M/s Rana & Co (Wine Contractors), Ropar V. ITO, Nangal

ITA 598/CHANDI/2011

• Counselvise Citation: 59821514 RSA 2011
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 19-09-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 30-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Assessee Lawyers: AJAY JAIN
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 598/CHD/2011 ASSESSMENT YEAR: 2003-04 M/S RANA & COMPANY, VS. THE ITO, WARD 1(1), (WINE CONTRACTORS), NANGAL DISTT. ROPAR PAN NO. AAGFR1853G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AJAY JAIN RESPONDENT BY : SMT.JAISHREE SHARMA DATE OF HEARING : 20.09.2011 DATE OF PRONOUNCEMENT : 27.09.2011 ORDER PER SUSHMA CHOWLA, JM THE APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A), CHANDIGARH DATED 15.3.2011 RELATING TO ASSESSMENT Y EAR 2003-04 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF THE I.T. A CT, 1961. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE ORDERS OF LD. CIT(A) IS BAD, AGAINST THE FACTS AND LAW. 2. THAT THE LD. CIT(A) HAS WRONGLY CONFIRMED ADDITION OF RS. 3,60,000/- ON ACCOUNT OF AHATA 2 INCOME ON ESTIMATION BASIS TO THE TOTAL INCOME OF THE ASSESSEE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E WAS A LICENSEE FOR RUNNING LIQUOR VENDS IN THE AREA UNDER DISTRICT SOL AN AND SWARGHAT, DISTRICT BILASPUR IN HIMACHAL PRADESH. UNDER THE P OLICY OF EXCISE DEPARTMENT OF HIMACHAL PRADESH, THE LIQUOR CONTRACT OR DOING THE BUSINESS OF LIQUOR IN THE STATE OF HIMACHAL PRADESH HAD TO P ROVIDE AHATA I.E. A PLACE WHERE PEOPLE GENERALLY USE TO SIT FOR LIQUOR CONSUMPTION ALONGWITH EACH VEND. THE ASSESSEE HAD ABOUT 30 VENDS OPERATI NG IN THE STATE OF HIMACHAL PRADESH. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASKED THE ASSESSEE TO INTIMATE WHERE TH E AHATA INCOME HAD BEEN ACCOUNTED FOR. IN REPLY, THE CLAIM OF THE ASS ESSEE WAS THAT IT WAS NOT CHARGING ANY INCOME FOR PROVIDING THE FACILITIES. THE ASSESSING OFFICER NOTED THAT AS PER THE EXCISE POLICY OF HIMACHAL GOV ERNMENT AT THE PLACE WHERE THE VENDS OF L-2 (IMFL) AND L13, THE COUNTRY LIQUOR, WERE JOINTLY ALLOTTED TO THE LICENSEE, AHATA IS ALSO ALLOTTED IN THE NAME OF THE LICENSEE. IT WAS GENERAL PRACTICE THAT THE AHATA WAS GIVEN ON CONTRACT BASIS TO SOME PERSONS AND LICENCE FEE OF RS. 50/- TO RS. 100/- IS CHARGED PER DAY DEPENDING UPON THE PLACE OF OPERATION. THE ASSESS ING OFFICER NOTED THAT 30 PLACES OF JOINT VENDS WERE ALLOTTED TO THE ASSES SEE. THE ASSESSING OFFICER ESTIMATED INCOME OF PER AHATA AT RS. 12,000 /- PER ANNUM RESULTING IN ADDITION OF RS. 3,60,000/-. THE CIT(A) UPHELD T HE ORDER OF ASSESSING OFFICER REJECTING THE CLAIM OF THE ASSESSEE THAT TH E ESTIMATE WAS ARBITRARY. THE ASSESSEE IS IN APPEAL AGAINST THE SAID ORDER OF CIT(A). 4. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT IT WAS NOT CHARGING ANY AHATA INCOME AND WAS RUNNING THE SAME AT ITS OWN EX PENDITURE. THE LD. 3 DR FOR THE REVENUE POINTED OUT THAT THE EXPENDITURE HAD BEEN INCURRED BY THE ASSESSEE FOR RUNNING THE SAID AHATA, IN THE ABS ENCE OF ANY EXPENDITURE BOOKED, THE ORDER OF THE ASSESSING OFFICER IN ESTIM ATING THE INCOME NEEDS TO BE UPHELD. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. THE ASSESSEE IS CARRYING ON THE BUSINESS OF RUNNING LIQ UOR VENDS IN THE STATE OF HIMACHAL PRADESH. AS PER THE EXCISE POLICY OF THE HIMACHAL PRADESH, WHERE THE LICENSEE IS ALLOTTED JOINT VENDS OF L-2 ( IMFL) AND L-13 COUNTRY LIQUOR, AHATA IS ALSO ALLOTTED TO THE LICENSEE BY T HE EXCISE AUTHORITIES. THE AHATA IS A PLACE ACCESSABLE WITH EACH VEND WHER E PEOPLE GENERALLY USE TO SIT FOR LIQUOR CONSUMPTION. ADMITTEDLY, THE ASS ESSEE HAS 30 SUCH VENDS WHERE JOINT ALLOTMENT WERE ALLOTTED TO THE ASSESSEE AND AS PER THE POLICY OF THE EXCISE AUTHORITIES, THE ASSESSEE HAD TO PROVIDE SPACE FOR AHATA ALONGSIDE 30 SUCH VENDS. THE ASSESSEE ADMITTED TO H AVE SO PROVIDED THE SPACE, HOWEVER, NO INCOME FROM AHATA HAD BEEN SHOWN BY THE ASSESSEE. THE ASSESSEE HAS NOT PIN POINTED ANY EXPENSES SPECI FICALLY INCURRED FOR RUNNING THE SAID AHATA. THE GENERAL TREND / PRACTI CE OF THE MARKET WERE THAT SUCH AHATAS WERE GIVEN ON CONTRACT BASIS AND L ICENCE FEE IS CHARGED BETWEEN RS. 50/- TO RS. 100/- PER DAY. IN THE ABSE NCE OF ANY PARTICULARS BEING FILED BY THE ASSESSEE AND ALSO IN THE ABSENCE OF ANY EVIDENCE BEING BROUGHT ON RECORD TO ESTABLISH ITS CLAIM, THE ASSES SING OFFICER HAD ESTIMATED THE INCOME OF RS. 12,000/- PER ANNUM PER VEND FOR 30 VENDS. WE ARE OF THE VIEW THAT THE INCOME FROM SUCH AHATAS BEING RUN IN THE AREA ALLOTTED TO THE ASSESSEE IS TO BE INCLUDED IN THE H ANDS OF THE ASSESSEE. HOWEVER, IN THE FAIRNESS OF JUSTICE, WE DEEM IT FIT TO RESTRICT THE SAID INCOME TO RS. 6000/- PER ANNUM EACH FOR 30 VENDS. CONSEQUENTLY, THE 4 ASSESSING OFFICER IS DIRECTED TO INCLUDE INCOME OF RS. 1,80,000/- IN THE HANDS OF THE ASSESSEE AND DELETE THE ADDITION OF RS . 1,80,000/-. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS PARTLY A LLOWED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF SEPTEMBER, 2011. SD/- SD/- (MEHAR SINGH) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 27 TH SEPTEMBER, 2011 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH