M/s. MAA ANNAPURNA TRADING CO., Dewas V. The ITO, Dewas

ITA 640/IND/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5884 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 15-10-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S S DESH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER I.T.A.NO.636/IND/2014 A.Y. : 2010-11 ITO, DEWAS M/S.MAA ANNAPURNA TRADING COMPANY VS. DEWAS APPELLANT RESPONDENT PAN NO.AARFM631M I.T.A.NO.640/IND/2014 2010-11 M/S.MAA ANNAPURNA TRADING COMPANY ITO, DEWAS DEWAS VS. APPELLANT RESPONDENT DEPARTMENT BY : SHRI R.A.VERMA, DR ASSESSEE BY : SHRI S.S.DESHPANDE, CA DATE OF HEARING : 23. 1 1 .2015. DATE OF PRONOUNCEMENT : 05 . 01. 201 6 ITO ,DEWAS VS. M/S. MAA ANNAPUNA TRADING COMPANY, D EWAS, I.T.A.NO. 636/IND/2014 & 640/IND/2014 - A.Y. 2010-11 2 2 O R D E R PER D.T.GARASIA, J.M. THESE CROSS APPEALS BY THE DEPARTMENT AND ASSESSEE ARE DIRECTED AGAINST THE ORDER OF CIT(A), UJJAIN, DATED 11.07.2014 FOR THE ASSESSMENT YEAR 2010-11. 2. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE I S A PARTNERSHIP FIRM ENGAGED IN FOREIGN LIQUOR TRADE BU SINESS. THE RETURN OF INCOME HAS BEEN FILED ON1 5.10.2010 DECLA RING TOTAL INCOME OF RS 4,92,235/- AFTER INTEREST AND REMUNER ATION TO THE PARTNERS. DURING THE COURSE OF ASSESSMENT PROCE EDINGS THE AO ESTIMATED THE INCOME OF THE ASSESSEE @ 5 % THER EBY MAKING THE ADDITION OF RS. 36,96,503/-. THEREFORE, AGAINST THE ORDER ASSESSEE HAS PREFERRED THE APPEAL. 3. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS ADOPTED THE PROFIT RATE AT 3.5 % INSTEAD OF 5%. 4. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT TH E ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN BUSINESS OF FOREIGN LIQUOR CONTRACT BUSINESS. THE ASSESSEE HAS TAKEN TH E FOREIGN LIQUOR CONTRACT FOR THE FIRST TIME DURING THE YEAR UNDER ITO ,DEWAS VS. M/S. MAA ANNAPUNA TRADING COMPANY, D EWAS, I.T.A.NO. 636/IND/2014 & 640/IND/2014 - A.Y. 2010-11 3 3 ASSESSMENT. HE FURTHER SUBMITTED THAT THE EXCISE DE PARTMENT HAS ALLOTTED TWO FOREIGN LIQUOR SHOPS SITUATED AT U SHA NAGAR AND PAGNISH PAGA, INDORE. THE HEAD OFFICE OF THE OF THE FIRM IS SITUATED AT DEWAS AND BUSINESS PLACE IS AT INDORE. THE FIRM HAS MAINTAINED REGULAR BOOKS OF ACCOUNT DULY MAINTA INED BY THE CHARTERED ACCOUNTANTS, WHO HAVE AUDITED THE BOO KS. THE SALES RECORD HAVE BEEN MAINTAINED ON THE BASIS OF D AILY LIQUOR SALES MAINTAINED BY THE SALESMEN AT SHOP AND SALES REGISTER IS MAINTAINED BY THE SALESMEN ONLY. THEREFORE, THE SAL ES CHARGES ARE JUST LIKE INVOICES IN THE TRADE. THEREFORE, THE AO IS NOT JUSTIFIED IN REJECTING THE BOOK RESULT. THE ASSESSE E HAS ALSO RELIED UPON THE DECISION OF JABALPUR BENCH, WHEREIN THE NET PROFIT HAS BEEN ADOPTED AT 1.5 % AND SIMILAR NET PR OFIT HAS ALSO BEEN ADOPTED BY AGRA BENCH AND INDORE BENCH AL SO ADOPTED 1.5 % TO 2 % PROFIT RATE IN MANY CASES. THE REFORE, THE LD. CIT(A) IS NOT JUSTIFIED IN MAINTAINING THE NET PROFIT @ 3.5 %. 5. ON THE OTHER HAND, THE LD. DR OBJECTED TO IT AND LD . DR SUBMITTED THAT THE ASSESSEE IS NOT MAINTAINING S ALES BILLS AND WHEN THE ASSESSEE IS NOT MAINTAINING THE SALES BOOKS AND ITO ,DEWAS VS. M/S. MAA ANNAPUNA TRADING COMPANY, D EWAS, I.T.A.NO. 636/IND/2014 & 640/IND/2014 - A.Y. 2010-11 4 4 ALSO WHEN THE BOOKS ARE REJECTED, THE AO HAS TO EST IMATE NET PROFIT. THEREFORE, WHEN THE AO HAS ESTIMATED NET PR OFIT. THE LD. CIT(A) IS NOT JUSTIFIED IN REDUCING THE NET PRO FIT. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE LD. CIT(A) HAS ESTIMATED THE NET P ROFIT AT 3.5 % ON THE BASIS OF ONE CASE, VIZ. SHRI RAJENDRA RAMAVT AR JAISWAL, WHEREIN THE NET PROFIT WAS TAKEN AT 3.5 % AND FOLLO WING THE SAME, HE HAS ADOPTED NET PROFIT AT 3.5 %. MOREOVER, THE LD. CIT(A) HAS ALSO HELD THAT THE ACTION OF THE AO IN R EJECTING THE BOOKS OF ACCOUNT IS NOT JUSTIFIABLE. THEREFORE, HE HAS ESTIMATED THE NET PROFIT. WE FIND THAT DURING THE COURSE OF H EARING, THE LD. AUTHORIZED REPRESENTATIVE HAS ALSO CITED THE FO LLOWING JUDGMENTS :- (I) ORDER OF I.T.A.T., INDORE BENCH IN THE CASE ACIT VS. M/S.GULMOHAR TRADERS, BHOPAL, PASSED IN I.T.A.NO. 115/IND/2011 DATED 1.2.2012. (II) ORDER OF I.T.A.T., INDORE BENCH IN THE CASE OF ACIT VS. M/S.AVINASH CHALANA & CO., BHOPAL PASSED IN I.T.A.NO. 78/IND/2010 DATED 15.06.2011. ITO ,DEWAS VS. M/S. MAA ANNAPUNA TRADING COMPANY, D EWAS, I.T.A.NO. 636/IND/2014 & 640/IND/2014 - A.Y. 2010-11 5 5 7. AFTER INTRODUCTION OF NEW EXCISE LAW, I.T.A.T., JABALPUR BENCH HAS ADOPTED NET PROFIT RATE @ 8.5% I N SALES OF M/S. RAMESH CHANDRA RAVINDRA KUMAR RAI VS. ITO, (20 10) 14 ITJ 34 (JAB TRIB). SIMILAR VIEW WAS ALSO TAKEN BY T HE I.T.A.T. INDORE BENCH IN THE CASES OF M/S. AVINASH CHALANA ( SUPRA) AND M/S.GULMOHAR TRADERS, BHOPAL (SUPRA), WHEREIN N ET PROFIT @ 1.5 % TO 2 % WAS TAKEN. THEREFORE, WE ARE OF THE VIEW THAT THE LD. CIT(A) IS JUSTIFIED IN H8IS ACTION AND OUR INTERFERENCE IS NOT REQUIRED. 8. IN THE RESULT, DEPARTMENTS APPEAL AS WELL AS ASSESSEES APPEAL BOTH ARE DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OP EN COURT ON 5 TH JANUARY, 2016. SD/- (B.C.MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 5 TH JANUARY, 2016. CPU* 23.11