Vijjapu Ranga Prasad, Vizianagaram V. ITO, Ward -1, Vizianagaram

ITA 357/VIZ/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6705 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 15-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R S ARAVINDAKSHAM

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 357 / VIZ /201 7 (ASST. YEAR : 20 1 0 - 11 ) VIJJAPU RAGHU PRASAD, PROP. PRIYA RESTAURANT & BAR , MUNICIPAL SHOPPING COMPLEX, VIZIANAGARAM. V . IT O , WARD - 1, VIZIANAGARAM. PAN NO. ACZPV 5447 M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SHRI R.S. ARAVINDAKSHAM SR. DR DATE OF HEARING : 12 / 0 9 /201 7 . DATE OF PRONOUNCEMENT : 15 / 0 9 /201 7 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 , VISAKHAPATNAM , DATED 28 /0 4 /201 7 FOR THE ASSESSMENT YEAR 20 1 0 - 11 . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS ENGAGED IN LIQUOR BUSINESS IN THE NAME OF PRIYA RESTAURANT & BAR , FILED HIS RETURN OF INCOME BY ADMITTING TOTAL INCOME OF 4,17,260/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND ASSESSMENT IS COMPLETED BY DETERMINING TOTAL INCOME AT 32,84,550/ - . THE ASSESSING OFFICER HAS ESTIMATED THE INCOME AT 20 % OF STOCK PUT TO USE. 2 ITA NO. 357 /VIZ/2017 ( VIJJAPU RAGHU PRASAD ) 3 . ON APPEAL, LD. CIT(A) SCALED DOWN THE ESTIMATION MADE BY THE ASSESSING OFFICER FROM 20% TO 15% BY OBSERVING THAT THE ASSESSEE IS RUNNING BAR & RESTAURANT, IN WHICH THE ELEMENT OF PROFIT WOULD BE MUCH HIGHER. THE HON'BLE ITAT , HYD ERABAD IN THE CASE OF ITO VS. MALLIKHARJUNA BAR & RESTAURANT (ITA NO. 186/HYD/2012, DATED 17/05/2012) HELD THAT THE ESTIMATION OF INCOME IN THE CASE OF BAR & RESTAURANT AT 10% OF PURCHASE OR STOCK PUT TO SALE SUBJECT TO THE ASSESSED INCOME IS NOT LESS THAN THE RETURNED INCOME WOULD BE REASONABLE. IN THE LIGHT OF THE ABOVE DISCUSSION AND UPON CONSIDERATION OF ALL THE FACTS, THE LD. CIT(A) ESTIMATED THE INCOME OF THE ASSESSEE AT 15% OF PURCHASE PRICE. 4 . ON APPEAL BEFORE US, IT IS SUBMITTED THAT THE LD. CIT( A) HAVING FOLLOWED THE ORDER OF THE ITAT, HYDERABAD BENCH IN THE CASE OF MALLIKHARJUNA BAR & RESTAURANT (SUPRA) ESTIMAT ED THE INCOME AT 15% IS NOT CORRECT AND SUBMITTED THAT ESTIMATION MAY BE MADE AT 10% OF PURCHASE PRICE. 5. ON THE OTHER HAND , DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 6 . WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDERS OF THE AUTHORITIES BELOW. 7 . THE ONLY ISSUE FOR CONSIDERATION IS THE ESTIMATION OF IN COME OF THE ASSESSEE. IN THIS CASE, THE ASSESSEE IS RUNNING A BAR & RESTAURANT, FILED HIS RETURN OF INCOME BY ADMITTING TOTAL INCOME OF 4,17,260/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND ASSESSMENT IS 3 ITA NO. 357 /VIZ/2017 ( VIJJAPU RAGHU PRASAD ) COMPLETED BY DETERMINING TOTAL INCOME AT 32,84,550/ - . ACCORDINGLY, THE ASSESSING OFFICER ESTIMATED THE INCOME OF THE ASSESSEE AT 20% OF STOCK PUT TO SALE. ON APPEAL, LD. CIT(A) BY CONSIDERING THE DECISION OF THE ITAT, HYDERABAD BENCH IN THE CASE OF MAL LIKHARJUNA BAR & RESTAURANT (SUPRA) , SCALED DOWN THE ESTIMATION FROM 20% TO 15% OF PURCHASE PRICE. WE FIND THAT LD. CIT(A) HAVING CONSIDERED THE DECISION OF THE ITAT , HYDERABAD B ENCH IN THE CASE OF MALLIKHARJUNA BAR & RESTAURANT (SUPRA) WHEREIN ESTIMATED THE INCOME OF THE ASSESSEE AT 10% OF PURCHASE OR ST O CK PUT TO SALE. WE FIND THAT THE LD. CIT(A) HA S NOT GIVEN ANY REASON WHY THE ESTIMATION MADE BY THE ITAT, HYDERABAD BENCH IS NOT CORRECT. THEREFORE, BY CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CAS E AND ALSO BY CONSIDERING THE DECISION OF THE ITAT, HYDERABAD BENCH IN THE CASE OF MALLIKHARJUNA BAR & RESTAURANT (SUPRA), WE ARE OF THE OPINION THAT THE ESTIMATION OF INCOME MADE BY THE LD. CIT(A) IS SCALED DOWN TO 10% OF PURCHASE PRICE. 8 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON TH IS 1 5 T H DAY OF SEP . , 201 7 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 1 5 T H SEPTEMBER , 201 7 . VR/ - 4 ITA NO. 357 /VIZ/2017 ( VIJJAPU RAGHU PRASAD ) COPY TO: 1. THE ASSESSEE - VIJJAPU RAGHU PRASAD, PROP. PRIYA RESTAURANT & BAR, MUNICIPAL SHOPPING COMPLEX, VIZIANAGARAM. 2. THE REVENUE - ITO, WARD - 1, VIZIANAGARAM. 3. THE PCIT - 1, VISAKHAPATNAM. 4. THE CIT(A) - 1, VISAKHAPATNAM. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.