ACIT, CHENNAI V. R.Pannerselvam (individual), CHENNAI

ITA 1484/CHNY/2012

• Counselvise Citation: 148421714 RSA 2012
• Duration Of Justice: 3 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 13-08-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 20-07-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: S SRIDHAR
• Keywords: Business income
• Section: 133A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS. 1484, 1487, 1488 & 1489/MDS/2012 ' (' / ASSESSMENT YEARS : 2003-04, 2005-06, 2006-07 & 200 7-08 & C.O. NOS. 155, 158, 159 & 160/MDS/2012 (IN I.T.A. NOS. 1484, 1487, 1488 & 1489/MDS/2012) ' (' / ASSESSMENT YEARS : 2003-04, 2005-06, 2006-07 & 200 7-08 THE ASSISTANT COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE II, CHENNAI CHENNAI - 600 034. V. SH. R. PANEERSELVAM (INDIVIDUAL), NO.43, SARANGAPANI STREET, T. NAGAR, CHENNAI - 600 017. PAN : AAGPP 5343 K (*+/ APPELLANT) (,-*+/ RESPONDENT & CROSS-OBJECTOR) ./ ITA NOS.1485 & 1486/MDS/2012 ' (' / ASSESSMENT YEARS : 2003-04 & 2005-06 & C.O. NOS. 156 & 157/MDS/2012 (IN ITA NOS.1485 & 1486/MDS/2012) ' (' / ASSESSMENT YEARS : 2003-04 & 2005-06 THE ASSISTANT COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE II, CHENNAI - 600 034. V. SH. R. PANEERSELVAM (HUF), NO.43, SARANGAPANI STREET, T. NAGAR, CHENNAI - 600 017. PAN : AAAHR 0200 H (*+/ APPELLANT) (,-*+/ RESPONDENT & CROSS-OBJECTOR) 2 I.T.A. NOS.1484 TO 1489/MDS/12 C.O. NOS.155 TO 160/MDS/12 I.T.A. NOS.263 & 264/MDS/14 ./ ITA NOS. 263 & 264/MDS/2014 ' (' / ASSESSMENT YEARS : 2004-05 & 2006-07 SH. R. PANEERSELVAM (HUF), NO.43, SARANGAPANI STREET, T. NAGAR, CHENNAI - 600 017. V. THE ASSISTANT COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE II, CHENNAI - 600 034. (*+/ APPELLANT) (,-*+/ RESPONDENT) . / 0 /REVENUE BY : SHRI A.V. SREEKANTH, JCIT '12 / 0 /ASSESSEE BY : SHRI S. SRIDHAR, ADVOCATE 3 / 2$ / DATE OF HEARING : 13.08.2015 4!( / 2$ / DATE OF PRONOUNCEMENT : 04.09.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: BOTH REVENUE AND ASSESSEE IN THE STATUS OF HUF, HAVE FILED APPEALS AGAINST THE RESPECTIVE ORDERS OF THE COMMIS SIONER OF INCOME TAX (APPEALS). THE ASSESSEE IN THE STATUS O F INDIVIDUAL HAS ALSO FILED CROSS-OBJECTIONS. SINCE COMMON ISSUE AR ISES FOR CONSIDERATION IN ALL THESE APPEALS, WE HEARD THE AP PEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2. LETS FIRST TAKE THE APPEALS OF THE REVENUE IN I .T.A. NOS.1484, 1487, 1488 & 1489/MDS/2012. ALL THE FOUR APPEALS ARE ARISING OUT OF THE ASSESSMENT ORDERS PASSED IN THE CASE OF THE ASSESSEE IN THE STATUS OF INDIVIDUAL. 3 I.T.A. NOS.1484 TO 1489/MDS/12 C.O. NOS.155 TO 160/MDS/12 I.T.A. NOS.263 & 264/MDS/14 3. SHRI A.V. SREEKANTH, THE LD. DEPARTMENTAL REPRES ENTATIVE, SUBMITTED THAT THERE WAS A SURVEY UNDER SECTION 133 A OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') CONDUCTED ON 27.02.2008 IN THE BUSINESS PREMISES OF THE ASSESSEE. DURING THE COURSE OF SURVEY OPERATION, INCRIMINATING MATERIALS WERE FOUN D IN RELATION TO SUPPRESSION OF SALE OF LIQUOR AT ROHINI INTERNATION AL BAR, T. NAGAR, CHENNAI. ACCORDING TO THE LD. D.R., IN THE PERMIT ROOM OF ROHINI INTERNATIONAL BAR, THE PRICE OF LIQUOR ENTERED IN D AILY STOCK SHEET WAS SUBSTANTIALLY LESS THAN THE PRICE MENTIONED IN THE MENU CARD. THE ASSESSEE KEPT THE CURRENT BOOKS IN THE BAR. ON EXA MINATION OF ONE SHRI RAJU, IN-CHARGE OF ROHINI INTERNATIONAL BAR, I T WAS FOUND THAT SUPPRESSION OF SALE WAS DONE FROM 5 TO 6 YEARS EARL IER. THE SAID SHRI RAJU FURTHER CONFIRMED THAT THE BAR BILL BOOKS WOULD BE DESTROYED AND SEPARATE SET OF SALE BILLS WOULD BE P REPARED UNDERLYING THE SALE PRICE. THE INVESTIGATION DEPAR TMENT WORKED OUT THE AVERAGE SALE SUPPRESSION AT 56.33%. 4. THE LD. D.R. FURTHER SUBMITTED THAT THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE COLLECTION FR OM ROHINI INTERNATIONAL BAR WAS CALCULATED ON THE BASIS OF TH E PRICE MENTIONED IN THE MENU CARD. ACCORDING TO THE LD. D.R., THE A SSESSEE FURTHER 4 I.T.A. NOS.1484 TO 1489/MDS/12 C.O. NOS.155 TO 160/MDS/12 I.T.A. NOS.263 & 264/MDS/14 EXPLAINED THAT THE LIQUOR IS NOT SOLD AT THE PRICES MENTIONED IN THE TARIFF CARD OR MENU CARD. IN FACT DISCOUNT WAS GIV EN AT 50% TO 10%. THEREFORE, INDIRECTLY, ACCORDING TO THE LD. D.R., T HE ASSESSEE ACCEPTED THAT THERE WAS SUPPRESSION OF SALE. ACCOR DINGLY, THE ASSESSING OFFICER ESTIMATED THE SUPPRESSION OF SALE IN ROHINI INTERNATIONAL BAR AT 56.33%. HOWEVER, ON APPEAL BY THE ASSESSEE, THE CIT(APPEALS), IGNORING THE MATERIAL FOUND ON RE CORD, RESTRICTED THE ADDITION TO 30% AS AGAINST 56.33% ESTIMATED BY THE ASSESSING OFFICER. ACCORDING TO THE LD. D.R., WHEN THE SUPPR ESSION WAS ESTABLISHED, THERE WAS NO REASON TO RESTRICT THE SA ME TO 30%. 