ACIT, Jaipur V. WALI MOHD. & PARTY, Jaipur

ITA 603/JPR/1998

• Counselvise Citation: 60323114 RSA 1998
• Duration Of Justice: 15 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 1995-1996
• Appeal Filed On: 04-10-1998
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Assessee Lawyers: G M MEHTA
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI RAJ PAL YADAV AND SHRI R.C. SHARMA) ITA NO. 603/JP/1998 ASSESSMENT YEAR : 1995-96 THE ACIT VS. M/S. WALI MOHD & PARTY CENTRAL CIRCLE- 2, JAIPUR JAIPUR (APPELLANT) (RESPONDENT) ITA NO. 518/JP/1998 ASSESSMENT YEAR : 1995-96 M/S. WALI MOHD & PARTY VS. THE ACIT JAIPUR CENTRAL CIRCLE-2, JAIPUR (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI D.C. SHARMA ASSESSEE BY : SHRI G.M. MEHTA DATE OF HEARING: 26-05-2014 DATE OF PRONOUNCEMENT: 30-05-2014 ORDER PER R.C. SHARMA, AM THESE ARE THE CROSS APPEALS FILED BY THE REVENUE AND THE ASSESSEE AGAINST ORDER OF THE LD. CIT(A) DATED 04-08-1998 FO R THE ASSESSMENT YEAR 1995-96, IN THE MATTER OF ORDER PASSED U/S 143(3) O F THE I.T. ACT, 1961. 2.1 AT THE OUTSET, IT IS BEING BROUGHT ON RECORD TH AT THESE APPEALS WERE DECIDED BY THE TRIBUNAL VIDE ITS ORDER DATED 16-08- 2004. AGAINST THIS ORDER OF TRIBUNAL, BOTH THE ASSESSEE AND REVENUE APPROACH ED THE HON'BLE HIGH 2 COURT, AND THE HON'BLE HIGH COURT VIDE ITS ORDER DA TED 21-01-2014 SET ASIDE THE ORDER OF THE TRIBUNAL FOR DECIDING AFRESH AND D ENOVO THE TRADING ADDITION MADE BY THE AO IN ACCORDANCE WITH LAW. THE HON'BLE HIGH COURT HAS ALSO DIRECTED ITAT TO DECIDE THESE APPEALS EXPEDITIOUSLY NOT LATER THAN 06 MONTHS FROM THE DATE PARTIES ARE CALLED TO PUT THEIR APPEA RANCE BEFORE ITAT. IN ACCORDANCE WITH DIRECTION OF HON'BLE HIGH COURT, TH ESE APPEALS WERE AGAIN HEARD ON MERIT AND ARE DECIDED AFRESH IN THE FOLLOW ING MANNER. 2.2 RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS P ERUSED. THE FACTS IN BRIEF ARE THAT THE ASSESSEE WAS AWARDED LIQUOR CONT RACT FOR UDAIPUR, BANSWARA AND DUGARPUR. THE ASSESSEE HAS FILED ITS R ETURN OF INCOME AT RS. 6,31,426/-. BY REJECTING THE BOOKS OF ACCOUNT U/S 1 45(3) OF THE ACT, THE AO HAS MADE ADDITION OF RS. 19,97,023/-/-. HOWEVER, TH E LD. CIT(A) BY HIS IMPUGNED ORDER HAS UPHELD THE ADDITION OF RS. 4.00 LACS AGAINST WHICH THE REVENUE AND ASSESSEE ARE IN APPEAL BEFORE US. 2.3 DURING THE COURSE OF HEARING, IT WAS ARGUED BY THE LD. DR THAT THE ASSESSEE HAS NOT MAINTAINED THE SALES BILLS NOR THE STOCK REGISTER. THEREFORE, THE AO WAS JUSTIFIED IN MAKING TRADING ADDITION OF RS. 19,97,023/-. 2.4 ON THE OTHER HAND, IT WAS CONTENDED BY THE LD. AR THAT THE ASSESSEE HAD SHOWN GROSS PROFIT RATE OF 70.36% IN CASE OF CO UNTRY LIQUOR AND 11.54% IN CASE OF IMFL/BEER WHICH IS COMPARATIVELY BETTER AS COMPARED TO OTHER LIQUOR CONTRACTORS DURING THE YEAR UNDER CONSIDERAT ION. 3 2.5 WE HAVE CONSIDERED THE RIVAL CONTENTIONS GONE T HROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FIND THAT ON TURNOVER OF COUNTRY LIQUOR AMOUNTING TO RS. 12.23 CRORES, THE ASSESSEE HAD SHOWN GROSS P ROFIT OF RS. 8.61 CRORES WHICH WORKS OUT THE GROSS PROFIT RATE AT 70.36%. IN RESPECT OF SALE OF IMFL/BEER AMOUNTING TO RS. 28.02 CRORES, THE ASSESS EE HAD SHOWN GROSS PROFIT OF RS. 3.23 CRORES WHICH GIVES RISE TO 11.4% GROSS PROFIT RATE. WE FOUND THAT DUE TO NON-LIFTING OF AGREED QUANTITY OF LIQUOR, THE ASSESSEE HAD TO PAY SHORT LICENSE FEE OF RS. 6.24 CRORES IN CASE OF COUNTRY LIQUOR AND RS. 4.68 CRORES IN CASE OF IMFL/BEER. HOWEVER, BY IGNORING T HE GROSS PROFIT RATE SHOWN BY THE ASSESSEE VIS-A-VIS SHORT LICENSE FEE A CTUALLY PAID BY THE ASSESSEE, THE AO HAD ESTIMATED NET PROFIT RATE AT 2 .75%. IF WE APPLY THE NET PROFIT RATE BEFORE SHORT LICENSE FEE, IT WORKS OUT AT 27.31%. THUS WE FOUND THAT THE SHORT LICENSE FEE PAID BY THE ASSESSEE AMO UNTING TO RS. 11.92 CRORES IS THE MAIN REASON FOR DECLINE IN NET PROFIT RATE. THE LD. CIT(A) AFTER CONSIDERING THE ENTIRE MATERIAL AVAILABLE ON RECORD , VIS-A-VIS GROSS PROFIT RATE SHOWN BY THE ASSESSEE , UPHELD THE ADDITION OF RS. 4.00 LACS, WHICH APPEARS TO BE VERY REASONABLE KEEPING IN VIEW THE OBSERVATI ON OF THE AO THAT THE ASSESSEE HAS NEITHER MAINTAINED THE STOCK REGISTER NOR KEPT THE SALE BILLS. DETAILED FINDINGS RECODED BY THE LD. CIT(A) HAD NOT BEEN CONTROVERTED BY DEPARTMENT BY BRINGING ANY POSITIVE MATERIAL ON REC ORD. THUS, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE LD . CIT(A). 4 3.0 IN THE RESULT, BOTH THE APPEALS OF THE REVENUE AND ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 -05-201 4. SD/- SD/- (RAJ PAL YADAV) (R.C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR DATED: 30 TH MAY, 2014 *MISHRA COPY FORWARDED TO:- BY ORDER 1. THE ACIT, CENTRAL CIRCLE- 2, JAIPUR 2. M/S. WALI MOHD. & PARTY, , JAIPUR 3. THE LD. CIT 4. THE LD. CIT(A), JAIPUR 5..THE LD. DR 6.THE GUARD FILE (IT NO.603 & 518/JP/1998) A.R. ITA T: JAIPUR 5 6