Income Tax Officer, Ward-1, Nalgonda V. Sri Sridhar Reddy Lokasani, Nalgonda

ITA 1834/HYD/2013

• Counselvise Citation: 183422514 RSA 2013
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 27-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ADAGIRI
• Keywords: Rejection of books of accounts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE S/SHRI B. RAMAKOTAIAH, A.M. & SAKTIJIT DEY, J.M. ITA.NO. A.Y. APPELLANT RESPONDENT 1825/H/2013 2009- 2010 ITO, WARD-1, NALGONDA . SRI ASHOK REDDY, MADDI, PROP. MAYURU WINES, RAMAGIRI, NALGONDA DT. PAN ALUPM7817N 1826/H/2013 2008- 2009 SRI YANALA VENKAT REDDY, PROP. LAXMI WINES, NAKREKAL, NALGONDA DIST. PAN ABEPY0271E 1827/H/2013 2009- 2010 SRI KONDA JANAIAH, PROP. KONDASRI WINES, NAKREKAL, NALGONDA DIST. PAN AGKPJ3812F 1828/H/2013 SRI V. SRINIVASA REDDY, PROP. KAVERI WINES, YELLAMMAGUDEM, TIPPARTHY (M). NALGONDA DIST. PAN AHIPV7040C 1829/H/2013 SRI P. SRINIVASA GOUD, PROP. L.N. WINES, NARAYANPUR, NALGONDA DIST. PAN APVPP6681A 1830/H/2013 SRI GATTU BAL REDDY, PROP. MADHU WINES, AMMANABOLU (V), NARKETPALLY, NALGONDA DIST. PAN AOWPG6511J 1831/H/2013 SRI GAIKWAD SITHARAM BABU, PROP. MADHURI WINES, HALIA, NALGONDA DIST. PAN-AKNPG7196A 1832/H/2013 SRI NARASIMHA PULIPATI, PROP. VIJAYALAXMI WINES, DEVARAKONDA, NALGONDA DIST. PAN AGMPP5132E 1833/H/2013 SRI K. MADHAVA REDDY, PROP. SUPREME WINES, DINDI POST, NALGONDA PAN AJFPK0094G 2 ITA.NO. 1825 TO 1826/HYD/2013 SRI ASHOK REDDY MADDI AND OTHERS, 1834/H/2013 2009- 2010 ITO, WARD-1, NALGONDA SRI SRIDHAR REDDY LOKASANI, PROP. HONEY WINES, KOMMEPALLY, THURUPUPALLY, DEVARAKONDA, NALGONDA DIST. PAN ACHPL9086C 1835/H/2013 SMT. KUMARI GODAVARTHI, PROP. LAXMI WINES, NAGARJUNA SAGAR, NALGONDA DIST. PAN APQPG 9410B 1836/H/2013 SRI EADEM BHANU PRAKASH, PROP. SRI VINAYAKA WINES, MADHAPUR (V), NARKETPALLY, NALGONDA DIST. PAN AAOPE 4881D FOR REVENUE : MR. B. YADAGIRI FOR ASSESSEE : -NONE- DATE OF HEARING : 23.04.2014 DATE OF PRONOUNCEMENT : 25.04.2014 ORDER PER BENCH THESE 12 APPEALS BY REVENUE ARE DIRECTED AGAI NST THE ORDER OF THE CIT(A)-VI, HYDERABAD FOR THE A.Y. 2008-2009 AND 2009-10. THE REVENUE IN ITS APPEALS HAS RAISED 6 GROUNDS ON TWO ISSUES I.E., REJECTION OF BOOKS OF ACCOUNTS AND ESTIMATION OF PROFITS. THE APPEALS ARE POSTED FOR H EARING AND NOTICES WERE SENT THROUGH RPAD TO ASSESSEES, BUT TH E SAME ARE RETURNED UN-SERVED WITH A POSTAL REMARK ADDRES SEE LEFT. THERE IS NO INTIMATION ABOUT CHANGE OF ADDRESS. ACC ORDINGLY, AFTER HEARING THE LEARNED D.R. THE APPEALS WERE DEC IDED EX- PARTE ASSESSEE. 3 ITA.NO. 1825 TO 1826/HYD/2013 SRI ASHOK REDDY MADDI AND OTHERS, 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE S ARE CARRYING ON THE BUSINESS OF RETAIL TRADE IN LIQ UOR. WHILE COMPLETING THE ASSESSMENT, THE A.O. REJECTING THE BOOK RESULTS DECLARED BY THE ASSESSEES, ESTIMATED T HE GROSS PROFIT AT 27% ON THE VALUE OF THE STOCK PUT T O SALE. 3. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). ON THE ISSUE OF REJECTION OF BOOKS THE LD. CIT(A) CONFIRMED THE ACTION OF THE A.O. IN REJE CTING THE BOOKS. WITH RESPECT OF ESTIMATION OF PROFIT, TH E LD. CIT(A) OBSERVED THAT IT IS AN ESTABLISHED FACT THAT WHERE BOOKS ARE NOT RELIABLE, THE ESTIMATION MAY BE RESOR TED BUT SUCH ESTIMATION SHOULD BE BASED ON REASONABLE A ND COMPARABLE BASIS. HENCE, BY FOLLOWING THE ORDER OF THE ITAT IN THE CASE OF M/S. AMARAVATHI WINE SHOP IN ITA.NO.1196/HYD/2011 DATED 08.06.2012, THE LD. CIT(A) DIRECTED THE A.O. TO ESTIMATE THE NET PROFIT AT 5% ON THE PURCHASES OR STOCK PUT FOR SALE DURING THE Y EAR, WHICHEVER IS MORE. FURTHER, IN ESTIMATING THE PROFI TS, HE DIRECTED THAT THE INCOME ALREADY OFFERED BY THE ASS ESSEE ON SUCH SALES, MAY BE TAKEN INTO CONSIDERATION, TO AVOID THE DUPLICATION OF INCOME. 4. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENUE PREFERRED THE PRESENT APPEALS BEFORE THE TRIBUNAL RAISING COMMON GROUNDS IN ALL THE APPEALS. FOR THE SAKE OF CONVENIENCE, WE REPRODUCE GROUNDS RAISED BY THE REVENUE IN ITA.NO.1825/HYD/2013 : 4 ITA.NO. 1825 TO 1826/HYD/2013 SRI ASHOK REDDY MADDI AND OTHERS, 1. THE ORDER OF LD. CIT(A) IS ERRONEOUS ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 2. THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ESTIMATION OF SALES @ 27% OF THE COST OF LIQUOR PUT TO SALE AS PER GOVERNMENT OF A.P. PROHIBITION & EXCISE GOMS.184 DATED 07.02.2005 AND ASSESSMENT OF UNDERSTATEMENT OF SALES. 3. THE LD. CIT(A) ERRED IN RELYING ON THE DECISION OF ITAT IN THE CASE OF M/S. AMARAVATHI WINES, HYDERABAD THE NET PROFIT HAS BEEN ESTIMATED @ 5% OF THE COST OF LIQUOR PUT TO SALE TAKING THE PREVIOUS HISTORY OF PROFIT WHEREAS THE ASSESSEE HAS NO PAST HISTORY AND THE LIQUOR TRADERS IN NALGONDA DISTRICT ARE SELLING THE LIQUOR AS PER MRP OR EVEN MORE THAN MRP. 4. THE LD. CIT(A) ERRED IN RELYING UPON THE DECISION OF ITAT-B BENCH, HYDERABAD, IN THE CASE OF M/S. AMARAVATHI WINES, HYDERABAD IN ITA.NO.1196/HYD/2011, DATED 08.06.2012, SINCE THE VOLUME OF BUSINESS, LOCATION OF BUSINESS AND PROFITS IN THE CASE OF VENKATESWARA WINES, HYDERABAD CANNOT BE COMPARED WITH THAT OF THE ASSESSEE AND ALSO THAT EACH ASSESSMENT PROCEEDINGS ARE INDEPENDENT 5. THE LD. CIT(A) OUGHT TO HAVE UPHELD THE UNDERSTATEMENT OF SALES DETERMINED IN THE ASSESSMENT ORDER INSTEAD OF DIRECTING TO ESTIMATE THE NET PROFIT @ 5% OF COST OF LIQUOR PUT TO SALE. 6. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING WITH THE PERMISSION OF THE BENCH. 5. GROUND NOS. 1 AND 6 ARE GENERAL IN NATURE AND THEREFORE, IT NEED NOT BE ADJUDICATED. 6. GROUND NOS. 2 TO 5 PERTAINS TO DETERMINATION OF PROFITS IN THE BUSINESS OF WINES. 7. AFTER CONSIDERING THE ARGUMENTS OF THE LEARNED D.R. WE DO NOT FIND ANY REASON TO INTERFERE WITH TH E ORDER OF THE CIT(A) WHO FOLLOWED THE DECISIONS OF THE COORDI NATE BENCH 5 ITA.NO. 1825 TO 1826/HYD/2013 SRI ASHOK REDDY MADDI AND OTHERS, AS STATED ABOVE. IN SIMILAR MATTERS, THE COORDINATE BENCHES OF THE TRIBUNAL HAVE BEEN CONSISTENTLY DIRECTING ADOPT ION OF RATE OF 5% OF THE PURCHASE VALUE OR STOCK PUT TO USE WHI CHEVER IS MORE. 8. THE DECISION IN THE CASE OF ITO, WARANGAL VS. S HRI P. RAMAIAH AND OTHERS IN ITA.NO.1739/HYD/2012 DATED 21.03.2013 IS AS FOLLOWS : '4. WE HAVE HEARD THE PARTIES PRESENT AND PERUSED T HE MATERIAL ON RECORD IN THE LIGHT OF THE IMPUGNED ORD ERS OF THE CIT(A). WE FIND THAT THE ISSUE INVOLVED IN THE PRES ENT APPEAL IS SQUARELY COVERED BY THE CONSISTENT VIEW TAKEN BY THE COORDINATE BENCHES OF THIS TRIBUNAL IN SIMILAR MATT ERS, AS IN THE CASE OF ITO V/S. SHRI PITTALA YAKAIAH, NALGONDA & ORS. IN ITA NO. 2191/HYD/2011 & ORS., WHEREIN THIS TRIBU NAL VIDE DATED 13 TH APRIL, 2012, HELD THAT INCOME OF T HE ASSESSEES IN THE LINE OF LIQUOR BUSINESS HAS TO BE ESTIMATED AT 5% COST OF SALES MADE BY THEM. IN FACT, THE CIT( A) DIRECTED THE ASSESSING OFFICER TO DETERMINE THE PROFIT @ 5% OF THE COST OF THE GOODS SOLD RELYING ON THE ORDER OF THE TRIBU NAL IN THE CASE OF M/S. AMARAVATI WINE SHOP, IN ITA NO. 1196/HYD/2011 DATED 8.6.2012. SINCE THE IMPUGNED OR DER OF THE CIT(A) IS IN CONSONANCE WITH THE CONSISTENT VIEW TAKEN BY THE COORDINATE BENCHES OF THE TRIBUNAL IN SIMILA R MATTERS, WE DO NOT FIND ANY INFIRMITY IN THE IMPUGNED ORDERS OF THE CIT(A). WE ACCORDINGLY UPHOLD THE SAME, REJECTING T HE GROUNDS OF THE REVENUE IN THESE APPEALS'. 9. CONSISTENT WITH THE STAND TAKEN BY THE TRIBUNA L IN SIMILAR MATTERS, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) 6 ITA.NO. 1825 TO 1826/HYD/2013 SRI ASHOK REDDY MADDI AND OTHERS, AND WE ACCORDINGLY UPHOLD THE ORDER OF THE CIT(A) A ND REJECT THE GROUNDS OF THE REVENUE IN THIS APPEAL. 10. IN THE RESULT, APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25.04.2014. SD/- SD/- (SAKTIJIT DEY) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 25 TH APRIL, 2014 VBP/- COPY TO : 1. INCOME TAX OFFICER, WARD-1, NALGONDA 2. ASHOK REDDY, MADDI, PROP. MAYURU WINES, SHOP N O.6, SLN SWAMY COMPLEX, RAMAGIRI, NALGONDA DT. 3. SRI YANALA VENKAT REDDY, PROP. LAXMI WINES, H.NO.15-168, NAKREKAL, NALGONDA DIST. 4. SRI KONDA JANAIAH, PROP. KONDASRI WINES, NAKRE KAL, NALGONDA DIST. 5. SRI V. SRINIVASA REDDY, PROP. KAVERI WINES, YELLAMMAGUDEM, TIPPARTHY (M). NALGONDA DIST. 6. SRI P. SRINIVASA GOUD, PROP. L.N. WINES, NARAY ANPUR, NALGONDA DIST. 7. SRI GATTU BAL REDDY, PROP. MADHU WINES, AMMANA BOLU (V), NARKETPALLY, NALGONDA DIST. 8. SRI GAIKWAD SITHARAM BABU, PROP. MADHURI WINES , HALIA, NALGONDA DIST. 9. SRI NARASIMHA PULIPATI, PROP. VIJAYALAXMI WINE S, H.NO. 19 BLOCK, MAIN ROAD, DEVARAKONDA, NALGONDA DIST. 10. SRI K. MADHAVA REDDY, PROP. SUPREME WINES, H.NO.1-108/1, DINDI POST, NALGONDA. 11. SRI SRIDHAR REDDY LOKASANI, PROP. HONEY WINES, H.NO.2-23/1, KOMMEPALLY, THURUPUPALLY, DEVARA KONDA, NALGONDA DIST. 12. SMT. KUMARI GODAVARTHI, PROP. LAXMI WINES, H.N O. P-46, PYLON COLONY, NAGARJUNA SAGAR, NALGONDA DIST . 13. SRI EADEM BHANU PRAKASH, PROP. SRI VINAYAKA WI NES, H.NO.1-48, MADHAPUR (V), NARKETPALLY, NALGON DA DIST. 14. CIT(A)-VI, 6A, I.T. TOWERS, A.C. GUARDS, HYDER ABAD-004. 15. CIT-VI, HYDERABAD. 16. D.R. ITAT, A BENCH, HYDERABAD. 7 ITA.NO. 1825 TO 1826/HYD/2013 SRI ASHOK REDDY MADDI AND OTHERS,