5. ON THE CONTRARY, SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE ONLY DISPUTE BETWEEN T HE ASSESSEE AND DEPARTMENT IS THAT THE LIQUOR WAS SOLD AT A LES SER PRICE THAN IT WAS MENTIONED IN THE MENU CAR OR TARIFF CARD. ACCO RDING TO THE LD. COUNSEL, LIQUOR BUSINESS IS A COMPETITIVE ONE. THE ASSESSEE HAS TO GIVE VARIOUS DISCOUNTS TO ATTRACT THE CUSTOMERS. T HEREFORE, EVEN THOUGH THE SALE PRICE WAS MENTIONED IN THE TARIFF C ARD AND MENU CARD, THE ASSESSEE WAS FORCED TO GIVE DISCOUNT AT 5 0% TO 10%. THE LD.COUNSEL EXPLAINED THAT THE ASSESSEE IN FACT WAS GIVING DISCOUNT TO CORPORATE GUESTS, WALK IN CUSTOMERS AND HAPPY HO URS DISCOUNT, 5 I.T.A. NOS.1484 TO 1489/MDS/12 C.O. NOS.155 TO 160/MDS/12 I.T.A. NOS.263 & 264/MDS/14 ETC. THEREFORE, ESTIMATING THE SALE ON THE BASIS O F THE PRICE MENTIONED IN THE TARIFF CARD AND MENU CARD IS NOT J USTIFIED. THE LD.COUNSEL SUBMITTED THAT IN FACT THERE WAS NO SUPP RESSION OF SALES. THEREFORE, THE CIT(APPEALS) OUGHT TO HAVE DELETED T HE ENTIRE ADDITION MADE BY THE ASSESSING OFFICER. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. ADMITTEDL Y, THERE WAS A SURVEY IN THE BUSINESS PREMISES OF THE ASSESSEE AND THE REVENUE AUTHORITIES FOUND CERTAIN INCRIMINATING MATERIALS. IT IS AN ADMITTED FACT THAT THE SALE PRICE ENTERED IN THE DAILY STOCK REGISTER IS LESS THAN THE SALE PRICE MENTIONED IN THE MENU CARD. THE DEP ARTMENT CONTENDS THAT THE PRICE MENTIONED IN THE SALE REGIS TER SHOULD BE THE SALE PRICE OF THE LIQUOR. NORMALLY, THE SALE PRICE MENTIONED IN THE MENU CARD WOULD BE THE SALE PRICE OF THE LIQUOR. H OWEVER, THE FACT IS THAT THE LIQUOR SHOPS ARE GIVING DISCOUNT ON THE LIQUOR SOLD TO THEIR CORPORATE GUESTS, WALK IN CUSTOMERS, ETC. FOR VARIO US REASONS. ONE OF THE REASONS PRESUMABLY MAY BE TO ATTRACT MANY CU STOMERS. WHATEVER MAY BE THE REASON, THE MENU CARD SHOULD AL SO REFLECT THE SALE PRICE, HAPPY HOURS DISCOUNT AND DISCOUNT THAT MAY BE GIVEN TO CORPORATE GUESTS, WALK IN CUSTOMERS, ETC. THE MENU CARD OR TARIFF 6 I.T.A. NOS.1484 TO 1489/MDS/12 C.O. NOS.155 TO 160/MDS/12 I.T.A. NOS.263 & 264/MDS/14 CARD SAID TO BE FOUND DURING THE COURSE OF SURVEY O PERATION DOES NOT MENTION OR DISCLOSE ANY OF THE DISCOUNTS SAID T O BE GIVEN BY THE ASSESSEE DURING HAPPY HOURS TO CORPORATE GUESTS, WA LK IN CUSTOMERS, ETC. HOWEVER, WE CANNOT TOTALLY RULE OU T THE CLAIM OF THE ASSESSEE THAT CERTAIN DISCOUNTS ARE GIVEN TO THE CO RPORATE GUESTS, WALK IN CUSTOMERS AND HAPPY HOURS DISCOUNT. THEREF ORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSE SSEE MIGHT HAVE GIVEN SOME DISCOUNT. IN THE ABSENCE OF ANY MATERIA L LIKE REFERENCE IN TARIFF CARD OR MENU CARD, IT CANNOT BE RULED OUT THAT THE ASSESSEE INFLATED THE DISCOUNT SAID TO BE GIVEN TO CORPORATE GUESTS, WALK IN CUSTOMERS AND HAPPY HOURS DISCOUNT, ETC. IN FACT, SHRI RAJU, WHO IS IN-CHARGE OF ROHINI INTERNATIONAL BAR, ADMITTED BEF ORE THE AUTHORITIES THAT THE SALE SUPPRESSION WAS DONE FROM 5 TO 6 YEAR S EARLIER. HE HAS FURTHER ADMITTED THAT BILL BOOKS ARE DESTROYED AND SEPARATE SET OF SALE BILLS ARE PREPARED UNDERLYING THE SALE PRIC E. IN VIEW OF THIS CATEGORICAL STATEMENT, THIS TRIBUNAL IS OF THE CONS IDERED OPINION THAT THE SUPPRESSION OF SALE ON LIQUOR IS CONFIRMED AND NOW WHAT REMAINS IS THE ESTIMATION OF QUANTUM OF SUPPRESSION OF SALE. THE ASSESSING OFFICER TOTALLY REJECTING THE CLAIM OF TH E ASSESSEE REGARDING DISCOUNT, ESTIMATED THE SUPPRESSION AT 56 .33%. THE CIT(APPEALS), HOWEVER, ESTIMATED THE SAME AT 30%. THIS TRIBUNAL 7 I.T.A. NOS.1484 TO 1489/MDS/12 C.O. NOS.155 TO 160/MDS/12 I.T.A. NOS.263 & 264/MDS/14 IS OF THE CONSIDERED OPINION THAT BY TAKING INTO CO NSIDERATION THE NATURE OF TRADE AND MATERIAL FOUND DURING THE COURS E OF SURVEY OPERATION AND THE STATEMENT RECORDED FROM THE PERSO N IN-CHARGE OF BAR, ESTIMATION OF SALE SUPPRESSION AT 26% WOULD ME ET ENDS OF JUSTICE. IN OTHER WORDS, THE SALE SUPPRESSION OF L IQUOR SHOULD BE ESTIMATED AT 26% INSTEAD OF 56.33% ESTIMATED BY THE ASSESSING OFFICER. ACCORDINGLY, THE ORDERS OF THE LOWER AUTH ORITIES ARE MODIFIED AND THE ASSESSING OFFICER IS DIRECTED TO ESTIMATE T HE SALE SUPPRESSION ON SALE OF LIQUOR AT ROHINI INTERNATION AL BAR AT 26% INSTEAD OF 56.33%. 7. NOW COMING TO THE APPEALS OF THE ASSESSEE RELATI NG TO HUF STATUS, FOR THE ASSESSMENT YEARS 2004-05 AND 2006-0 7, SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THERE WAS A SURVEY UNDER SECTION 133A OF THE ACT ON 27.02.2008. ON THE BASIS OF THE SURVEY REPORT, THE ASSESSING OFFICER FOUND C ERTAIN DISCREPANCIES IN THE BOOKS OF ACCOUNT. ACCORDING T O THE LD. COUNSEL, THE ASSESSEE-HUF IS RUNNING A LODGING BUSI NESS AT NO.13, RAJABATHAR STREET, T. NAGAR, CHENNAI-17. THE ASSES SEE IS ALSO HAVING A BAR IN THE LODGE. ACCORDING TO THE LD. CO UNSEL, THE PREMISES WAS OWNED BY SHRI R. PANNEERSELVAM IN HIS INDIVIDUAL 8 I.T.A. NOS.1484 TO 1489/MDS/12 C.O. NOS.155 TO 160/MDS/12 I.T.A. NOS.263 & 264/MDS/14 CAPACITY. HOWEVER, THE LODGING BUSINESS WAS RUN BY HUF HEADED BY THE ABOVE SAID SHRI PANNEERSELVAM. THE REVENUE A UTHORITIES, DURING THE COURSE OF SURVEY OPERATION, FOUND LODGE RECEIPTS. THE ASSESSING OFFICER ESTIMATED THE SUPPRESSION OF LODG E RECEIPT AT 208.84%. HOWEVER, ON APPEAL BY THE ASSESSEE, THE C IT(APPEALS) RESTRICTED THE SAME TO 50% OF WHAT WAS ESTIMATED BY THE ASSESSING OFFICER. ACCORDING TO THE LD. COUNSEL, THE OCCUPAN CY OF THE LODGE CANNOT BE ESTIMATED TO 100% AT EVERY TIME. THE LD. COUNSEL FURTHER SUBMITTED THAT THE MATERIAL FOUND BY THE ASSESSING OFFICER WAS ONLY FOR THE PERIOD JANUARY AND FEBRUARY, 2007. THEREFO RE, THE SUPPRESSION CANNOT BE INTERPOLATED FOR OTHER PERIOD S. ACCORDING TO THE LD. COUNSEL, ROHINI LODGE IS SITUATED IN THE HE ART OF THE CITY, THEREFORE, NORMALLY THE OCCUPANCY RATE IS HIGH. HO WEVER, IT CANNOT BE ESTIMATED TO 100% AT EVERY TIME. THEREFORE, ACC ORDING TO THE LD. COUNSEL, THE CIT(APPEALS) OUGHT TO HAVE DELETED THE ENTIRE ADDITION MADE BY THE ASSESSING OFFICER INSTEAD OF RESTRICTIN G THE SAME TO 50% OF THE ESTIMATION MADE BY THE ASSESSING OFFICER . 8. ON THE CONTRARY, SHRI A.V. SREEKANTH, THE LD. D. R. SUBMITTED THAT DURING THE COURSE OF SURVEY OPERATION, THE REV ENUE AUTHORITIES FOUND INCRIMINATING MATERIALS WHICH DISCLOSE SUPPRE SSION OF LODGE 9 I.T.A. NOS.1484 TO 1489/MDS/12 C.O. NOS.155 TO 160/MDS/12 I.T.A. NOS.263 & 264/MDS/14 RECEIPT. ON EXAMINATION, THE RECEPTIONIST SHRI R. KRISHNAMURTHY, WHO IS IN-CHARGE OF THE LODGE, ADMITTED THAT AS PER COLLECTION BILLS, THE TOTAL COMES TO ` 7,27,979/-. HOWEVER, AS PER THE COLLECTION SHEET, WHICH WAS FOUND AND IMPOUNDED BY THE SURVEY TEAM, THE RECEIPT WAS ` 2,35,714/- ONLY. THE ASSESSEE COULD NOT GIVE ANY EXPLANATION FOR THE DIFFERENCE FOUND BETWEEN THE BI LL BOOK AND COLLECTION SHEET. THEREFORE, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS SUPPRESSED THE ACTUAL RECEIPT OF ROOM RENT FROM ROHINI LODGE. THE ACTUAL SUPPRESSION FOUND FOR THE MONTH OF JANUARY AND FEBRUARY, 2007 WAS INTERPOLATED FOR OTH ER PERIOD AND THE ASSESSING OFFICER HAS TAKEN THE TOTAL SUPPRESSI ON AT 208.84%. AFTER TAKING INTO CONSIDERATION THE ROOM RENT AND O THER RECEIPT OF ` 19,63,486/- FOR THE ASSESSMENT YEAR 2005-06, THE AS SESSING OFFICER DETERMINED THE QUANTUM OF SUPPRESSION AT ` 37,95,311/-. HOWEVER, THE CIT(APPEALS) RESTRICTED THE ESTIMATION MADE BY THE ASSESSING OFFICER TO 50%. THEREFORE, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) WAS VERY REASONABLE. ON A QUERY FROM THE BENCH, THE LD. D.R. CLARIFIED THAT NO APPEAL WAS FILED BY THE REVENUE FOR THESE TWO YEARS. 10 I.T.A. NOS.1484 TO 1489/MDS/12 C.O. NOS.155 TO 160/MDS/12 I.T.A. NOS.263 & 264/MDS/14 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. ADMITTEDL Y, THE REVENUE AUTHORITIES FOUND THAT THE BILLS ISSUED TO THE CUST OMERS SHOW HIGHER AMOUNT OF RECEIPT. HOWEVER, THE COLLECTION DETAILS MENTIONED IN THE SHEET SHOW A LESSER AMOUNT. FOR THE MONTH OF JANUA RY AND FEBRUARY 2007, THE ACTUAL RECEIPT WAS ` 7,27,979/-, AS PER THE BILL ISSUED TO THE CUSTOMERS. HOWEVER, THE SHEET FOUND IN THE PREMISES OF THE ASSESSEE SHOWS AS IF THE AMOUNT RECEIVED WAS ` 2,35,714/- ONLY. THEREFORE, THE ASSESSEE HAS ACTUALLY SUPPRES SED THE RECEIPT. THE MAIN CONTENTION OF THE ASSESSEE NOW BEFORE THIS TRIBUNAL IS THAT EVEN THOUGH THE LODGE IS SITUATED IN A PRIME L OCALITY OF THE CITY, 100% OCCUPANCY CANNOT BE EXPECTED AT EVERY POINT OF TIME. MOREOVER, THE SEIZED MATERIAL IS ONLY FOR THE MONTH OF JANUARY AND FEBRUARY 2007. THEREFORE, THE SUPPRESSION CANNOT B E INTERPOLATED FOR ALL THE EARLIER PERIOD. THIS TRIBUNAL IS OF TH E CONSIDERED OPINION THAT AS RIGHTLY SUBMITTED BY THE LD.COUNSEL, 100% O CCUPANCY CANNOT BE EXPECTED AT EVERY POINT OF TIME. AT THE VERY SA ME TIME, WE CAN EXPECT A REASONABLE RATE OF OCCUPANCY SINCE THE LOD GE IS LOCATED AT PRIME LOCALITY IN THE HEART OF THE CITY. THE FACT THAT THE ASSESSEE HAS SUPPRESSED THE SALE IS ESTABLISHED ON THE BASIS OF THE MATERIAL FOUND DURING THE COURSE OF SURVEY OPERATION. IN FA CT, THE ACTUAL 11 I.T.A. NOS.1484 TO 1489/MDS/12 C.O. NOS.155 TO 160/MDS/12 I.T.A. NOS.263 & 264/MDS/14 RECEIPT WAS ` 7,27,979/-. HOWEVER, THE ASSESSEE HAS DISCLOSED IN THE SHEET, WHICH WAS IMPOUNDED, AT ` 2,35,714/-. THE CIT(APPEALS), AFTER TAKING INTO CONSIDERATION THE NATURE OF BUSIN ESS, HAS RESTRICTED THE SUPPRESSION OF RECEIPT FROM LODGE AT 50% OF WHA T WAS ESTIMATED BY THE ASSESSING OFFICER. IN FACT, THE SUPPRESSIO N WAS MADE DURING THE ENTIRE PERIOD OF BUSINESS. THEREFORE, THIS TRI BUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(APPEALS) AND ACCORDINGLY THE SAME IS CONFIRMED. 10. THE NEXT GROUND OF APPEAL IS WITH REGARD TO EST IMATION OF SUPPRESSION OF SALE FROM ROHINI LODGE PERMIT ROOM. THE ASSESSING OFFICER, ON THE BASIS OF THE MATERIAL FOU ND, ESTIMATED THE SUPPRESSION OF SALE AT 47%. HOWEVER, THE CIT(APPEA LS) RESTRICTED THE SAME TO 30%. WHILE CONSIDERING AN IDENTICAL IS SUE IN THE EARLIER PART OF THIS ORDER, THIS TRIBUNAL, AFTER CONSIDERIN G THE PRICE DISCOUNT THAT WOULD BE GIVEN TO THE CUSTOMERS IN HAPPY HOURS , CORPORATE GUESTS AND WALK IN CUSTOMERS, ESTIMATED THE PROFIT AT 26%. FOR THE VERY SAME REASON, THIS TRIBUNAL IS OF THE CONSIDERE D OPINION THAT ESTIMATION OF PROFIT AT 26% WOULD MEET ENDS OF JUST ICE. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE MODIFIED AN D THE ASSESSING 12 I.T.A. NOS.1484 TO 1489/MDS/12 C.O. NOS.155 TO 160/MDS/12 I.T.A. NOS.263 & 264/MDS/14 OFFICER IS DIRECTED TO ESTIMATE 26% ON SUPPRESSION OF LIQUOR SALES INSTEAD OF 47%. 11. THE ASSESSEE HAS TAKEN ONE MORE GROUND WITH REG ARD TO ADDITION OF ` 1 LAKH AS INCOME FROM RESTAURANT. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE ASS ESSING OFFICER MADE AN ADDITION OF ` 1 LAKH TOWARDS INCOME FROM RANGEETHA RESTAURANT WHICH IS IN FACT FUNCTIONING FROM THE PR EMISES OF ROHINI LODGE. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THE RESTAURANT WAS CLOSE D AND THERE WAS NO INCOME. THIS WAS DISBELIEVED BY THE ASSESSING O FFICER AND THE ASSESSING OFFICER ESTIMATED THE INCOME AT ` 1 LAKH. 12. ON THE CONTRARY, SHRI A.V. SREEKANTH, THE LD. D EPARTMENTAL REPRESENTATIVE, SUBMITTED THAT DURING THE COURSE OF SURVEY OPERATION, THE REVENUE AUTHORITIES FOUND SALES DETA ILS OF THE RESTAURANT FOR THE PERIOD APRIL, 2007 TO JANUARY, 2 008, WHICH DISCLOSES THE TOTAL SALES AT ` 9,40,300/-. THE ASSESSING OFFICER ESTIMATED THE INCOME AT ` 1 LAKH. THEREFORE, THE CIT(APPEALS), ACCORDING TO THE LD. D.R., HAS RIGHTLY CONFIRMED TH E ADDITION MADE BY THE ASSESSING OFFICER. 13 I.T.A. NOS.1484 TO 1489/MDS/12 C.O. NOS.155 TO 160/MDS/12 I.T.A. NOS.263 & 264/MDS/14 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE ASSES SEE APPEARS TO HAVE CLAIMED BEFORE THE ASSESSING OFFICER THAT THE RESTAURANT WAS CLOSED THREE YEARS BACK. BUT, THE REVENUE AUTHORIT IES FOUND THE DETAILS OF SALE FOR THE PERIOD APRIL, 2007 TO JANUA RY, 2008 AND THE SAME DISCLOSE THE SALES AT ` 9,40,300/-. THEREFORE, THE CLAIM OF THE ASSESSEE THAT THE RESTAURANT WAS CLOSED THREE YEARS BACK IS TOTALLY CONTRARY TO WHAT WAS FOUND DURING THE COURSE OF SUR VEY OPERATION. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE CIT(APPEALS) HAS RIGHTLY CONFIRMED THE ADDITION OF ` 1 LAKH MADE BY THE ASSESSING OFFICER. 14. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. 15. NOW LETS TAKE UP REVENUES APPEALS FOR ASSESSM ENT YEARS 2003-04 AND 2005-06. 16. SHRI A.V. SREEKANTH, THE LD. DEPARTMENTAL REPRE SENTATIVE, SUBMITTED THAT THE ASSESSEE WAS ASSESSED IN HIS HUF STATUS. DURING THE COURSE OF SURVEY OPERATION, THE REVENUE AUTHORITIES FOUND SUPPRESSION OF LODGE RECEIPT FOR THE MONTHS OF JANU ARY AND 14 I.T.A. NOS.1484 TO 1489/MDS/12 C.O. NOS.155 TO 160/MDS/12 I.T.A. NOS.263 & 264/MDS/14 FEBRUARY, 2007. AS IN THE CASE OF ASSESSMENT YEARS 2004-05 AND 2006-07, THE ASSESSING OFFICER ESTIMATED THE QUANTU M OF SUPPRESSION OF SALE AT 208.84%. HOWEVER, THE CIT(A PPEALS) RESTRICTED THE SAME TO 50% OF THE ESTIMATION MADE B Y THE ASSESSING OFFICER. 17. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSE E, CONTENDED THAT NO MATERIAL WAS FOUND DURING THE ASSESSMENT YE ARS UNDER CONSIDERATION. THE SURVEY MATERIAL ONLY RELATES TO TWO MONTHS, I.E. JANUARY AND FEBRUARY, 2007. THEREFORE, THE SAME CA NNOT BE USED FOR ESTIMATION OF RECEIPT FOR THE YEARS UNDER CONSI DERATION. 18. HAVING HEARD THE LD. D.R. AND THE LD.COUNSEL FO R THE ASSESSEE, THIS TRIBUNAL, WHILE CONSIDERING AN IDENT ICAL ISSUE FOR THE ASSESSMENT YEARS 2004-05 AND 2006-07, AFTER TAKING INTO CONSIDERATION THE LOCALITY OF ROHINI LODGE IN THE C ITY OF CHENNAI AND EXPECTED OCCUPANCY, FOUND THAT THE CIT(APPEALS) HAS RIGHTLY RESTRICTED THE RECEIPT FROM ROHINI LODGE AT 50% OF WHAT WAS ESTIMATED BY THE ASSESSING OFFICER. THE ASSESSEE C ONTINUED THE SAME PATTERN OF SUPPRESSION DURING THIS PERIOD ALSO . THEREFORE, THIS TRIBUNAL HAS NO REASON TO INTERFERE WITH THE ORDERS OF THE CIT(APPEALS) FOR THE ASSESSMENT YEARS UNDER CONSIDE RATION ALSO. 15 I.T.A. NOS.1484 TO 1489/MDS/12 C.O. NOS.155 TO 160/MDS/12 I.T.A. NOS.263 & 264/MDS/14 19. THE NEXT GROUND OF APPEAL IS WITH REGARD TO EST IMATION OF SUPPRESSION OF SALE ON SALE OF LIQUOR FROM THE PERM IT ROOM. THE ASSESSING OFFICER ESTIMATED THE TOTAL SUPPRESSION O F SALE AT 47%. HOWEVER, THE CIT(APPEALS) RESTRICTED THE SAME AT 30 %. THE ASSESSEE ALSO FILED CROSS-OBJECTIONS AGAINST THE OR DERS OF THE CIT(APPEALS) RESTRICTING THE SUPPRESSION OF SALE TO 30%. IN FACT, THE SUPPRESSION OF SALE OF LIQUOR WAS CONSIDERED IN THE EARLIER PART OF THIS ORDER AND AFTER TAKING INTO CONSIDERATION THE NATURE OF BUSINESS AND PRICE DISCOUNT GIVEN BY THE ASSESSEE TO THE COR PORATE GUESTS, WALK IN CUSTOMERS, HAPPY HOURS DISCOUNT, ETC., THIS TRIBUNAL FOUND THAT ESTIMATION OF SUPPRESSION OF SALE AT 26% WOULD MEET ENDS OF JUSTICE. ACCORDINGLY, THE ORDERS OF THE LOWER AUTH ORITIES ARE MODIFIED AND THE ASSESSING OFFICER IS DIRECTED TO ESTIMATE T HE SUPPRESSION OF SALE AT 26% INSTEAD OF 47%. 20. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE AND CROSS- OBJECTIONS OF THE ASSESSEE ARE PARTLY ALLOWED. 21. IN THE RESULT, I.T.A. NOS.1484, 1487, 1488 & 14 89/MDS/2012 ARE PARTLY ALLOWED AND C.O. NOS.155, 158, 159 & 160 /MDS/2012 ARE PARTLY ALLOWED. 16 I.T.A. NOS.1484 TO 1489/MDS/12 C.O. NOS.155 TO 160/MDS/12 I.T.A. NOS.263 & 264/MDS/14 ORDER PRONOUNCED ON 4 TH SEPTEMBER, 2015 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 6 /DATED, THE 4 TH SEPTEMBER, 2015. KRI. / ,278 98(2 /COPY TO: 1. '12 /ASSESSEE 2. ASSESSING OFFICER 3. 3 :2 () /CIT(A)-VI, CHENNAI 4. 3 :2 () /CIT(A) (CENTRAL)-I, CHENNAI 5. 3 :2 /CIT IV, CHENNAI 6. 3 :2 /CIT, CHENNAI-I, CHENNAI 7. 8; ,2 /DR 8. <' = /GF.