Balaji Wines , Hyderabad V. Income Tax Officer, Ward-15(3), Hyderabad

ITA 1818/Hyd/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6131 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2015-2016
• Appeal Filed On: 10-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VARIOUS DECISIONS OF THIS TRIBUNAL
• Keywords: Business income

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. 1818/HYD/2018 ASSESSMENT YEAR: 2015-16 M/S. BALAJI WINES, NO. 14-208, MIRJALAGUDA, MALKAJGIRI, HYDERABAD - 47 PAN AAMFB9482D VS. THE INCOME TAX OFFICER WARD 15 (3), HYDERABAD. (APPLICANT) (RESPONDENT) ASSESSEE BY : SHRI A.V. RAGHURAM, AR REVENUE BY : SHRI A.C. ROUT, DR DATE OF HEARING : 09-01-2019 DATE OF PRONOUNCEMENT : 16-01-2019 ORDER PER P. MADHAVI DEVI, J.M.: THIS IS ASSESSEES APPEAL FOR THE A.Y 2015-16 AGAINST THE ORDER OF THE CIT(A)-7, HYDERABAD DATED 10.07.2018, CONFIRMING THE ORDER OF THE A.O IN ESTIMATING THE INCOME OF ASSESSEE AT 5% ON LIQUOR SALES. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LD. CIT(A) IS ERRONEOUS BOTH ON FACTS AND IN LAW IN SO FAR AS IT IS PREJUDICIAL TO THE ASSESSEE. 2. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ESTIMATION OF INCOME FROM WINE SHOP AT 5% OF STOCK PUT TO SALE AGAINST 3% BEING APPROVED BY THE TRIBUNAL IN CONTRARY TO THE PRINCIPLES OF JUDICIAL DISCIPLINE. 3. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 1,96,817/- RELATING TO OTHER INCOME THOUGH THE EXPENSES RELATING THIS INCOME IS IN PROFIT AND LOSS ACCOUNT DEBIT SIDE WHICH THE AO 2 ITA.NO. 1818/HYD/2018 M/S. BALAJI WINES, HYDERABAD. HAS NOT CONSIDERED INSTEAD OF ADDING THIS TO THE STOCK PUT TO SALE FOR ESTIMATE PURPOSES. 4. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 2. AS REGARDS GROUND OF APPEAL NO. 2, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY VARIOUS DECISIONS OF THIS TRIBUNAL, WHEREIN THE ITAT HAS HELD THAT THE ESTIMATION OF PROFIT AT 3% OF THE COST OF GOODS PUT TO SALE IS REASONABLE. WE FIND THAT IN SIMILAR CIRCUMSTANCES, THIS TRIBUNAL, IN A NUMBER OF CASES (TO WHICH BOTH OF US ARE SIGNATORIES) HAS ESTIMATED THE INCOME AT 3% OF THE COST OF GOODS PUT TO SALE. THEREFORE, IN THIS CASE ALSO, WE DIRECT THE A.O TO ESTIMATE THE INCOME AT 3% OF THE COST OF GOODS PUT TO SALE. ACCORDINGLY THE GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE IS ALLOWED. 3. AS REGARDS GROUND OF APPEAL NO. 3, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS RECEIVED INCOME OF RS. 1,96,817/- FROM SALE OF EMPTY BOTTLES, CARTONS AND MISCELLANEOUS INCOME ETC. HE SUBMITTED THAT THIS IS ALSO PART OF BUSINESS INCOME, THEREFORE, THE INCOME FROM THIS SOURCE ALSO SHOULD BE ESTIMATED AT THE SAME RATE. THE A.O AND THE CIT(A) DID NOT AGREE WITH THE CONTENTION OF THE ASSESSEE AND HAS BROUGHT THE SAID AMOUNT TO TAX. THE LD. COUNSEL FOR THE ASSESSEE HAS FILED THE COPIES OF THE PROFIT AND LOSS ACCOUNT BEFORE US. WE FIND THAT THE ASSESSEE ITSELF HAS SHOWN THIS AS INCOME FROM SALE OF EMPTY BOTTLES, CARTONS AND MISCELLANEOUS INCOME ETC AS A SEPARATE ITEM FROM THE BUSINESS OF SALE OF LIQUOR. WHAT IS 3 ITA.NO. 1818/HYD/2018 M/S. BALAJI WINES, HYDERABAD. ESTIMATED AS BUSINESS INCOME IS ONLY THE INCOME FROM SALE OF LIQUOR AND THE INCOME FROM SALE OF EMPTY BOTTLES IS A SEPARATE SOURCE OF INCOME. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) AND THIS GROUND OF APPEAL IS REJECTED. 4. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 16 TH JANUARY, 2019. SD/- SD/- (S. RIFAUR RAHMAN) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 16 TH JANUARY, 2019 KRK 1) M/S BALAJI WINES, C/O K. VASNTKUMAR, A.V. RAGHU RAM & P. VINOD, ADVOCATES, 610, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD. 2) ITO, WARD 15(1), SIDDIPET. 3) CIT(A)-7, HYDERABAD 4) PR.CIT-7, HYDERABAD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6) GUARD FILE.