ITO, Ward-3, Warangal, Warangal V. Shri Akuthota Sudhakar (HUF), Warangal

ITA 1823/HYD/2014

• Counselvise Citation: 182322514 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
• Assessee Lawyers: P RAVI SESHAGIRI RAO
• 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.1823/HYD/2014 ASSESSMENT YEAR 2010-2011 THE INCOME TAX OFFICER WARD-3, WARANGAL VS. SHRI AKUTHOTA SUDHAKAR (HUF) PROP. S.S.S. WINES, WARANGAL PAN AAIHA8094E (APPELLANT) (RESPONDENT) FOR REVENUE : MR. RAMAKRISHNA BANDI FOR ASSESSEE : MR. P. RAVISESHAGIRI RAO 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 27. 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 NET PROFIT RATE OF 25% APPLIED BY THE ASSESSING OFFICER. 2. THE ASSESSEE IN THE PRESENT CASE IS A HUF WHICH IS ENGAGED IN THE BUSINESS OF LIQUOR TRADE ON RETAIL B ASIS IN THE NAME S.S.S. WINES. THE RETURN OF INCOME FOR THE YEA R UNDER CONSIDERATION WAS FILED BY IT ON 13.10.2010 DECLARI NG TOTAL INCOME OF RS.7,60,257. ALTHOUGH THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS PRODUCED THE BOOKS OF ACCOUNTS, PURCHASE INVOICES AND EXPENSES VOUCHERS, THE SALES 2 ITA.NO.1823/HYD/2014 SHRI AKUTHOTA SUDHAKAR (HUF), WARANGAL. BILLS COULD NOT BE PRODUCED BY IT ON THE GROUND THA T NO SUCH BILLS WERE REGULARLY MAINTAINED/ISSUED. IN THE ABSE NCE OF THE SALE BILLS, THE TOTAL SALES DECLARED BY THE ASSESSE E WAS FOUND TO BE NOT VERIFIABLE BY THE ASSESSING OFFICER. HE ACCO RDINGLY REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE INC OME OF THE ASSESSEE BY APPLYING GROSS PROFIT RATE OF 25% ON PU RCHASE VALUE OF SALES AFTER DEDUCTING EXPENDITURE OF RS.46 ,10,800 CLAIMED BY THE ASSESSEE. ACCORDINGLY, THE TOTAL INC OME OF THE ASSESSEE WAS DETERMINED BY THE A.O. AT RS.94,95,673 IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VIDE ORDE R DATED 28.03.2013. 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 ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. A S AGREED BY THE LEARNED REPRESENTATIVE OF BOTH THE SIDES, THE I SSUE INVOLVED IN THIS APPEAL IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL I N THE CASE OF M/S. AMARAVATI WINES (SUPRA) WHEREIN A SIMILAR ISSU E WAS 3 ITA.NO.1823/HYD/2014 SHRI AKUTHOTA SUDHAKAR (HUF), WARANGAL. DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE I N IDENTICAL FACTS AND CIRCUMSTANCES HOLDING THAT THE INCOME OF THE ASSESSEE FROM LIQUOR BUSINESS COULD REASONABLY BE E STIMATED BY APPLYING THE NET PROFIT RATE OF 5% ON THE VALUE OF PURCHASES AND STOCK PUT FOR SALE DURING THE RELEVANT YEAR. RE SPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF T HIS TRIBUNAL IN THE CASE OF M/S. AMARAVATI WINES (SUPRA), WE UPH OLD THE IMPUGNED ORDER OF THE LD. CIT(A) DIRECTING THE A.O. TO ESTIMATE THE INCOME OF THE ASSESSEE FROM LIQUOR BUSINESS BY APPLYING THE NET PROFIT RATE OF 5% ON THE VALUE OF PURCHASE AND STOCK PUT TO USE DURING THE YEAR 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-3, AAYAKAR BHAVAN, STA TION ROAD, WARANGAL 2. SHRI AKUTHOTA SUDHAKAR (HUF), PROP. S.S.S. WINES, H.NO.19-6-275, RANGASAIPET, WARANGAL. 3. CIT(A)-VI, HYDERABAD 4. CIT-VI, HYDERABAD. 5. D.R. I.T.A.T. A BENCH, HYDERABAD.