ITO, Ward-3, Warangal, Warangal V. Shri Srinivas Dasari, Warangal

ITA 1824/HYD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91560 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2015
• 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

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 1824/HYD/2014 ASSESSMENT YEAR: 2010-11 THE INCOME-TAX OFFICER, WARD 3, WARANGAL. VS. SRINIVAS DASARI, PROP. KANAKADURGA WINES, WARANGAL PAN ARCPD3365N (APPELLANT) (RESPONDENT) REVENUE BY : SHRI RAMAKRISHNA BANDI ASSESSEE BY : NONE DATE OF HEARING 20-04-2015 DATE OF PRONOUNCEMENT 20-04-2015 O R D E R PER SAKTIJIT DEY, J.M.: THIS APPEAL FILED BY THE DEPARTMENT, IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-VI, HYDERABAD DATED 27/08/2014 FOR THE ASSESSMENT YEAR 2010-11. 2. AS SEEN FROM THE RECORD, THOUGH, NOTICE ISSUED B Y THE REGISTRY INTIMATING THE DATE OF HEARING OF APPEAL WAS SERVED ON ASSESSEE- RESPONDENT, BUT, AT THE TIME OF HEARING, NO ONE REP RESENTED ASSESSEE. CONSIDERING THE NATURE OF DISPUTE, WE PROCEED TO DI SPOSE OF THE APPEAL EXPARTE, QUA ASSESSEE-RESPONDENT, AFTER HEAR ING LD. DR. 3. AS CAN BE SEEN FROM THE GROUND RAISED, THE DEPAR TMENT IS AGGRIEVED WITH THE DECISION OF LD. CIT(A) IN REDUCI NG THE RATE OF ESTIMATION OF PROFIT OF LIQUOR TRADE FROM 25% TO 5% . 2 ITA NO. 1824/HYD/2014 SRINIVAS DASARI, PROP. KANAKADURGA WINES, WARANGAL 4. BRIEFLY THE FACTS ARE, ASSESSEE AN INDIVIDUAL IS ENGAGED IN LIQUOR TRADE THROUGH ITS PROPRIETARY CONCERN KANAKADURGA W INES, SITUATED AT DORNAKAL, WARANGAL DISTRICT. FOR THE AY UNDER CONSI DERATION, ASSESSEE FILED RETURN OF INCOME ON 13/10/2010 DECLA RING TOTAL INCOME OF RS. 4,70,338. IN COURSE OF ASSESSMENT PROCEEDING , AO ON VERIFYING THE P&L A/C WAS OF THE VIEW THAT THE PROFIT DECLARE D BY ASSESSEE FROM LIQUOR TRADE IS VERY LOW. HE, THEREFORE, CALLED UPO N ASSESSEE TO EXPLAIN THE SAME. IN RESPONSE, ASSESSEE SUBMITTED T HAT IN SIMILAR NATURE OF BUSINESS, ITAT HAS DIRECTED FOR ESTIMATIO N OF NET PROFIT AT 3% ON STOCK PUT TO SALE. IN SUPPORT OF SUCH SUBMISS ION, ASSESSEE ALSO RELIED UPON FEW DECISIONS OF ITAT ON THE ISSUE. AO , HOWEVER, DID NOT FIND MERIT IN THE SUBMISSIONS OF ASSESSEE. HE OBSER VED THAT DEPARTMENT HAS FILED APPEALS BEFORE HONBLE A.P. H IGH COURT AGAINST THE ORDERS OF ITAT. ON THE BASIS OF THE AFORESAID R EASONING, AO PROCEEDED TO ESTIMATE THE GROSS PROFIT ON PURCHASE VALUE OF LIQUOR AT 25% AND AFTER GIVING CREDIT TO EXPENDITURE CLAIMED BY ASSESSEE, THE NET PROFIT FROM LIQUOR BUSINESS WAS DETERMINED AT R S. 35,58,417. BEING AGGRIEVED WITH THE ESTIMATION OF PROFIT AT 25 % ON LIQUOR TRADE, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A). 5. LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE, OBSERVED THAT INCASE OF M/S AMARAVATHI WINE SHOP IN ITA NO. 1196/HYD/2011 DATED 08/06/12, ITAT, HYDERABAD BENCH HAS DIRECTED FOR ESTIMATION OF NET PROFIT AT 5% ON PURCHASES OR STOCK PUT FOR SALE DURING THE RELEVANT PY. FOLLOWING THE DECISION OF I TAT, LD. CIT(A) DIRECTED AO TO ESTIMATE THE NET PROFIT AT 5% ON PUR CHASES OR STOCK PUT UP FOR SALE DURING THE YEAR WITH A RIDER THAT ASSES SED INCOME IN ANY CASE SHOULD NOT BE LESS THAN THE RETURNED INCOME. 6. WE HAVE HEARD THE LD. DR AND PERUSED THE RELEVAN T MATERIALS ON RECORD AS WELL AS ORDERS OF REVENUE AUTHORITIES. AS CAN BE SEEN FROM THE FACTS ON RECORD, THE ONLY DISPUTE IS WITH REGARD TO RATE OF PROFIT APPLIED BY LD. CIT(A). HOWEVER, IT IS A FACT ON RECORD THAT ITAT, 3 ITA NO. 1824/HYD/2014 SRINIVAS DASARI, PROP. KANAKADURGA WINES, WARANGAL HYDERABAD BENCHES WHILE CONSIDERING IDENTICAL NATUR E OF DISPUTE HAS DIRECTED FOR ESTIMATION OF PROFIT @ 5% ON PURCHASES OR STOCK PUT UP FOR SALE DURING THE RELEVANT YEAR. THE DEPARTMENT H AS NOT BROUGHT ANY MATERIAL TO SHOW THAT THE FACTS INVOLVED IN THE PRE SENT APPEAL ARE IN ANY WAY DIFFERENT FROM THE FACTS CONSIDERED BY ITAT , HYDERABAD BENCHES WHILE DIRECTING ESTIMATION OF PROFIT AT 5% ON LIQUOR TRADE. THE DEPARTMENT HAS ALSO NOT BROUGHT ANY OTHER CONT RARY DECISION TO OUR NOTICE. THAT BEING THE CASE, SINCE LD. CIT(A) H AS FOLLOWED THE DECISION OF THE ITAT, HYDERABAD BENCHES WHILE DIREC TING ESTIMATION OF PROFIT FROM LIQUOR TRADE AT 5% ON PURCHASES OR S TOCK PUT UP FOR SALE DURING THE YEAR, WE DO NOT FIND ANY INFIRMITY IN TH E DECISION OF LD. CIT(A). ACCORDINGLY, WE UPHOLD THE SAME BY DISMISSI NG THE GROUNDS RAISED BY DEPARTMENT. 5. IN THE RESULT, DEPARTMENTS APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 20 TH APRIL, 2015 UPON CONCLUSION OF HEARING. SD/- SD/- (P.M. JAGTAP) (SAK TIJIT DEY) ACCOUNTANT MEMBER JUDICIA L MEMBER HYDERABAD, DATED: 20 TH APRIL, 2015 KV COPY TO:- 1) ITO, WARD 3, AAYAKAR BHAVAN, STATION ROAD, WA RANGAL. 2) SRI SRINIVAS DARASAR, PROP. KANAKADURGA WINES, H . NO. 3-1-134, SARDARI QUARTERS, STATION ROAD, DORNKAL, WARANGA L. 3 CIT(A)-VI, HYDERABAD 4)CIT-VI, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S. 4 ITA NO. 1824/HYD/2014 SRINIVAS DASARI, PROP. KANAKADURGA WINES, WARANGAL 2. DRAFT PLACED BEFORE AUTHOR SR.P.S 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER VP 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S. 6. KEPT FOR PRONOUNCEMENT ON SR.P S. 7. FILE SENT TO THE BENCH CLERK SR.P.S. 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER