THE DCIT, CENTRAL CIRCLE - 2, Visakhapatnam V. M/s SVC Projects Pvt. Ltd., Visakhapatnam

ITA 188/VIZ/2013

• Counselvise Citation: 18825314 RSA 2013
• Duration Of Justice: 1 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-01-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 25-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: K V N CHARYA
• Section: 263

Judgement Text

1 I.T.A. NO.188/VIZ/2012 ASSESSMENT YEAR:2007-08 IN THE INCOME TAX APPELLATE TRIBUNAL, VISHAKHAPATNA M BEFORE S/SHRI D.MANMOHAN (VP) & J.SUDHAKAR REDDY (A M) I.T.A. NO.188/VIZ/2012 ASSESSMENT YEAR:2007-08 MOTURI RAM PRASAD, PROP. SATYA KRISHNA WINES, KALAPARRU, PEDAPADU MANDALAM, PEDAPADU VS. ITO , WARD - 2, ELURU PAN/GIR NO. : ANJPM 0072 A ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI G.V.N. HARI RESPONDENT BY : SHRI K.V.N. CHARYA DATE OF HEARING : 02/12/2014 DATE OF PRONOUNCEMENT : 3 /12/2014 O R D E R PER J.SUDHAKAR REDDY, AM THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX, RAJAHMUNDRY PASSED UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 DATED 21.2.2012. 2. LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE O RDER OF LD CIT U/S.263 HAS TO BE QUASHED AS THE ISSUES FOR WHICH HE HAS GIVEN SPECIF IC DIRECTION ARE NO MORE RES-INTEGRA, IN VIEW OF THE DECISION OF ITAT VISAKHAPATNAM BENCH IN THE CASE OF T.APPALASWAMY VS ACIT IN ITA NO.65 & 66/VIZAG/2012 DATED 3.3.2014. 2 I.T.A. NO.188/VIZ/2012 ASSESSMENT YEAR:2007-08 3. LD D.R. ON THE OTHER HAND SUBMITTED THAT THERE A RE NUMBER OF ISSUES FOR WHICH LD CIT HAS REVISED HIS ORDER U/S.263 OF THE ACT. HE RELIE D ON PARAS 23,29,30,31 & 32 OF THE ORDER OF LD CIT. 4. AFTER HEARING RIVAL SUBMISSIONS, WE ARE OF THE C ONSIDERED OPINION THAT THE ORDER PASSED U/S.263 HAS TO BE UPHELD AS THE ASSESSEE HAS NOT DI SPUTED THE FINDINGS OF LD CIT AT PAGES 29,30, 31 & 32 OF THE ORDER. COMING TO PARA 23, LD CIT HELD AS FOLLOWS: THE ASSESSEES SUBMISSION HAS BEEN CAREFULLY PERUS ED. HOWEVER, THE HONBLE ITAT WHILE GIVING ITS FINDING IN THE CASE OF SMT. E RRADA SUMATHI, DID NOT CONSIDER THE FACT THAT THE ASSESSEE DID NOT RECORD THE SALES PROPERLY AND ONLY ESTIMATION IS APPROPRIATE IN THIS LINE OF BUSINESS. THE ASSESSME NT COMPLETED BY THE AO RUNS CONTRARY TO THE FINDING GIVEN BY THE HONBLE JURISD ICTIONAL ITAT, VISAKHAPATNAM IN THE CASE OF ACIT VS. M. VEERABHADRA RAO & OTHERS , WHEREIN, THE HONBLE ITAT DIRECTED TO ESTIMATE THE SALES AT 8 TIMES OF PURCHA SE PRICE AND THEN ESTIMATE THE NET PROFIT AT 1% OF SUCH ESTIMATE SALES OR DECLARED SALES WHICHEVER IS MORE CLEAR OFF ALL DEDUCTIONS AND ALLOWANCES. FURTHER, SUBSEQ UENT TO THE DECISION OF THE HONBLE ITAT, HONBLE HIGH COURT OF ANDHRA PRADESH ALSO CONSIDERED THE ISSUE AND ENHANCED THE PERCENTAGE OF PROFIT. 5. THIS BENCH OF THE TRIBUNAL HAS, IN THE CASE OF T .APPALASWAMY VS ACIT (SUPRA), AT PARA 3 HELD AS FOLLOWS: 3. WE HAVE HEARD THE PARTIES, PERUSED THE OR DERS OF THE REVENUE AUTHORITIES AS WELL AS OTHER MATERIALS ON RECORD. IT IS THE C ONTENTION OF THE ID. A.R. THAT THE ESTIMATION OF PROFIT AT 16% IS HIGH AND EXCESSIVE C ONSIDERING THE NORMAL RATE OF PROFIT IN THIS LINE OF BUSINESS. WHEREAS, THE L D. D,R. SUPPORTED THE ORDER OF THE CIT(A). HAVING CONSIDERED THE SUBMISSIONS OF T HE ASSESSEE, WE ARE OF THE VIEW THAT THE ISSUE IS NO MORE RES -INTEGRA IN VIEW OF A SERIES OF DECISIONS OF THE ITAT HYDERABAD BENCH IN SIMILAR CASES. THE COORDIN ATE BENCH IN CASE OF ITA NO.L27/HYD/12 AND OTHERS DATED 18.05.2012 AS WELL A S A NUMBER OF OTHER CASES HAVE HE'D THAT PROFIT IN CASE OF BUSINESS IN INDIAN MADE FOREIGN LIQUOR HAS TO BE ESTIMATED AT 5% OF THE PURCHASES MADE BY THE ASSESS EE. THEREFORE, FOLLOWING THE DECISION OF THE ITAT HYDERABAD BENCH, WE SET AS IDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO ESTIMATE THE PR OFIT FROM THE WINE BUSINESS OF THE ASSESSEE BY APPLYING THE RATE OF 5% OF THE PURC HASES MADE NET OF ALL OTHER DEDUCTIONS. THE AO SHOULD ALSO BEAR IN MIND THAT I N NO CASE THE INCOME DETERMINED SHOULD BE BELOW THE INCOME RETURNED. 6. RESPECTFULLY FOLLOWING THE DECISION OF CO-ORDINA TE BENCH OF THIS TRIBUNAL, WE VACATE THIS PARTICULAR DIRECTION OF LD CIT. THE ORDER U/S.263 IS ACCORDINGLY MODIFIED. THE AO SHALL COMPLETE THE ASSESSMENT KEEPING IN VIEW THE DECISION OF THE TRIBUNAL IN THE CASE OF T.APPALASWAMY(SUPRA). 3 I.T.A. NO.188/VIZ/2012 ASSESSMENT YEAR:2007-08 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON 3 /12/ 2014 . SD/- SD/- (D.MANMOHAN ) (J.SUDHAKAR REDDY) VICE PRESIDENT ACCOUNTANT MEMBER VISHAKHAPATNAM DATED 3 / 12/2014 PARIDA , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE : MOTURI RAM PRASAD, PROP. SATYA KRISHNA WINES, KALAPARRU, PEDAPADU MANDALAM, PEDAPADU 2. THE RESPONDENT. : ITO, WARD - 2, ELURU THE CIT(A) - CONCERNED 4. CIT , RAJAHMUNDRY 5. DR, ITAT, VISHAKHAPATNAM 6. GUARD FILE. BY ORDER SR.PS, ITAT, VISHAKHAPATNAM //TRUE COPY//