M/s Basti Wine Co. (Desi), Kanpur V. Income Tax Officer-1(1), Kanpur

ITA 703/LKW/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3101 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 05-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Rejection of books of accounts; Agreed addition
• Section: 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH SMC, LUCKNOW BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NOS.703 & 704/LKW/2016 ASSESSMENT YEARS:2011-12 TO 2012-13 M/S BASTI WINE CO. (DESI) 24/4, THE MALL, KANPUR PAN: AAAAB5674J VS. INCOME TAX OFFICER, WARD 1(1), KANPUR ITA NO.741/LKW/2016 ASSESSMENT YEAR:2011-12 M/S BASTI WINE CO. (ENGLISH) 24/4, THE MALL, KANPUR PAN: AAAAB4224A VS. ACIT, RANGE-1, KANPUR (APPELLANT) (RESPONDENT) O R D E R PER: T. S. KAPOOR, A.M. THESE ARE THREE APPEALS FILED BY THE ASSESSEE AGAI NST THE SEPARATE ORDERS OF LEARNED CIT(A) DATED 03.03.2015, 06.10.20 15 AND 06.10.2015 RESPECTIVELY. 2. THE GROUND OF APPEALS TAKEN BY THE ASSESSEE IN T HESE APPEALS ARE REPRODUCED BELOW: ITA NO.703/LKW/2016 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE REJECTION OF BOOKS OF ACCOUNT AND MA KING AD-HOC ADDITION OF RS. 3,00,000/- TO GROSS PROFIT WITHOUT ANY BASIS. APPELLANT BY SHRI ASHISH JAISWAL, ADVOCATE RESPONDENT BY SHRI R.K. VISHWAKARMA, DR DATE OF HEARING 09/08/2018 DATE OF PRONOUNCEMENT 24 / 08 /201 8 I.T.A. NOS.703 TO 704/LKW/2016 ASSESSMENT YEARS:2011-12 TO 2012-13 2 2. THAT THE LEARNED ASSESSING OFFICER AS WELL AS CO MMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE AD-HOC DI SALLOWANCE AND OTHER ADDITION AFTER AD-HOC GROSS PROFIT ADDITION ON ACCO UNT OF REJECTION OF BOOKS. 3. THAT THE LEARNED ASSESSSING OFFICER AS WELL AS C OMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION OF RS.1,23,854/- ON ACCOUNT OF INTEREST ON INCOME TAX REFUND AFTER REJE CTION OF BOOKS. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE AD-HOC DISALLOWANCE ON ACCOUNT OF SH OP EXPENSES OF RS. 48,000/-. 5. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE AD-HOC DISALLOWANCE ON ACCOUNT OF BA RDANA EXPENSES OF RS. 5,252/-. 6. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE AD-HOC DISALLOWANCE ON ACCOUNT OF NI KASI EXPENSES OF RS. 8,800/-. ITA NO.704/LKW/2016 1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS ERRED IN CONFIRMING THE REJECTION OF BOOKS OF ACCOUNT AND MA KING AD-HOC ADDITION OF RS. 3,50,000/- GROSS PROFIT WITHOUT ANY BASIS. 2 THAT THE LEARNED ASSESSING OFFICER AS WELL AS COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE AD-HOC D ISALLOWANCE AND OTHER ADDITION AFTER AD-HOC GROSS PROFIT ADDITION O N ACCOUNT OF REJECTION OF BOOKS. 3 THAT THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) HAS ERRED IN CONFIRMING THE AD-HOC DISALLOWANCE ON ACCOUNT OF PR INTING & STATIONERY OF RS. 45,292/-. 4. THAT THE LEARNED ASSESSING OFFICER AS WELL AS CO MMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 2,20,800/- ON ACCOUNT OF INTEREST ON INCOME TAX REFUND AFTER REJE CTION OF BOOKS. ITA NO.741/LKW/2016 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE REJECTION OF BOOKS OF ACCOUNT AND MA KING AD-HOC ADDITION OF RS. 18,22,987/- TO GROSS PROFIT WITHOUT ANY BASIS. 2 THAT THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS) HAS ERRED IN MAKING ADDITION ON ACCOUNT OF INTEREST OF INCOME TA X REFUND AFTER REJECTING BOOKS OF ACCOUNT RS. 1,67,747/-. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS ERRED MAKING ADDITION OF PURCHASES BY RS. 47,279/-. I.T.A. NOS.703 TO 704/LKW/2016 ASSESSMENT YEARS:2011-12 TO 2012-13 3 3. AT THE OUTSET, THE LEARNED AR STARTED WITH APPEA LS IN ITA NO. 703 AND 704/LKW/2016, WHEREIN THE COMMON ISSUES WERE INVOLV ED. THE LEARNED A.R. SUBMITTED THAT IN THESE CASES, THE ASSESSING OFFICE R HAD REJECTED THE BOOKS OF ACCOUNT BY INVOKING THE PROVISIONS OF SECTION 14 5(3) OF THE ACT AND HAD MADE AD-HOC ADDITION OF RS.3,00,000/- AND RS.3,50,0 00/- RESPECTIVELY. THE LEARNED A.R. SUBMITTED THAT AFTER REJECTION OF BOOK S OF ACCOUNTS, THE ASSESSING OFFICER AGAIN RELIED ON THOSE BOOKS OF AC COUNTS AND HAD MADE FURTHER ADDITIONS OUT OF EXPENSES AND INCOME. THE L EARNED A.R. SUBMITTED THAT ONCE THE ADDITION HAS BEEN MADE BY REJECTING T HE BOOKS OF ACCOUNT THE SAME BOOKS OF ACCOUNT CANNOT BE RELIED ON BY THE AS SESSING OFFICER FOR MAKING FURTHER ADDITIONS BASED ON THE SAME BOOKS OF ACCOUNT AND IN THIS RESPECT RELIED ON THE JUDGMENT OF HON'BLE ANDHRA PR ADESH HIGH COURT IN THE CASE OF INDWELL CONSTRUCTIONS VS. CIT REPORTED IN 2 32 ITR 776 (A.P.). THE LEARNED A.R. FURTHER RELIED ON AN ORDER OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. BANWARI LAL BANSHIDHAR REPORTED IN 229 ITR 229(ALL.). 4. THE LEARNED D.R. ON THE OTHER HAND ARGUED THAT T HE ASSESSING OFFICER HAD REJECTED TRADING ACCOUNT AND HAD MADE ADDITIONS TO GROSS PROFIT ONLY AND FURTHER ADDITIONS WERE MADE OUT OF EXPENSES AND THEREFORE, THE LEARNED CIT(A) HAS RIGHTLY UPHELD THE ADDITIONS. 5. ARGUING APPEAL IN ITA NO.741/LKW/2016, THE LEARN ED A.R. SUBMITTED THAT IN THIS CASE, THE ASSESSING OFFICER HAD MADE A DDITION TO THE GROSS PROFIT ON AD-HOC BASIS BY HOLDING THAT GROSS PROFIT RATE A S DECLARED IN THIS YEAR WAS LOWER THAN THE DECLARED IN THE EARLIER YEAR AND IN THIS RESPECT OUR ATTENTION WAS INVITED TO PARA 2 OF THE ASSESSMENT ORDER. THE LEARNED A.R. SUBMITTED THAT SIMILAR ADDITION WAS MADE IN THE CASE OF ASSES SEE ITSELF IN A.Y. 2012-13 AND THE HON'BLE TRIBUNAL VIDE ORDER DATED 08.01.201 8 IN ITA NO.338/LKW/2016 HAD ALLOWED THE APPEAL OF THE ASSES SEE AND IN THIS RESPECT OUR SPECIFIC ATTENTION WAS INVITED TO PARA 13 OF THE ORDER. THE LEARNED A.R. SUBMITTED THAT IN A.Y. 2012-13, THE G. P. RATE DECLARED BY THE ASSESSEE WAS 11.59% AGAINST WHICH THE ASSESSING OFF ICER HAD APPLIED RATE I.T.A. NOS.703 TO 704/LKW/2016 ASSESSMENT YEARS:2011-12 TO 2012-13 4 OF 12.50%. IT WAS FURTHER SUBMITTED THAT IN THE PRE SENT YEAR ALSO THE ASSESSEE HAD DECLARED GROSS PROFIT RATE OF 11.60% A ND THE ASSESSING OFFICER HAD APPLIED RATE OF 12.5%. IT WAS SUBMITTED THAT NO SPECIFIC DEFECT WAS POINTED OUT IN THE BOOKS OF ACCOUNT AND THEREFORE, ALSO THE DISALLOWANCE WAS NOT WARRANTED. REGARDING GROUND NOS. 2 AND 3, T HE LEARNED A.R. SUBMITTED THAT THESE MAY BE DISMISSED AS NOT PRESSE D. 6. THE LEARNED D.R. SUBMITTED THAT THE ASSESSEE HAD NOT PRODUCED SALES REGISTER, STOCK REGISTER/SALES BILLS AND VOUCHERS E TC. AND THEREFORE, THE ASSESSING OFFICER HAD APPLIED HIGHER RATE OF GROSS PROFIT. THE LEARNED A.R. IN THE REJOINDER SUBMITTED THAT IT IS AN ACCEPTED P RACTICE IN THE TRADE OF LIQUOR THAT NO CASH MEMOS ARE MADE AND SALES AND PU RCHASE ARE GOVERNED BY THE EXCISE DEPARTMENT AND THE PURCHASES RATES AN D SALES RATES ARE ALSO FIXED BY THE GOVERNMENT AND ASSESSEE CANNOT DEVIATE FROM SUCH RECORDS. 7. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT AS REGARDS APPEAL IN ITA NOS. 703 AND 704/LKW/2016, THE ASSESSEE DURING ASSESSMENT PROCEE DINGS HAD HIMSELF AGREED FOR ADDITION OF RS.3,00,000/- AND RS.3,50,00 0/- RESPECTIVELY. AN ASSESSING OFFICER HAD MADE THE ADDITIONS AFTER REJE CTION OF BOOKS OF ACCOUNT U/S 145(3) OF THE ACT. THE AGREED ADDITIONS WERE MA DE BY THE ASSESSING OFFICER TO COVER ANY LEAKAGE OF REVENUE IN VIEW OF CERTAIN DEFECTS IN THE BOOKS OF ACCOUNT. THEREFORE, AGAIN ADDITIONS RELYIN G ON THE SAME BOOKS OF ACCOUNT ARE NOT SUSTAINABLE IN LAW AS HELD BY THE H ON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF INDWELL CONSTRUCTIONS (SU PRA). THE RELEVANT PART OF THE ORDER OF THE HON'BLE HIGH COURT IS REPRODUCED B ELOW: 3. LEARNED COUNSEL FOR THE ASSESSEE RELYING ON A D ECISION OF THIS COURT IN MADDI SUDARSANAM OIL MILLS CO. V. CIT [1959] 37 ITR 369 SUBMITTED THAT WHERE THE BOOKS OF ACCOUNT HAVE BEEN REJECTED, THE REVENUE CANNOT RELY ON THE SAME BOOKS FOR ADDITION OF CASH CREDITS. IN T HAT CASE CERTAIN CASH CREDITS WERE ADDED BACK AND THIS COURT HELD THAT AF TER APPLYING A FLAT RATE TO COMPUTE THE GROSS PROFIT, THE REJECTED BOOKS CAN NOT BE RELIED UPON FOR ADDING UNEXPLAINED CASH CREDITS. LEARNED STANDING C OUNSEL FOR THE REVENUE, HOWEVER, SUBMITTED THAT THE RATIONALE OF T HE DECISION OF THE I.T.A. NOS.703 TO 704/LKW/2016 ASSESSMENT YEARS:2011-12 TO 2012-13 5 SPECIAL BENCH OF THE TRIBUNAL WAS THAT THERE WAS A BIG DIFFERENCE BETWEEN EARNING PROFIT WITH OWN FUNDS AND EARNING P ROFIT WITH BORROWED CAPITAL AND WHEN THE PROFIT WAS ESTIMATED AT A NORM AL RATE, IT SHOULD BE ASSUMED THAT IT WAS AFTER PROVIDING FOR ALL OUTGOIN GS AS COULD BE UNDERSTOOD IN A COMMERCIAL PROFIT INCLUDING INTERES T PAYMENT ON BORROWED CAPITAL. IT WAS SUBMITTED THAT IN THE CASE OF A FIRM WHICH HAS BORROWED CAPITAL FROM ITS OWN PARTNERS, THE PROVISI ONS OF SECTION 40(B) APPLY AS IT IS REGARDED AS PAYMENT OF INTEREST TO O NESELF AND SUCH DEDUCTION HAS TO BE DISALLOWED. ON THIS BASIS, THE SPECIAL BENCH UPHELD THE ADDITION OF INTEREST PAID TO THE PARTNERS EVEN AFTER ASSUMING THE NET PROFIT. HE SUBMITTED THAT THIS MODIFICATION OF THE NET PROFIT WITH REFERENCE TO THE PROVISIONS OF SECTION 40(B) WAS JUSTIFIED AN D HENCE THE QUESTION SHOULD BE ANSWERED IN THE AFFIRMATIVE. 