ITO, Ward-1, Warangal, Warangal V. M/s Parklane Wines, Warangal

ITA 1822/HYD/2014

• Counselvise Citation: 182222514 RSA 2014
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-04-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 03-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Keywords: Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI P. M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO.1822/HYD/2014 ASSESSMENT YEAR 2010-2011 THE INCOME TAX OFFICER WARD-1, WARANGAL VS. M/S. PARKLANE WINES WARANGAL. PAN AAKFP4462F (APPELLANT) (RESPONDENT) FOR REVENUE : MR. RAMAKRISHNA BANDI FOR ASSESSEE : : -NONE- DATE OF HEARING : 20.04.2015 DATE OF PRONOUNCEMENT : 22.04.2015 ORDER PER P.M. JAGTAP, A.M. THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A)-VI, HYDERABAD DATED 25. 08.2014 WHEREBY HE DIRECTED THE A.O. TO ESTIMATE THE INCOME OF THE ASSESSEE FROM LIQUOR BUSINESS BY APPLYING NET PROFI T RATE OF 5% ON PURCHASE OR STOCK PUT FOR SALE DURING THE YEAR U NDER CONSIDERATION AS AGAINST THE PROFIT RATE OF 25% APP LIED BY THE ASSESSING OFFICER. 2. ASSESSEE IN THE PRESENT CASE IS A PARTNERSHIP F IRM WHICH IS ENGAGED IN THE RETAIL BUSINESS OF LIQUOR T RADE. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION W AS FILED BY IT ON 12.10.2010 DECLARING TOTAL INCOME OF RS.2,28, 821. ALTHOUGH THE ASSESSEE DURING THE COURSE OF ASSESSME NT PROCEEDINGS PRODUCED THE BOOKS OF ACCOUNTS, PURCHAS E 2 ITA.NO.1822/HYD/2014 M/S. PARKLANE WINES, WARANGAL. INVOICES AND EXPENSES VOUCHERS, THE SALES BILLS COU LD NOT BE PRODUCED BY IT ON THE GROUND THAT NO SUCH BILLS WER E REGULARLY MAINTAINED/ISSUED. IN THE ABSENCE OF THE SALE BILLS , THE TOTAL SALES DECLARED BY THE ASSESSEE WAS FOUND TO BE NOT VERIFIABLE BY THE ASSESSING OFFICER. HE ACCORDINGLY REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE INCOME OF THE ASSESSEE BY APPLYING GROSS PROFIT RATE OF 25% ON PURCHASE VALUE OF SALES AFTER DEDUCTING EXPENDITURE OF RS.37,80,773 CLAIMED BY TH E ASSESSEE. ACCORDINGLY, TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE A.O. AT RS.1,26,77,485 IN THE ASS ESSMENT COMPLETED UNDER SECTION 143(3) VIDE ORDER DATED 20. 03.2013. 3. AGAINST THE ORDER PASSED BY THE A.O. UNDER SECT ION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEF ORE THE LD. CIT(A) WHO FOLLOWED THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S. AMARAVATI WINE SHOP RENDERED VIDE ITS ORDER DA TED 08.06.2012 IN ITA.NO.1196/HYD/2011 AND DIRECTED THE A.O. TO ESTIMATE THE INCOME OF THE ASSESSEE BY APPLYING A N ET PROFIT RATE OF 5% ON THE VALUE OF PURCHASE OR STOCK PUT FO R SALE DURING THE YEAR UNDER CONSIDERATION. HE ALSO DIRECT ED THE A.O. THAT IF THE INCOME OF THE ASSESSEE SO ESTIMATED IS FOUND TO BE LESS THAN THE INCOME RETURNED BY IT, THE INCOME RET URNED BE COMPUTED AS TOTAL INCOME OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND ALSO PERUSED THE RELEVANT MATERI AL ON RECORD. AS AGREED BY THE LEARNED DEPARTMENTAL REPRE SENTATIVE THE ISSUE INVOLVED IN THIS APPEAL IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE INTER ALIA BY THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S. 3 ITA.NO.1822/HYD/2014 M/S. PARKLANE WINES, WARANGAL. AMARAVATI WINES (SUPRA) WHEREIN A SIMILAR ISSUE WAS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE I N IDENTICAL FACTS AND CIRC UMSTANCES HOLDING THAT THE INCOME OF THE ASSESSEE FROM LIQUOR BUSINESS COULD REASONABLY BE ESTIMATED BY APPLYING THE NET PROFIT RATE OF 5% ON THE VALUE OF PURCHASE AND STOCK PUT FOR SALE DURING THE RELEVANT YEAR. RESPECTFULLY FOLLOWING THE SAID DECISION OF THE COO RDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S. AMARAVAT I WINES (SUPRA), WE UPHOLD THE IMPUGNED ORDER OF THE LD. CI T(A) DIRECTING THE A.O. TO ESTIMATE THE INCOME OF THE AS SESSEE FROM LIQUOR BUSINESS BY APPLYING THE NET PROFIT RATE OF 5% ON THE VALUE OF PURCHASE AND STOCK PUT TO USE DURING THE Y EAR UNDER CONSIDERATION. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.0 4.2015. SD/- SD/- (SAKTIJIT DEY) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 22 ND APRIL, 2015. VBP/- COPY TO 1. THE INCOME TAX OFFICER, WARD-1, WARANGAL 2. M/S. PARKLANE WINES, H.NO.9-2-4, J.P.N. ROAD, WARAN GAL. 3. CIT(A)-VI, HYDERABAD 4. CIT-VI, HYDERABAD. 5. D.R. I.T.A.T. A BENCH, HYDERABAD.