Sridhar Ramagiri, Hyderabad V. Income Tax Officer, Ward-11(2), Hyderabad

ITA 1924/Hyd/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2989 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 24-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GE E TINDERMANN
• Assessee Lawyers: K A SAI PRASAD
• Section: 143(3); 147

Judgement Text

ITA NO 1924 OF 2017 SRIDHAR RAMAGIRI HYDERABAD. PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.1924/HYD/2017 (ASSESSMENT YEAR: 2014-15) SHRI SRIDHAR RAMAGIRI HYDERABAD PAN: AT ZPR4313H VS INCOME TAX OFFICER WARD-11(2) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI K.A. SAI PRASAD FOR REVENUE : SHRI GEETINDER MANN O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2014-15 AGAIN ST THE ORDER OF THE LEARNED CIT (A)-5, HYDERABAD, DATE D 27.09.2017. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL, CARRYING ON RETAIL TRADING IN IMFL, FIL ED HIS RETURN OF INCOME FOR THE A.Y 2014-15 ON 24.11.2014 ADMITTING INCOME OF RS.9,98,180. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, THE AO OBSERVED THAT THE ASSESSEE IS NOT M AINTAINING PROPER BOOKS OF ACCOUNT AND THEREFORE, FAILED TO PR ODUCE THE SAME DATE OF HEARING: 02.05.2018 DATE OF PRONOUNCEMENT: 2 3 . 0 5 .2018 ITA NO 1924 OF 2017 SRIDHAR RAMAGIRI HYDERABAD. PAGE 2 OF 4 BEFORE HIM WHEN CALLED FOR. THEREFORE, HE PROCEEDE D TO ESTIMATE THE NET PROFIT IN RETAIL OF WINES @ 5% OF THE PURCH ASES OR STOCK PUT TO SALE DURING THE YEAR. AGGRIEVED, THE ASSESSEE PR EFERRED AN APPEAL BEFORE THE CIT (A), WHO CONFIRMED THE ORDER OF THE AO AND THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT SIMILAR ISSUE HAD COME UP FOR CONSIDERATION BEFORE THIS TRIBUNAL IN A NUMBER OF CASES PARTICULARLY IN THE CASE OF M/ S. SECUNDERABAD WINES VS. ITO IN ITA NO.181/HYD/2016 A ND THIS TRIBUNAL VIDE ORDERS DATED 20.07.2016, HAS HELD 3% OF THE COST OF GOODS PUT TO SALE, TO BE REASONABLE ESTIMATION OF I NCOME. HE PRAYED FOR SIMILAR DIRECTION IN THE CASE OF THE ASS ESSEE AS WELL. 4. THE LEARNED DR, HOWEVER, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THIS TRIBUNAL, IN THE CASE OF SECUNDERABAD WINES (SUPRA) VIDE ORDERS DATED 20.07.2016 (TO WHIC H BOTH OF US ARE SIGNATORIES) HAVE HELD 3% OF THE COST OF GOODS PUT TO SALE TO BE ITA NO 1924 OF 2017 SRIDHAR RAMAGIRI HYDERABAD. PAGE 3 OF 4 REASONABLE ESTIMATION OF INCOME. FOR THE SAKE OF CL ARITY AND READY REFERENCE, RELEVANT PARAGRAPHS ARE REPRODUCED HEREU NDER: 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-FI RM WHICH IS IN THE BUSINESS OF WHOLESALE AND RETAIL SALE OF LIQUOR , FILED ITS RETURN OF INCOME FOR THE A.Y. 2011-2012 ON 28.09.20 11 ADMITTING INCOME OF RS.52,25,566. THE ASSESSMENT PR OCEEDINGS UNDER SECTION 143(3) READ WITH SECTION 147 OF THE A CT WERE INITIATED AND DURING THE SAID ASSESSMENT PROCEEDING S AFTER VERIFICATION OF VARIOUS DETAILS FILED BY THE ASSESS EE, THE A.O. FOUND THAT THE ASSESSEE HAS OFFERED LOW GROSS PROFI T OF 11.01% AS AGAINST THE GROSS PROFIT MARGIN OF RETAIL AT 24% AS PER THE G.O.MS. ISSUED BY THE GOVERNMENT OF A.P. THE ASSESS EE SUBMITTED THAT THE GROSS PROFIT MARGIN OF 24% AS PE R G.O. OF GOVERNMENT OF A.P. IS ABSOLUTELY ON THE HIGHER SIDE . THE LD. A.R. CONTENDED THAT IN MAJORITY OF THE SIMILAR LIQU OR CASES, THE ITAT, HYDERABAD BENCH HAS BEEN TAKING THE TOTALITY OF THE FACTS INTO CONSIDERATION AND HOLDING THAT THE TOTAL INCOME OF THE ASSESSEE SHALL BE 3 TO 5% OF THE GOODS PUT TO S ALE AND THAT THE SAME HAS BEEN UPHELD BY THE HON'BLE HIGH COURT OF A.P. THE A.O. HOWEVER, OBSERVED THAT THE HON'BLE A.P. HI GH COURT IN THE CASE OF CIT VS. KAMLEKAR SHANKAR LAL IN ITTA .NO.21 OF 2013 DATED 23.07.2013 HAS ESTIMATED THE NET PROFIT AT 5% OF THE PURCHASE OR STOCK PUT TO SALE. HE THEREFORE, ES TIMATED THE INCOME AT 5% OF THE GOODS PUT TO SALE AND BROUGHT I T TO TAX. SIMILARLY, HE ALSO MADE AN ADDITION OF MISCELLANEOU S RECEIPTS OF RS.3,39,064. AGGRIEVED, ASSESSEE PREFERRED AN AP PEAL BEFORE THE CIT(A) WHO CONFIRMED THE ORDER OF THE A.O. AND THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 3. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THIS ISSUE IS COVERED IN FAVOUR OF T HE ASSESSEE BY THE DECISION OF 'A' BENCH OF THIS TRIBUNAL IN THE C ASE OF SRI VENKATESWARA WINES IN ITA.NO.1206/HYD/2015 DATED 27.11.2015 FOR THE A.Y. 2011-2012 WHEREIN AFTER TAK ING INTO CONSIDERATION SIMILAR CIRCUMSTANCES THE TRIBUNAL HA S UPHELD THE ESTIMATION OF INCOME AT 3% OF THE COST OF THE G OODS SOLD. RESPECTFULLY FOLLOWING THE SAME, TO WHICH BOTH OF U S ARE SIGNATORIES, WE DIRECT THE A.O. TO ADOPT 3% OF THE COST OF GOODS SOLD AS THE INCOME OF THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE DID NOT ARGUE GROUND NOS. 4 AND 5 AND THER EFORE, THE SAME ARE REJECTED AS NOT PRESSED . ITA NO 1924 OF 2017 SRIDHAR RAMAGIRI HYDERABAD. PAGE 4 OF 4 6. RESPECTFULLY FOLLOWING THE SAME, WE DIRECT THE A O TO CONSIDER 3% OF THE GOODS PUT TO SALE AS THE INCOME OF THE ASSESSEE FOR THE RELEVANT A.Y. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD MAY, 2018. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 23 RD MAY 2018. VINODAN/SPS COPY TO: 1 C/O CH. PARTHASARATHY & CO. 1-1-298/2/B/3, 1 ST FLOOR, SOWBHAGYA AVENUE, STREET NO.1 ASHOKNAGAR, HYDERABAD 500020 2 ITO WARD 11(2) D BLOCK, IT TOWERS, AC GUARDS, HYDER ABAD 3 CIT (A)-5 HYDERABAD 4 PR. CIT 5 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER