Assistant Commissioner of Income Tax- 2(1), Ujjain, Ujjain V. Shri Jaswinder Singh Oberai, Indore

ITA 490/Ind/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5681 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-05-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-04-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 06-07-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Assessee Lawyers: S S DESH
• Keywords: Rejection of books of accounts; Business income; Corroborative evidences; Set aside
• Section: 143(3); 142(1); 145

Judgement Text

GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HON'BLE KUL BHARAT, JUDICIAL MEMBER AND HON'BLE MANISH BORAD, ACCOUNTANT MEMBER ITA NO.489/IND/2017 ASSESSMENT YEAR 2013-14 REVENUE BY SMT. ASHIMA GUPTA, CIT ASSESSEE BY S HRI S.S. DESHPANDE, CA DATE OF HEARING 1 5 .04 . 201 9 DATE OF PRON OUNCEMENT 14 .0 5 . 201 9 O R D E R PER MANISH BORAD, AM. THE ABOVE CAPTIONED APPEALS RELATING TO TWO DIFFERE NT ASSESSEES PERTAINING TO ASSESSMENT YEAR 2013-14 ARE FILED AT THE INSTANCE OF REVENUE AND ARE DIRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF DE PUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1), UJJAIN VS. SMT. GURUCHARAN KAUR OBEROI, 279,AG, SCHEME NO.74, VIJAY NAGAR, INDORE ( REVENUE ) (RESPONDENT ) PAN A A IPO5785C ITA NO.490/IND/2017 ASSESSMENT YEAR 2013-14 ASSISTANT COMMISSIONER OF INCOME TAX-2(1), UJJAIN VS. SHRI JASWINDER SINGH OBEROI, 279,AG, SCHEME NO.74, VIJAY NAGAR, INDORE ( REVENUE ) (RESPONDENT ) PAN AAIPO 7177J GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 2 INCOME TAX (APPEALS) (IN SHORT LD.CIT(A)], UJJAIN DATED 28.04.2017 AND 25.04.2017 WHICH ARE ARISING OUT OF THE ORDER U/S 143(3) OF THE INCOME TAX ACT 1961(IN SHORT THE ACT) DATED 31.03.2016 A ND 18.03.2016 RESPECTIVELY FRAMED BY DCIT-RATLAM. 2. REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL NO. ITA NO.489/IND/2017 IN THE CASE OF SMT. GURUCHARAN KAUR OBEROI (1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, LD.CIT (A) WAS JUSTIFIED IN NOT UPHOLDING THE REJECTION OF BOOKS O F ACCOUNTS IN SPITE OF SPECIFIC DEFECTS POINTED OUT IN THE ASSESSMENT ORDER AND DEL ETING THE ADDITION OF RS.3,09,63,422/-. (2) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, LD.CIT (A) WAS JUSTIFIED IN RESTRICTING THE ADDITION OF RS.3,09,95 ,390/- MADE ON ACCOUNT OF SUPPRESSION OF SALE TO RS.31,968/- ALLOWING RELIEF OF RS.3,09,63,422/- WITHOUT TAKING INTO CONSIDERATION THAT SUPPRESSION OF SALES HAS BEEN LOGICALLY DERIVED BY AO BY TAKING INTO CONSIDERATION THE DUTIES ON PURCH ASES AND OTHER FACTORS AS MENTIONED IN ASSESSMENT ORDER. (3) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, LD.CIT (A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.13,97,442/ - MADE ON ACCOUNT OF UNDERVALUATION OF CLOSING STOCK WITHOUT APPRECIATIN G THE FACT THAT HUGE BREAKAGE OF BOTTLES IS NOT POSSIBLE AS THE ASSESSEE HAS MAIN LY PURCHASED GOODS IN PLASTIC BOTTLES AND AS SUCH THERE CANNOT BE BREAKAGE OF SUC H A LARGE NUMBER OF BOTTLES AND NO SUPPORTING EVIDENCE GIVEN BY THE ASSESSEE FO R THE CLAIM. GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 3 THE APPELLANT RESERVES HIS RIGHT TO ADD, AMEND OR A LTER THE GROUNDS OF APPEAL ON OR BEFORE THE DATE; THE APPEAL IS FINALLY HEARD FOR DISPOSAL. ITA NO.490/IND/2017IN THE CASE OF SHRI JASWINDER SI NGH OBEROI 1.WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD.CIT(A) WAS JUSTIFIED IN NOT UPHOLDING THE REJECTION OF BOO KS OF ACCOUNTS INSPITE OF SPECIFIC DEFECTS POINTED OUT IN THE ASSESSMENT O RDER AND DELETING THE ADDITION OF RS.6,16,66,374/- 2.WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD.CIT(A) WAS JUSTIFIED IN DELETING IN DELETING THE ADDITION OF RS.6,16,66,374/- MADE ON ACCOUNT OF SUPPRESSION OF SALE WITHOUT TAKI NG INTO CONSIDERATION THAT SUPPRESSION OF SALES HAS BEEN LO GICALLY DERIVED BY AO BY TAKING INTO CONSIDERATION VARIOUS FACTORS AS MENTIONED IN ASSESSMENT ORDER. 3.WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RA.12,85, 423/ - MADE ON ACCOUNT OF UNDERVALUATION OF CLOSING STOCK WITHOUT APPRECIATING THE FACT THAT HUGE BREAKAGE OF BOTTLES IS NOT POSSIBLE AS TH E ASSESSEE HAD MAINLY PURCHASED GOODS IN PLASTIC BOTTLES AND AS SU CH THERE CANNOT BE BREAKAGE OF SUCH A LARGE NUMBER OF BOTTLES AND NO S UPPORTING EVIDENCE GIVEN BY THE ASSESSEE FOR THE CLAIM MADE. 3. IN THE APPEALS REVENUE HAS DISPUTED FOLLOWING TWO I SSUES ; GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 4 (A) ADDITION FOR SUPPRESSION OF SALES S.NO. NAME OF THE ASSESSEE APPEAL NO. AMOUNT 1 SMT. GURUCHARAN KAUR OBEROI 489/IND/17 RS.3,09,63,422 2 SHRI JASWINDER SINGH OBEROI 490/IND/2017 RS.6,16,66,374 (B) UNDER VALUATION OF CLOSING STOCK S.NO . NAME OF THE ASSESSEE APPEAL NO. AMOUNT 1 SMT. GURUCHARAN KAUR OBEROI 489/IND/17 RS.13,97,442 2 SHRI JASWINDER SINGH OBEROI 490/IND/2017 RS.12,85,423 4. AS THE ISSUES RAISED IN THESE APPEALS ARE COMMON, THEREFORE THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY T HIS COMMON ORDER FOR SAKE OF CONVENIENCE AND BREVITY. AS BOTH THE PARTIE S HAVE ACCEPTED THAT THE ISSUES AND FACTS RAISED IN THESE TWO APPEALS AR E SAME, THEREFORE IN ORDER TO ADJUDICATE THE COMMON ISSUE, WE WILL TAKE UP THE FACTS OF SMT. GURUCHARAN KAUR OBEROI (ITA NO.489/IND/17). GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 5 5. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE REC ORDS ARE THAT ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM SALE AND PURCHASE OF LIQUOR. ASSESSEE FILED HER E-RETURN OF INCOME DECL ARING INCOME OF RS.38,94,610/- ON 01.10.2013. CASE SELECTED FOR SC RUTINY AND NOTICE U/S 143(2) AND 142(1) WERE DULY SERVED. DURING THE COUR SE OF ASSESSMENT LD. A.O OBSERVED THAT THE ASSESSEE HAS DISCLOSED THE NE T PROFIT @ 3.4% OF THE TOTAL TURNOVER AS AGAINST 3.17% SHOWN IN THE IMMEDI ATELY PRECEDING ASSESSMENT YEAR. ON EXAMINING THE BOOKS OF ACCOUNT S AS WELL AS THE DOCUMENTS PLACED BEFORE HIM HE NOTICED THAT VARIOUS PURCHASES AND SALE BILLS WERE NOT PRODUCED, NO REGULAR SALE BILLS ARE ISSUED WHICH MAKES THE VERIFICATION OF SALE DIFFICULT. IN ABSENCE OF SALE BILLS LD. A.O TOOK THE BASIS OF MSP (MAXIMUM SALE PRICE) AND MRP (MAXIMUM RETAIL PRICE) MENTIONED ON THE LABEL OF BOTTLES TO COMPUTE THE SALES. QUAN TITY OF LIQUOR WAS TAKEN FROM THE DOCUMENT OF EXCISE DEPARTMENT SHOWING THE GOODS PURCHASED BY THE ASSESSEE. LD. A.O ALSO OBSERVED CERTAIN ANO MALIES RELATING TO ENTRY OF PURCHASE IN THE BOOKS OF ACCOUNTS AND HE ALSO CH ALLENGED THE VALUATION OF CLOSING STOCK BEING MADE INCORRECTLY. HE ACCORDI NGLY ON THE BASIS OF FOLLOWING OBSERVATIONS REJECTED THE BOOKS OF ACCOUN TS AND APPLIED PROVISIONS OF SECTION 145(3) OF THE ACT:- GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 6 1. THE ASSESSEE HAS NOT MAINTAINED SALE BILLS AND IN A BSENCE OF SALE BILLS CORRECT SALES ARE NOT VERIFIABLE. 2. THE SALES DECLARED BY THE ASSESSEE FOUND UNDERVA LUED DUE TO ASSESSEE APPLIED THE RATE BELOW THAN MSP WHEREAS AS PER GOVT. NORMS THE LIQUOR CANNOT BE SOLD BELOW THE RATE OF M SP. ON VIEW OF ABOVE IT IS PROVED THAT THE SALES ARE NOT CORRECTLY DECLARED. 3. IN THE BOOKS OF ACCOUNTS PURCHASE PRICE IS ENTER ED BUT QUANTITY OF PURCHASE IS NOT ENTERED RESULTING SUPPRESSION OF SA LES. 4. THE STOCK HAS BEEN UNDERVALUED AS SUCH THE BOOKS DO NOT DECLARE CORRECT PROFIT. 6. LD. A.O PROCEEDED AHEAD TO COMPUTE THE SUPPRESSED S ALES IN THE FOLLOWING MANNER; PARTICULARS SALES AS SALES AS DECLARED BY ASSESSEE IN BOOKS SUPPRESSED DETERMINED ABOVE SALES SALE OF PLAIN COUNTRY 51525169 40525669 10999500 LIQUOR SALE OF PLAIN COUNTRY 10008520 6910615 3097905 LIQUOR GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 7 SALE OF IMFL SPRIT 51959731 35061746 16897985 TOTAL SALES SUPPRESSION OF SALES 30995390 7. AS REGARDS VALUATION OF CLOSING STOCK LD. A.O REJ ECTED THE ASSESSEES CLAIM OF THE DAMAGED STOCK BEING PART OF THE CLOSIN G STOCK AND MADE THE ADDITION OF RS.13,97,442/- TOWARDS UNDER VALUATION OF CLOSING STOCK OBSERVING AS FOLLOWS; TYPE OF LIQUOR BOXES M RATE ADOPTED | VALUE OF STOCK BY ASSESSEE CLOSING STOCK SPRIT 174 2800 4,87,200 BEER 149 1000 1,49,000 TOTAL STOCK OF COUNTRY LIQUOR 6,36,200 THE TOTAL VALUATION OF THE CLOSING STOCK IS WORKED OUT AT RS. 19,23,761/(6,36,200+12,87,561), WHILE THE ASSESSEE HAS SHOWN VALUATION OF RS. 5,26,319/ ONLY. AS SUCH THE DIFFERENCE OF RS, 13,97,442/- (1923761- 526319) IS ADDED TO THE INCOME OF THE ASSESSEE. 8. ACCORDINGLY INCOME ASSESSED AT RS.3,63,83,850/- AFT ER MAKING ADDITION FOR SUPPRESSED SALES AT RS.3,09,95,390/-, ADDITION FOR UNDER GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 8 VALUED CLOSING STOCK AT RS.13,97,442/- AND ADDITION FOR EXCESS PURCHASE OF RS.96,405/-. 9. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) AND PARTLY SUCCEEDED. 10. NOW REVENUE IS IN APPEAL BEFORE THE TRIBUNAL CHALL ENGING THE ADDITION FOR SUPPRESSED SALES OF RS.3,09,63,442/- A ND FOR DELETION OF ADDITION OF UNDER VALUATION OF CLOSING STOCK AT RS .13,97,442/-. 11. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUE D AND SUPPORTED THE ORDERS OF LD. ASSESSING OFFICER. 12. PER CONTRA LD. COUNSEL FOR THE ASSESSEE SUPPORTI NG THE ORDERS OF LD. CIT(A) ALSO MADE FOLLOWING WRITTEN SUBMISSIONS COMM ONLY FOR BOTH THE ASSESSEES. 1. THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FR OM SALE AND PURCHASE OF LIQUOR. THE RETURN OF INCOME HAS BEEN FILED DECL ARING THE INCOME OF RS.38,94,6101-. THE ACCOUNTS ARE AUDITED AND THE TA R IS FILED. THE TOTAL SALES DURING THE YEAR HAS BEEN SHOWN AT RS.23.62 CR ORES WITH A GROSS PROFIT OF RS.2.17 CRORES WHICH COMES TO 9.220/0 AND THE NET PROFIT IS GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 9 SHOWN AT 3.9. 1. THE DETAILED PROCEDURE OF THE BUSINESS IS ENUMER ATED HEREUNDER: A. THE TENDERS ARE FLOATED FOR THE GROUP SHOPS WHIC H ARE ALLOTTED TO THE HIGHEST BIDDER. THE TENDERS ARE ALSO RENEWED WITH A N INCREASE OF 15 EVERY YEAR. B. THE SHOPS OF FOREIGN LIQUOR AND COUNTRY LIQUOR A RE GROUPED SEPARATELY AND THE AMOUNTS PAYABLE ARE DETERMINED AS PER THE A LLOTMENT OF GROUP SHOPS. C. AFTER GETTING THE TENDER OR THE RENEWAL OF THE L ICENCE (A) 10 OF THE AMOUNT IS DEPOSITED AS THE INITIAL A MOUNT FOR THE 0.:: OF THE SHOP (DHAROHAR RASHI). (B) 90 OF THE BALANCE AMOUNT IS DIVIDED INTO 24 PAR TS AND IS PAYABLE EVERY FORTNIGHTLY. (C) 45 I.E. HALF THE AMOUNT IS PAID AS BASIC LICENSE FEES WHICH IS FIXED AGAINST WHICH THE GOODS ARE NOT DELIVERED. (D) 45 I.E. HALF THE AMOUNT IS PAID AS LICENSE FEES AGAINST THE SUPPLY OF GOODS. THIS AMOUNT IS PAYABLE IRRESPECTIVE OF THE F ACT WHETHER THE GOODS GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 10 ARE PURCHASED OR NOT. (E) FOR THE AMOUNT OF 90 OF THE TENDER PRICE A BANK GUARANTEE OF 12 IS REQUIRED TO BE GIVEN IMMEDIATELY ON ACCEPTANCE/RENE WAL OF TENDER. (F) IF THE BASIC LICENSE FEES OR THE NORMAL LICENSE FEE S IS NOT PAID WITHIN A STIPULATED FORTNIGHTLY PERIOD THEN AFTER THE EXPIRY OF THREE DAYS THE SHOP WOULD BE CLOSED/SEALED. THEREAFTER, THERE WOULD BE A RE-AUCTION FOR THAT AREA. IF THE NEW TENDER IS AUCTIONED AT A LESSER VA LUE THE DIFFERENCE IS RECOVERED FROM THE BANK GUARANTEE GIVEN. (G) GOODS REQUIRED ARE DELIVERED AGAINST THE PAYMEN T THROUGH BANK. A DELIVERY CHALLAN IS GIVEN ON PRODUCTION OF THE PROO F OF PAYMENT AND THE GOODS ARE SUPPLIED FROM THE WAREHOUSE AS PER REQUIR EMENT. THE ASSESSEE IS REQUIRED TO PAY FOR THE GOODS PURCHASED AT A FIX ED RATE. (H) ON DELIVERY OF THE GOODS, 8 IS PAID AS TRANSPOR T FEES. (I) THE DUTY PAYABLE FOR BASIC LICENSE FEES AND THE LIC ENSE FEES IS DIVIDED AS: 30 FOR APRIL, MAY, JUNE; 20 FOR JULY, AUGUST, S EPTEMBER AND 25 FOR NEXT TWO QUARTERS. GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 11 3. DURING THE COURSE OF THE ASSESSMENT THE ASSESSEE FILED COMPLETE MON O - WISE DETAILS OF PURCHASES AND SALES (ATTACHED WITH THE ASSESSMENT ORDER AS ANNEXURE-A). THE PURCHASES ARE ALL VERIFIABLE SI NCE THEY ARE ALL MADE FROM THE GOVT. AGENCIES AFTER PAYMENT THROUGH BANK. THE NECESSARY TAX IS COLLECTED BY THE GOVERNMENT SUPPLY AGENCIES. FOR SA LES THE SALE BILLS ARE NOT MAINTAINED SINCE IT IS NOT POSSIBLE TO ISSUE TH E SALE BILLS IN THE RUSH HOURS. THIS FACT IS IN EXISTENCE FOR ALL THE DEALER S. THE MRP AND MSP ARE PRINTED ON THE BOTTLES. THE SALE RATE IS FIXED AS PER THE MARKET CONDITION AND THE MARRIAGE SEASON. THE PRICES ARE N ORMALLY LESSER IN THE RAINY SEASON AND AT THE TIME OF HARVESTING. IN THE VILLAG E AREA WHEN THE STOCKS ARE PILED UP THE SAME IS REQUIRED TO BE CLEARED BY SELLING THE LIQUOR BELOW THE MSP PRICE, SINCE THE BASIC LICENSE FEES AND NORMAL LICENSE FEES IS REQUIRED TO BE PAID IRRESPECTIVE OF THE FACT WHETHER THE ASSESSEE MAKES PURCHASES OR NOT. UNDER THESE CIRCUM STANCES THE ASSESSEE IS REQUIRED TO CLEAR THE STOCKS AT THE LES SER PRICE TO AVOID THE LOSS OF 100. THUS, THE ASSESSEE IS FORCED TO CLEAR-UP THE STOCKS BY SELLING THE SAME BELOW THE MSP PRICE. IF THE SALES ARE MADE BELOW THE MSP PRICE THEN THE GOVERNMENT HAS RIGHT TO LEVY THE FINE AND EVEN TO CLOSE DOWN THE SHOP. GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 12 4. WHILE FRAMING THE ASSESSMENT THE LD. A.O. CALCUL ATED THE SALE PRICE AND APPLIED THE SALE RATE FOR THE MONTH OF APRIL, M AY AND JUNE WHICH FETCHES A BETTER PRICE BECAUSE OF MARRIAGE SEASON A ND HARVESTING OF CROP. THE ID. A.O. APPLIED THE THUMB RULE ON THE ASSUMPTI ON THAT THE ASSESSEE HAS SOLD THE GOODS AT 15 ABOVE THE MSP AND MADE THE ADDITION OF RS. 1,15,53,323/_ FOR FOREIGN LIQUOR. SIMILARLY, HE HAS CALCULATED THE SALE OF COUNTRY LIQUOR BY ADOPTING 15 OF MSP AND MADE THE A DDITION OF 3,03,91,278/-. FOR IMFL SPIRIT HE HAS ADOPTED THE SALE RATE AT 15% ABOVE MSP AND MADE THE ADDITION OF RS.1 ,92,21,773/-. THUS, THE TOTAL ADDITION IS MADE AT RS.6,16,66,374/-. THE LD. A.O. FURTHER DISALLOWED THE BREAKAGES AND S HORTAGES CLAIMED BY THE ASSESSEE AT RS.12,85,423/- ON THE GROUND THAT THESE SHORTAGES ARE NOT MENTIONED IN THE AUDIT REPORT. THIS ADDITION HA S BEEN MADE FOR UNDERVALUATION OF STOCK ASSUMING THE FULL QUANTITY OF STOCK IS AVAILABLE WITH THE ASSESSEE. 5. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND AFTER DISCUSSING THE TRADE PRACTICE OF SELLING THE GOODS BELOW THE MSP OBSERVED THAT MANY SHOPS ARE SELLING THE GOODS BELO W THE MSP PRICE AND AGAINST THE ACTION BE THE DEPARTMENT THE PENALTIES HAVE BEEN LEVIED OF GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 13 RS.10,000/-. IT IS SUBMITTED THAT SUCH AN INFORMATION WAS OBTAIN ED UNDER THE R TI ACT AND THE COPIES OF THE ORDERS ARE PLACED IN THE PAPER BOOK FROM PGS.27-47. IT WAS THE BUSINESS EXPEDIENCY TO PAY THE PENALTY OF RS.10,000/- RATHER THAN INCURRING THE LOSS OF 100 BY WAY OF BAS IC LICENSE FEES. THE ORDER IN THE CASE OF M/S. MAXIMA TRADERS IS ENCLOSED AT PG.27 AND THE ORDER IN THE CASE OF MILLENIUM TRADERS IS E NCLOSED AT PG.34. THE LD. CIT(A) FURTHER IN PARA 4.1 HAS OBSERVED THAT TH E A.O. HAS NOT POINTED OUT ANY SPECIFIC DEFECT IN THE BOOKS OF ACCOUNTS AN D HAS FAILED TO POINT OUT ANY DISCREPANCY IN THE QUANTITATIVE DETAILS OF SALE AND PURCHASES. HE FURTHER CONSIDERED THE VARIOUS CASES OF THE HON'BLE TRIBUNAL WHEREIN THE NP RATE OF 1.5 WAS ADOPTED. IN THE SIMILAR TYPE OF CASES THE RATE WAS ADOPTED BY THE LD. CIT(A) AT 3.5. THE ASSESSEE HAS SHOWN A BETTER PROFIT, AS SUCH THE LD. CIT(A) DELETED THE ADDITION OF RS.6,16,66,374/-. REGARDING THE ADDITION OF VALUATION IN STOCK, THE LD. CIT(A) OBSERVED THAT THE BREAKAGE AND SHORTAGE IS 0.54 WHICH IS QUITE REASON ABLE AND HE THEREFORE DELETED THE ADDITION. 6. IT IS HUMBLY SUBMITTED THAT IN THIS TRADE OF DEA LING IN LIQUOR THE ASSESSEE IS REQUIRED TO PAY THE FIXED AMOUNT TO THE GOVERNMENT BY WAY OF LICENSE FEES. WHETHER THE SALES ARE EFFECTED OR NOT THE MINIMUM PAYMENT GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 14 IS REQUIRED TO BE MADE ON A STIPULATED DATE. IN THE MOFUSSIL /VILLAGES THE QUANTITY OF THE LIQUOR IS NOT EASILY SALEABLE. THE ASSESSEE IS REQUIRED TO PAY THE MINIMUM TENDER PRICE IRRESPECTIVE OF THE FA CT WHETHER THE SALES ARE EFFECTED OR NOT. TO MINIMIZE THE LOSS THE ASSES SEE IS REQUIRED TO SELL THE GOODS BELOW THE MSP AND CLEAR THE STOCK. THIS P RACTICE IS BEING ADOPTED IN THIS TRADE BY MANY TRADERS. THE ASSESSEE HAS FILED INSTANCES OF SALE OF GOODS BELOW THE MSP AND LEVY OF PENALTY BY THE AUTHORITIES. THIS HON'BLE TRIBUNAL IN NUMBER OF CASES HAS ADOPTED THE NET PROFIT RATE AT 1.77 AND RECENTLY HAS ADOPTED THE NET PROFIT RATE A T 3.5. THE ASSESSEE HAS SHOWN PRACTICALLY THE SAME RATE. IN THE EARLIER YEA RS NO ADDITIONS WERE MADE ON ACCOUNT OF THE NP RATE. IN VIEW OF THIS, IT IS HUMBLY SUBMITTED THAT THE ORDER OF THE LD. CIT(A) MAY PLEASE BE MAIN TAINED AND THE ADDITIONS DELETED BY THE ID. CIT(A) MAY PLEASE BE A PPROVED. 13. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. REVENUE HAS RAISED TWO COMMON GROUNDS F IRSTLY CHALLENGING THE DELETION AND ADDITION OF SUPPRESSED SALES AND S ECONDLY FOR DELETING THE ADDITION OF UNDERVALUATION CLOSING STOCK. 14. WE WILL FIRST TAKE UP GROUND NO, 1 & 2 OF THE REVE NUE WHEREIN THE REVENUE HAS CHALLENGED THE FINDING OF LD. CIT(A) NO T UPHOLDING THE GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 15 REJECTION OF BOOKS OF ACCOUNTS AND DELETING THE ADD ITION FOR SUPPRESSED SALES OF RS.3,09,63,442/-. 15. LD. CIT(A) DELETED THE ADDITION FOR SUPPRESSED SAL E OF RS. 3,09,63,442/- OBSERVING AS FOLLOWS; 4.1 GROUND NO.1: THROUGH THIS GROUND OF APPEAL THE APPELLANT HAS CH ALLENGED THE ADDITION OF RS.3,09,95,390/- ON ACCOUNT OF SUPP RESSION OF SALE. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND REASONS BROUGHT OU T BY THE AO. THE AO HAS STATED THAT THE APPELLANT HAS MADE THE SALE OF LIQU OR BELOW THE M1L11MUM SALE PRICE ON PRESUMPTIVE BASIS PARTICULARLY WHEN THE BO OKS OF ACCOUNT ARE DULY MAINTAINED AND AUDITED BY THE AUDITOR U/S 44AB. MOR EOVER, THE AO HAS NOT POINTED OUT ANY SPECIFIC DEFECTS IN THE BOOKS OF AC COUNTS. THE AO FAILED TO POINT OUT ANY DISCREPANCY IN QUANTITATIVE DETAILS OF SALE AND PURCHASES. THE A 0 HAS S IMPLY REJECTED THE BOOKS OF ACCOUNTS U/S 145 OF THE I.T. ACT WITHOUT POINTING OUT ANY SPECIFIC DEFECTS. THE AO'S ACTION OF ARRIVING S UPPRESSION OF SALE AT RS.3,09,95,39/- AFTER REJECTING BOOKS OF ACCOUNT WI THOUT ANY BASIS IS NOT JUSTIFIABLE. 4.1.1 THE APPELLANT'S CASE WAS NOT COMPARABLE WITH OTHER CASE PARTICULARLY FOR THE REASON THAT DIFFERENT SHOPS ARE HAVING DIFFEREN T TURNOVER, DIFFERENT LOCATION AND SEALING BARDANA. THEREFORE, IN MY OPINION THE E STIMATION OF TURNOVER IS NOT JUSTIFIED. FURTHER, WHI1E APPLYING THE MINIMUM SAL E PRICE, THE AO HAS NOT TAKEN INTO ACCOUNT THE OTHER COMPARABLE CASES. IT IS TO B E MENTIONED HERE THAT IN THE CASES OF NAMAN TRADERS AND NAVIN TRADERS, IN THE A Y.2009-10, THE DEPARTMENT HAD ESTIMATED THE NET PROFI T 0 F 5% AS AGAINST 3.76% AND 3.1 5% RESPECTIVELY SHOWN BY THESE PARTIES. THE FACTS OF THE CASE OF TH ESE PARTIES ARE NOT KNOWN. MOREOVER, FROM PERUSAL OF THE ASSESSMENT ORDER, IT TRANSPIRES THAT THE AO HAS NOT CONL1'ONTED SIMILAR TYPE OF CASES TO THE APPELLANT DURING THE COURSE OF ASSESSMENT GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 16 PROCEEDINGS. 4. I .2 FURTHER, THE APPELLANT DURING THE COURSE OF APPEAL PROCEEDINGS, THROUGH A WRITTEN SUBMISSION HAS BROUGHT TO MY NOTICE THAT, THE DEPARTMENT, IN T HE ASSESSMENT YEAR 2006-07, HAD ACCEPTED THE NET PROFIT OF 1.94% TO 1.80% IN MOST OF THE CASES. IT HAS ALSO BEEN CONTENDED THAT THE RESULTS OF ASSESSMENT YEAR 2005-06 SHOULD NOT HAVE BEEN COMPARED WITH THE RESULTS OF OTHER ASSESSMENT YEARS IN THE CASE OF APPELLANT. THE CONTENTION OF THE APPELLANT HAS MERIT. THEREFORE, PRIMA-FACIE THESE ARE NOT COMPARABLE CASES PARTICULARLY WHEN TH E ESTIMATED RATES HAVE BEEN APPLIED BY THE DEPARTMENT. IN VIEW OF ABO VE DISCUSSION, IT IS OBSERVED THAT IF THE NET PROFIT ARRIVED BY THE AO IS CONSIDERED THEN THE RATE OF NET PROFIT COMES @ 25% WHICH IS HIGHLY UNLIKELY IN SUCH TYPE OF BUSINESS KEEPING IN VIEW THE HUGE TURNOVER. THE APPELLANT HAS DISCLOSED THE TOTAL NP @ 4.2% IN THE A. Y.20 11-12. 4.1.3 THE AMOUNT OF NET PROFIT RATE I.E. 3.5% HAS BEEN ADOPTED BY CIT(A), UJJAIN WHILE DECIDING THE APPEAL OF SHRI RAJENDRA RAMAVTAR JAISW AL IN APPEAL NO. U-298/2012-13 FOR THE A. Y. 20 10-11. THEREFORE, THE APPELLANT HAS DISCLOSED SLIGHTLY LESS PROFIT RATE IN COMPARISON TO THE ABOVE CITED CASE. THE APPELLANT FURNISHED THE QUANT ITATIVE DETAILS OF SALES AND PURCHASE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND NO DEFECTS HAVE BEEN POINTED OUT BY THE AO. BY MERELY NON-ISSUANCE OF SALES BILLS IT CANNOT BE PRESUMED THAT THE APPELLANT HAS SUPPRESSED THE SALES. MOST O F THE TIME LIQUOR VENDORS INDULGING IN THE SALE OF LIQUOR BELOW MINIMUM SALE PRICE (MSP). IT IS A COMMON PRACTICE TO SALE THE LIQUOR BELOW MSP BECAUSE OF THE COMPETITION IN THE MARKET. IN MOST OF THE CASES THE EXCISE DEPARTMENT HAS IMPOSED THE PENALTY FOR INDULGING IN THE SALE OF LIQUOR BELOW MSP. ALTHOUGH THE PROHIBITION OF SALE BELOW MSP AND ABOVE MRP AS PER THE LICENSING CONDITION MAY BE TRUE BUT THE FACT THAT LIQUOR CONTRACTORS IN THE STATE S ELL THE LIQUOR EVEN BELOW THE MSP IS ALSO EQUALLY TRUE AND IS A MATTER OF FACT. IN FACT THE S ALE OF LIQUOR BELOW MSP, IF NOTICED BY THE STATE EXCISE AUTHORITIES IS MERELY AN IRREGU LARITY AND IN SUCH CASE, THE LICENSE OF THE CONCERNED CONTRACTOR IS LIABLE TO BE SUSPENDED MINIMUM FOR A PERIOD OF 3 DAYS AND MAXIMUM FOR ONE WEEK AND IN CASE OF V IOLATION FOR MORE THAN ONCE, THE LICENSE FOR REMAINING PERIOD OF YEAR CAN BE CAN CELLED. THE LIQUOR CONTRACTORS UNDER THE CONDITIONS OF LICENSE ARE REQUIRED TO PUR CHASE MINIMUM GUARANTEED GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 17 QUANTITY OF LIQUOR WHICH IS THE BASIS FOR FIXATION OF THE LICENSE FEES. SUCH MINIMUM GUARANTEED QUANTITY OF LIQUOR IS REQUIRED TO BE PUR CHASED IRRESPECTIVE OF WHETHER THE CONTRACTOR IN QUESTION HAS BEEN ABLE TO SALE QU ANTITY EARLIER PURCHASED BY HIM AND IF THE MINIMUM GUARANTEED QUANTITY IS NOT PURCH ASED THE CONTRACTOR IS LIABLE TO PAY EXCISE DUTY ON SUCH MINIMUM GUARANTEED QUANT ITY. IN VIEW OF THESE CONDITIONS OF LICENSE, THE LIQUOR CONTRACTORS DO UN DERTAKE THE RISK OF ACTION FOR SALE BELOW MSP. THE APPELLANT SUBMITTED THAT THE APPELLA NT HAS GATHERED INFORMATION UNDER THE RIGHT TO INFORMATION ACT FROM THE STATE E XCISE DEPARTMENT OF THE UJJAIN AND DHAR ABOUT THE FACTS WHETHER THE LIQUOR CONTRAC TOR IN THE AREA SALE LIQUORS BELOW MSP AND IF SUCH SALE BELOW MSP IS FOUND WHAT IS THE ACTION TAKEN AGAINST SUCH CONTRACTOR AND THE EXCISE DEPARTMENT HAS PROVI DED INFORMATION ABOUT VIOLATION OF SUCH CONDITION IN CASE OF ONE . OF THE CONTRACTOR VIZ MAXIMA TRADERS 8HOPAL PVT. LTD. UJJAIN, IN WHOSE CASE ON COMING TO KNOW ABOUT SUCH IRREGULARITY A PENALTY WAS IMPOSED, WHICH WAS LATER ON SET ASIDE IN APPEAL BY THE COMMISSIONER OF EXCISE. SIMILAR INFORMATION ABOUT A DEALER IN DHAR HAS ALSO BEEN RECEIVED FROM STATE EXCISE DEPARTMENT IN WHICH CASE ALSO A NOMINAL PENALTY OF RS.10,000/- HAS BEEN IMPOSED FOR SALE BELOW MSP. T HEREFORE, THE APPELLANTS CONTENTION IS CORRECT THAT THE SALE OF LIQUOR AT TH E PRICE BELOW MSP IS NOT UNUSUAL BUT THE LIQUOR CONTRACTORS DO SALE THE LIQUOR AT TH E PRICES BELOW THE MSP. IN VIEW OF THIS FACTUAL AND LEGAL POSITION ABOUT THE PRACTI CE OF LIQUOR CONTRACTORS OF SELLING LIQUOR BELOW MSP, NO ALLEGATION ABOUT SUPPRESSION OF SALES ON THE GROUND OF RECORDING OF SALE BELOW MSP COULD BE MADE BY AO WITHOUT BRINING ON RECORD POSIT IVE AND COGENT MATERIAL TO PROVE BEYOND DOUBT THAT THE APPELLANT I N FACT SOLD LIQUOR AT HIGHER PRICE THAN THAT RECORDED IN THE BOOKS OF ACCOUNTS. THERE IS NO EVIDENCE THAT THE APPELLANT HAS SOLD LIQUOR AT RATE HIGHER THAN RECORDED IN BOOKS. HOWEV ER, THE AO HAS NOT MADE ANY ATTEMPT TO BRING ON RECORD ANY SUCH MATERIAL TO PROVE THE ALLE GATION MADE BY HIM AGAINST THE APPELLANT. IT IS WELL ESTABLISHED PROPOSITION OF LA W THAT MERE SUSPICION CANNOT TAKE THE PLACE OF PROOF AND NO ADDITION CAN BE MADE ON THE B ASIS OF MERE IMAGINATION AND PRESUMPTION. RELIANCE IN THIS RESPECT IS PLACED ON FOLLOWING DECISIONS ITAT, INDORE BENCH, LNDORE:-L. ACIT V/S AVINASH CHALANA & CO REPORTED IN (2016) 28 IT J 295 , WHERE THE IT GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 18 AT AFTER CONSIDERING THE POSITION OF STRICT REGULAT ION AND CONDITION OVER THE COUNTRY LIQUOR CONTRACTOR UNDER THE PROVISIONS OF LAW AND AFTER CO NSIDERING THE FACTS THAT REGULAR BOOKS OF ACCOUNTS WERE MAINTAINED WHICH IS DULY AUDITED AND IN VIEW OF FACT NO DISCREPANCY IN ANY MANNER IN THE QUANTITATIVE DETAILS MAINTAINED WAS F OUND BY AO, HAS, HELD THAT THERE WAS NO JUSTIFICATION IN REJECTION OF BOOKS OF ACCOUNTS AND APPLICATION OF PROVISIONS OF SECTION 145(3). THE ITAT ALSO HELD THAT ESTIMATION OF SALES AT HIGH ER FIGURES ARE NOT JUSTIFIED AND HELD THAT NP RATE OF L. 77 WAS REASONABLE. 2. ACIT V/S SUREWIN MARKETING PVT LTD REPORTED IN (2016) 28 ITJ 299. IN THAT CASE ALSO THE ITAT DISAPPROVED THE REJECTION OF BOOKS OF ACCOUNTS IN ABSENCE OF ANY DISCREPANCY IN QUANTITATIVE DETAILS OF SALES AND PURCHASES. THE ITAT UPHELD THE VIEW OF CIT ( A) THAT THE PURCHASE OF LIQUOR WAS ON THE BASIS OF PERMIT G RANTED BY EXCISE AUTHORITIES AND IN ABSENCE OF ANY ADVERSE FINDING OR IN ABSENCE OF ANY DISCREPANCY IN DAILY SALES RECORDED AND IN PARTICULAR IN ABSENCE OF ANY MATERIAL TO SHOW THAT THE ASSESSEE WAS INDULGED IN' EFFECTING SALES OUTSIDE T HE BOOKS OF ACCOUNTS. THE REJECTION OF BOOKS IS NOT HELD TO BE PROPER. FINALL Y THE ITAT DIRECTED FOR APPLYING NP RATE OF 1.5% AS AGAINST 1.25% DECLARED BY THE A SSESSEE. 3. ACIT V/S GULMOHAR TRADERS (A CASE OF LIQUOR CONTRACTOR) REPO RTED IN (2016) 28 IT J 302. IN THAT CASE ALSO THE IT AT HAS DISAPPROVED THE REJ ECTION OF BOOKS OF ACCOUNTS ONLY ON THE GROUND OF NON ISSUANC E OF CASH MEMOS FOR SALE AND IN VIEW OF THE FACT THAT NO DISCREPANCY IS FOUND IN THE ACCOUNTS MAINTAINED BY THE ASSESSEE. THE IT AT HAS ACCORDINGLY UPHELD THE ORDE R OF CIT(A) WHEREBY HE HAD: DISAPPROVED REJECTION OF BOOKS OF ACCOUNTS OF THE A SSESSEE. 4.1.4 THEREFORE, IN VIEW OF THE ABOVE SETTLED POSIT ION, THE REJECTION OF BOOKS OF ACCOUNTS IN THE INSTANT CASE ONLY ON THE BASIS OF A BSENCE OF CASH MEMOS IS CONTRARY TO THE JUDICIAL OPINION. THE AO IS NOT JUS TIFIED IN ESTIMATING THE TURNOVER OF THE APPELLANT ON PRESUMPTIVE BASIS. NET PROFIT R ATE OF 4.2 IN CASE OF SMT. GURUCHARAN KAUR OBEROI IN APPEAL NO. U-11/2014-15 A ND 3.56 IN APPEAL NO.U- 17/2013-14 WAS UPHELD. IN CASE OF RAMAVTAR JAISWAL IN APPEAL NO.U-298/2012- GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 19 13 FOR ASSESSMENT YEAR 2010-11 THE CIT(A) UJJAIN HA D APPLIED RATE OF 3.5%. THE APPELLANT DURING THE YEAR UNDER CONSIDERATION HAS D ECLARED THE NET PROFIT RATE OF 3.47%. IT WILL BE APPROPRIATE TO ADOPT NET PROFIT R ATE @ 3.5% IN THIS YEAR ALSO. THEREFORE, THE NET PROFIT OF THE APPELLANT COMES TO RS.39,45,372/-. THE APPELLANT HERSELF DECLARED THE NET PROFIT AT RS.39,13,404/-. THEREFORE, THE ADDITION TO THE EXTENT OF RS.31,968/ (RS.39,45,372/- _ RS.39,13,404/-) IS CONFIRMED. THE APPELLANT WILL GET THE RELIEF OF RS.3,09,63,422/-. THEREFORE, THE APPEAL ON THIS GROUND IS PARTLY ALLOWED 16. WE OBSERVE THAT THE ASSESSEE IS CONSISTENTLY ENGAG ED IN THE BUSINESS OF LIQUOR. GROSS PROFIT RATE OF 8.48% AND NET PROF IT RATE OF 3.47% HAS BEEN DECLARED FOR THE YEAR UNDER APPEAL ON THE TOTA L TURNOVER OF RS.11,27,24,922/- AS AGAINST THE GROSS PROFIT OF 9. 10% AND 3.17% SHOWN FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR. BOO KS OF ACCOUNTS ARE AUDITED U/S 44AB OF THE ACT. ASSESSEE BEING THE LI QUOR CONTRACTOR ALL THE PURCHASES ARE DULY VOUCHED WITH THE SUPPORT OF EXCI SE DEPARTMENT RECORDS AND THE SAME HAS NOT BEEN CHALLENGED BY THE REVENUE AUTHORITIES. ASSESSEE HAS FAIRLY ACCEPTED BEFORE LD.A.O THAT NO CASH MEMOS ARE ISSUED FOR LIQUOR SALES BECAUSE IN THIS LINE OF BUS INESS THE CUSTOMER IS ALWAYS IN HURRY TO PURCHASE THE GOODS AND IS HARDLY INTERESTED IN TAKING THE SALES BILLS. HOWEVER REGULAR QUANTITATIVE DETA ILS ARE MAINTAINED FOR THE OPENING STOCK, PURCHASES, SALES AND CLOSING STO CK. LD. A.O HAS GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 20 REJECTED THE BOOKS OF ACCOUNTS MERELY ON THE OBSERV ATION THAT SALE BILLS ARE NOT PREPARED WHICH MAKES IT DIFFICULT TO VERIFY THE ACTUAL SALES AND THERE IS ALWAYS THE POSSIBILITY THAT ASSESSEE SALES GOODS AT A HIGHER PRICE BUT RECORDS AT LOWER PRICE IN THE BOOKS. LD. A.O M ADE THE ADDITION FOR SUPPRESSED SALES AT RS.3,09,95,390/- RIDING ON THES E OBSERVATIONS. 17. WE OBSERVE THAT NO SPECIFIC INSTANCE HAS BEEN POIN TED OUT BY THE LD. A.O ABOUT ANY TRANSACTION WHICH COULD PROVE THAT TH E ASSESSEE HAD SUPPRESSED THE SALES BY WAY OF RECEIVING HIGHER AMO UNT FOR SALES BUT ENTERED THE FIGURE ON LOWER PRICE IN THE BOOKS OF A CCOUNTS. THE BASIS TAKEN BY THE LD. A.O IS THE MSP AND MRP. NO WEIGHT AGE HAS BEEN GIVEN BY THE LD. A.O THAT THE GOODS ARE NOT ALWAYS SOLD O N MRP DUE TO COMPETITION WHICH FORCES TO MAKE SALE AT LOWER PRIC E. GROSS PROFIT RATE REMAINS CONSISTENT. BOOKS OF ACCOUNTS HAVE BEEN DU LY AUDITED. QUANTITATIVE DETAILS OF VARIOUS QUALITIES OF GOODS HAVE BEEN MAINTAINED. WE FIND THAT IN THE SIMILAR SET OF FACTS THE CO-ORD INATE BENCH IN THE CASE OF ACIT VS AVINASH CHALANA & CO (2016) 28 ITJ 295, AFTER CONSIDERING THE POSITION OF STRICT REGULATION AND CONDITION OVE R THE COUNTRY LIQUOR CONTRACTOR UNDER THE PROVISIONS OF LAW AND AFTER CO NSIDERING THE FACTS THAT REGULAR BOOKS OF ACCOUNTS WERE MAINTAINED WHICH IS DULY AUDITED AND IN GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 21 VIEW OF FACT NO DISCREPANCY IN ANY MANNER IN THE QU ANTITATIVE DETAILS MAINTAINED WAS FOUND BY THE AO HAS HELD THAT THERE WAS NO JUSTIFICATION IN REJECTION OF BOOKS OF ACCOUNTS AND APPLICATION O F PROVISIONS OF SECTION 145(3) OF THE ACT. THE ITAT ALSO HELD THAT ESTIMA TION OF SALES AT HIGHER FIGURES ARE NOT JUSTIFIED AND HELD THAT NET PROFIT RATE OF 1.77% WAS REASONABLE. 18. HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF A CIT V/S GENDALAL HAZARILAL AND CO 263 ITR 679 LAID DOWN THE RATIO THAT THE DOCTRINE OF RES JUDICATA IS NOT APPLICABLE BUT CONSISTENCY HAS TO B E MAINTAINED UNLESS THERE IS A MANIFEST DISTINGUISHABLE FEATURE . 19. APPLYING THIS RATIO ON THE FACTS OF THE INSTANT CA SE, WE FIND THAT SIMILAR TYPE OF BUSINESS HAS BEEN CARRIED OUT I.E. SALE OF LIQUOR. PURCHASES ARE NOT DOUBTED AT ANY STAGE AS THEY ARE THROUGH EXCISE DEPARTMENT CONTROLLED BY THE GOVERNMENT. QUANTITAT IVE DETAILS HAVE BEEN FILED FOR ALL THE PURCHASES. BOOKS OF ACCOUNT S ARE DULY AUDITED. BETTER NET PROFIT RATE HAS BEEN DECLARED I.E. 3.47% AS AGAINST 3.17% IN THE IMMEDIATELY PRECEDING FINANCIAL YEAR. IN THESE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE WE FIND NO INCONSISTENCY IN THE WELL REASONED FINDING OF FACT BY LD. CIT(A) APPLYING NET PROFIT R ATE OF 3.5%. WE GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 22 ACCORDINGLY CONFIRM THE VIEW OF LD. CIT(A) OF DELET ING THE ADDITION OF SUPPRESSED SALES OF RS.3,09,63,442/- AND DISMISS RE VENUES GROUND NO. 1 & 2. 20. APROPOS GROUND NO.3 RELATING THE DELETION AND ADDI TION OF RS.13,97,442/- TOWARDS UNDERVALUATION OF CLOSING ST OCK. WE OBSERVE THAT THE LD. A.O HAS MERELY CALCULATED THE STOCK AS PER THE PRICE VALUE ON THE EXCISE RECORDS WITHOUT GIVING ANY BENEFIT OF DAMAGE D AS SHORTAGES IN GOODS DUE TO HANDLING AND TRANSPORTATION. SURPRISIN GLY IN THE TAX AUDIT REPORT FURNISHED BY THE ASSESSEE IN ANNEXURE-B SHOW ING THE QUANTITATIVE DETAILS NIL SHORTAGE HAS BEEN SHOWN. BEFORE THE LO WER AUTHORITIES ASSESSEE HAS CLAIMED ABOUT THE ELEMENT OF BREAKAGE IN STOCK DAMAGED IN THE PROCESS OF HANDLING BUT NO SUCH SHORTAGE HAS BE EN ENTERED IN THE BOOKS OF ACCOUNTS NOR HAS BEEN POINTED OUT IN THE T AX AUDIT REPORT WHICH DOES NOT SUPPORT THE CONTENTION OF THE ASSESSEE AS WELL AS FINDING GIVEN BY LD. CIT(A). 21 . IN THESE GIVEN FACTS AND CIRCUMSTANCES WHERE ON O NE HAND NO SHORTAGE HAS BEEN REPORTED IN THE AUDITED FINANCIAL STATEMENTS AND ON THE OTHER HAND ONE CANNOT DENY THE POSSIBILITY OF B REAKAGE AND DAMAGE IN THE PROCESS OF HANDLING GOODS. IN ORDER TO BE FA IR TO BOTH THE PARTIES GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 23 AND MEET THE ENDS OF JUSTICE, WE SUSTAIN ADDITION O F RS.2,00,000/- FOR UNDER VALUATION OF CLOSING STOCK AND ALLOW PARTLY R EVENUES GROUND NO.3. IN THE RESULT GROUND NO.3 OF THE REVENUES APPEAL IS PARTLY ALLOWED. 22. NOW WE TAKE UP REVENUES APPEAL NO.490/1ND/17 IN T HE CASE OF SHRI JASWINDER SINGH OBEROI. AS REFERRED ABOVE THAT BOTH THE PARTIES AGREED THAT THE FACTS AND ISSUES RAISED IN BOTH THE APPEALS ARE SAME AND THEREFORE THE DECISION TAKEN BY US WHILE ADJUDICATI NG THE ISSUES IN THE CASE OF SMT. GURUCHARAN KAUR OBEROI IN THE PRECEDIN G PARAS SHALL APPLY MUTANDIS MUTANDIS ON THE ISSUES RAISED IN THE CASE OF SHRI JASWINDER SINGH OBEROI. WE ACCORDINGLY CONFIRM THE FINDINGS OF LD. CIT(A) DELETING THE ADDITION FOR SUPPRESSED SALES OF RS.6,16,66,374 /- AND DISMISS REVENUES GROUND NO. 1 & 2. SIMILARLY AS REGARDS G ROUND NO.3 RELATING TO ADDITION OF UNDERVALUATION CLOSING STOCK AT RS.1 2,85,423/-, AS DECIDED IN THE PRECEDING PARAS, WE PARTLY CONFIRM THE ADDIT ION FOR UNDERVALUATION CLOSING STOCK AT RS.1,50,000/- ON THE BASIS OF OUR OBSERVATION GIVEN HEREIN ABOVE IN PARA 21. 23. IN THE RESULT BOTH THE APPEALS OF THE REVENUE ARE PARTLY ALLOWED GURUCHARAN KAUR & JASWINDER SINGH ITA NO.489 & 490/IND/2017 24 THE ORDER PRONOUNCED IN THE OPEN COURT ON 14.05.2 019. SD/- SD/- (KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 14 MAY, 2019 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE