH AT OF THE CASE DECIDED BY THE COORDINATE BENCH IN THE CASE OF AMAR AVATHI WINE SHOP (SUPRA), WE UPHOLD THE ORDER OF THE CIT(A), WH O HAS FOLLOWED THE SAID DECISION OF THE COORDINATE BENCH AND DIREC TED THE ASSESSING OFFICER TO ESTIMATE THE NET PROFIT AT 5% ON THE STO CK PUT FOR SALE DURING THE YEAR AND DISMISS THE GROUNDS RAISED BY THE REVE NUE IN THIS REGARD. 4 ITA NO. 1248/HYD/2013 SRI SRINIVAS KUMAR GANDLA (HUF) 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH DECEMBER, 2013. (CHANDRA POOJARI ) ACCOUNTANT MEMBER (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER HYDERABAD, DATED 10 TH DECEMBER, 2013. KV COPY TO:- 1) ITO, WARD-2, AAYAKAR BHAVAN, STATION ROAD, HYD ERABAD. 2) SRI SRINIVAS KUMAR GANDLA (HUF), H.NO. 2-5-369, NEAR ADALATH, HANAMKONDA, WARANGAL. 3) THE CIT (A)-VI, HYDERABAD 4) THE CIT-VI, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.