Ravinder Singh, Hyderabad V. Income Tax Officer, Ward-7(2), Hyderabad

ITA 1353/Hyd/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7860 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 16-04-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 26-06-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NILANJAN DEY
• Assessee Lawyers: A KIRAN MANOHAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1353 /HYD/201 8 ASSESSMENT YEAR: 20 1 3 - 1 4 RAVINDER SINGH, HYDERABAD. PAN A UCPS7290Q VS. INCOME - TAX OFFICER, W ARD 7 ( 2 ) , HYDERABAD. ( APPELLANT ) (RESPONDENT) ASSESSEE BY : S HRI A. KIRAN MANOHAR REVENUE BY : S HRI NILANJAN DEY DATE OF HEARING : 16 / 0 4 /201 9 DATE O F PRONOUNCEMENT : 24 / 0 4 / 201 9 O R D E R PER S . RIFAUR RAHMAN , A .M. : T H IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) 3 , HYDERABAD , DATED 17 / 0 4 /201 8 FOR AY 20 1 3 - 1 4 . 2 . BRIEF FACTS OF THE CASE ARE, THE ASSESSEE , AN INDIVIDUAL, ENGAGED IN THE WINE BUSINESS, FILED HI S RETURN OF INCOME FOR THE AY 2013 - 14 ON 29 / 09 /2013 DECLARING INCOME OF RS. 12,25,770/ - SUBSEQUENTLY, THE CASE WAS TAKEN UP FOR SCRUTINY AN D ACCORDINGLY NOTICE U/S 143(2) W AS ISSUED TO THE ASSESSEE. IN RESPONSE, THE ASSESSEE FILED THE INFORMATION AS CALLED FOR. 2.1 THE AO NOTED THAT ASSESSEE DECLARED LIQUOR SALES OF RS. 7,09,55,012/ - AND ARRIVED AT A NET INCOME OF RS. 11,56,458/ - , WHICH GIVES A RATE OF 1.63%, WHICH ACCORDING TO AO IS TOO LOW. THE AO OBSERVED THAT THE ASSESSEE DID NOT MAINTAIN THE STOCK REGISTER (AS COULD BE OBSERVED FROM THE AUDIT REPORT IN FORM 3CD) AND NO SALE BILLS WERE ISSUED, WHICH ARE THE PRIMARY BASIS FOR MAINTAINING THE OTHER 2 ITA NO. 1353 /HYD/1 8 RAVINDER SINGH, HYD. BOOKS. WHE N THE AO ASKED THE ASSESSEE TO PRODUCE BOOKS OF ACCOUNT MAINTAINED, THE ASSESSEE FAILED TO PRODUCE THE SAME. ACCORDINGLY, THE AO ESTIMATED THE NET PROFIT @ 5% ON THE VALUE OF STOCK PUT TO SALE. HE ALSO MADE AN ADDITION OF RS. 31,510/ - AS INCOME F ROM OTHER SOURCES, AS OFFERED BY THE ASSESSEE. 3 . WHEN THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), THE CIT(A) CONFIRMED THE ADDITIONS MADE BY THE AO. 4 . AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWIN G GROUNDS OF APPEAL: 1) THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2) THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN REJECTING THE BOOKS OF ACCOUNT AND IN RESORTING TO ESTIMATION OF INCOME 3) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING ESTIMATION OF INCOME AT 5% WHICH IS TOO HIGH CONSIDERING THE NATURE AND EXTENT OF THE BUSINESS. 4) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING ADDITION OF RS.31,510/ - MADE AFTER RESORTING TO ESTIMATION OF INCOME . 5) ANY OTHE R GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 5 . LD. DR, ON THE OTHER HAND, RELIED ON THE ORDERS OF REVENUE AUTHORITIES. 6 . CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. T HE COORDINATE BENCHES OF THIS TRIBUNAL CONSISTENTLY TAKING A VIEW THAT ESTIMATION OF INCOME AT 3% OF THE COST OF THE GOODS SOLD IS REASONABLE IN THIS LINE OF BUSINESS. IN THE CASE OF SRI VENKATESWARA WINES IN ITA NO. 1206/HYD/2015, DATED 27/11/2015 FOR AY 2011 - 12, THE COORDINATE BENCH HAS HELD AS UNDER: 3 ITA NO. 1353 /HYD/1 8 RAVINDER SINGH, HYD. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNT AND THEREFORE, THE ESTIMATION OF INCOME IS JUSTIFIED. IT IS ONLY THE RATE AT WHICH THE INCOME IS TO BE ESTIMATED IS BEFORE US. A.O. HAS ESTIMATED THE INCOME AT 5% OF THE COST OF GOODS SOLD, WHILE THE ASSESSEE IS SEEKING THE ESTIMATION AT 3% OF THE COST OF GOODS SOLD. WE FIND THAT IN THE CASE OF VENKATESWARA WINES, NIZAMABAD (SUPRA), THE COORDINATE BENCH OF THIS TRIBUNAL HAS TAKEN NOTE OF THE DECISION OF HON'BLE HIGH COURT OF TELANGANA AND ANDHRA PRADESH IN ITA.NO.1198/HYD/2015 SAI VENKATES WARA WINES, SECUNDERABAD THE CASE OF CIT VS. KAMLEKAR SHANKAR LAL (SUPRA) TO HOLD AS UNDER : '6. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE AO HAS CALLED FOR BOOKS OF ACCOUNT OF THE ASSESSEE BUT THE ASSESSEE HAD FAI LED TO PRODUCE THE SAME. THEREFORE, AO HAD ESTIMATED THE INCOME OF THE' ASSESSEE AT 2.5% OF THE TURNOVER. THE CIT WANTS THE SAME TO BE ESTIMATED AT 5% OF THE TOTAL TURNOVER BECAUSE THE TRIBUNAL IN THE CASE OF AN ASSESSEE CARRYING ON THE SAME BUSINESS OF SA LE OF IMFL HAS ESTIMATED THE INCOME AT 5% OF THE TURNOVER. THIS, IN OUR VIEW, IS NOT JUSTIFIED AS HELD BY THE COORDINATE BENCH OF THIS TRIBUNAL. THE UNIFORM NET PROFIT CANNOT BE ADOPTED IN EACH AND EVERY CASE OF SIMILAR BUSINESS. ESTIMATION OF NET PROFIT M UST BE ON THE BASIS OF FACTS INVOLVED IN EACH AND EVERY CASE. THEREFORE, IN OUR VIEW, THERE IS NO ERROR COMMITTED BY THE AU IN ESTIMATING THE PROFIT AT 2.5% OF THE TOTAL TURNOVER. THUS GROUNDS OF APPEAL NO.2 & 3 ARE ALLOWED.' THEREFORE, WE DIRECT THE AO TO ADOPT 3% OF THE COST OF GOODS OF LIQUOR SOLD AS THE INCOME OF THE ASSESSEE. ACCORDINGLY, GROUND NO. 2 & 3 ARE PARTLY ALLOWED. 7. AS REGARDS GROUND NO. 5 RELATING TO ADDITION OF RS. 31,510/ - , THE AO MADE THE SAME BY OBSERVING THAT THE ASSESSEE HAS OFFERED THE SAME AS OTHER INCOME. THE CIT(A) CONFIRMED THE SAME ON THE GROUND THAT THE ASSESSEE DID NOT FURNISH ANY EVIDENCE NOR G A VE ANY FAC TUAL DETAILS TO SUBSTANTIATE THE SAME. AS THERE IS NO SUBMISSION MADE ON THIS GROUND, THEREFO RE, WE DISMISS THIS GROUND. 4 ITA NO. 1353 /HYD/1 8 RAVINDER SINGH, HYD. 9 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . PRONOUNCED IN THE OPEN COURT ON 24 TH APRIL , 201 9 . SD/ - SD/ - ( P. MADHAVI DEVI ) (S . RIFAUR RAHMAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 24 TH APRIL , 201 9 KV C OPY TO: - 1) RAVINDER SINGH, PROP. SRI TULJA BHAVANI WINES, H.NO. 270/A/4, UPPER DOOLPET, HYD ERABAD 500 0 06 2) ITO, WARD 7 ( 2 ) , SIGNATURE TOWERS, KONDAPUR , HYDERABAD. 3) CIT(A) 3 , HYDERABAD. 4) PR. CIT - 3 , HYD. 5 ) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6 ) GUARD FILE