4. THE PATTERN OF ASSESSMENT UNDER THE INCOME TAX AC T IS GIVEN BY SECTION 29 WHICH STATES THAT THE INCOME FROM PROFIT S AND GAINS OF BUSINESS SHALL BE COMPUTED IN ACCORDANCE WITH THE P ROVISIONS CONTAINED IN SECTIONS 30 TO 43D. SECTION 40 PROVIDES FOR CERTAIN DISALLOW ANCES IN CERTAIN CASES NOTWITHSTANDING THAT THOSE AMOUNTS AR E ALLOWED GENERALLY UNDER OTHER SECTIONS. THE COMPUTATION UNDER SECTION 29 IS TO BE MADE UNDER SECTION 145 ON THE BASIS OF THE BOOKS REGULAR LY MAINTAINED BY THE ASSES-SEE. IF THOSE BOOKS ARE NOT CORRECT OR COMPLET E, THE INCOME-TAX OFFICER MAY REJECT THOSE BOOKS AND ESTIMATE THE INC OME TO THE BEST OF HIS JUDGMENT. WHEN SUCH AN ESTIMATE IS MADE IT IS IN SU BSTITUTION OF THE INCOME THAT IS TO BE COMPUTED UNDER SECTION 29. IN OTHER WORDS, ALL THE DEDUCTIONS WHICH ARE REFERRED TO UNDER SECTION 29 A RE DEEMED TO HAVE BEEN TAKEN INTO ACCOUNT WHILE MAKING SUCH AN ESTIMA TE. THIS WILL ALSO MEAN THAT THE EMBARGO PLACED IN SECTION 40 IS ALSO TAKEN INTO ACCOUNT. 5. NO DOUBT THERE IS A BIG DIFFERENCE BETWEEN PROFI T EARNED WITH OWN CAPITAL AND PROFIT EARNED WITH BORROWED CAPITAL AND SUCH A DIFFERENCE COULD HAVE BEEN TAKEN INTO ACCOUNT BY THE INCOME-TAX OFFICER WHILE MAKING AN ESTIMATE. IF THE COMMISSIONER HAD SET ASI DE THE ESTIMATE ON THE GROUND THAT THE VITAL FACT THAT THE BUSINESS WA S CARRIED ON WITH OWN CAPITAL AND NOT WITH BORROWED CAPITAL HAS BEEN IGNO RED BY THE INCOME- TAX OFFICER, THERE MAY NOT HAVE BEEN ANY DIFFICULTY IN UPHOLDING THAT ORDER. BUT, WHEN HE PROPOSES TO ADD BACK AN EXACT I TEM IN THE PROFIT AND LOSS ACCOUNT, HE WAS RELYING ON THE REJECTED BOOKS WHICH HE COULD NOT DO AS HELD BY THE BENCH OF THIS COURT IN MADDI SUDARSA NAM OIL MILLS CO. V. CIT [1959] 37 ITR 369. THERE IS ALSO A FURTHER DIFF ICULTY IF SECTION 40, AS ARGUED BY LEARNED COUNSEL, IS TO BE TAKEN INTO ACCO UNT EVEN AFTER MAKING AN ESTIMATE. WHEN THERE ARE CERTAIN OTHER DEDUCTION S WHICH ARE TO BE DISALLOWED SUCH AS WEALTH-TAX PAYMENT IN SECTION 40 , CAN IT BE SAID THAT AFTER MAKING AN ESTIMATE, THE WEALTH-TAX CHARGED IN THE PROFIT AND LOSS ACCOUNT SHOULD AGAIN BE ADDED BACK TO THE PROFIT. T HIS EXAMPLE ILLUSTRATES HOW THE CONTENTION OF THE REVENUE, THAT SECTION 40(B) MAKES A DIFFERENCE IN THE SITUATION, IS UNTENABLE. IN OUR CONSIDERED OPINION, THE I.T.A. NOS.703 TO 704/LKW/2016 ASSESSMENT YEARS:2011-12 TO 2012-13 6 ANSWER TO THE QUESTION HAS TO BE IN THE NEGATIVE AN D IN FAVOUR OF THE ASSESSEE. 8. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE ARE IN AGREEMENT WITH THE ARGUMENTS OF LEARNED A.R. THAT ONCE THE AD DITION HAS BEEN MADE AFTER REJECTION OF BOOKS OF ACCOUNT NO FURTHER ADDI TIONS CAN BE MADE RELYING ON THE SAME BOOKS OF ACCOUNT. HOWEVER, THE LEARNED A.R. AGREED THAT IN RESPECT OF AGREED ADDITION OF RS.3,00,000/- AND RS. 3,50,000/- HE DOES NOT HAVE ANYTHING TO SAY. IN VIEW OF THE ABOVE, GROUND NO.1 IN BOTH THE APPEALS IN ITA NOS. 703 AND 704/LKW/2016 ARE DISMIS SED, WHEREAS GROUND NO.3 TO 6 IN ITA NO.703/LKW/2016 AND GROUND NOS. 2 TO 4 IN ITA NO. 704/LKW/2016 ARE ALLOWED. IN VIEW OF ABOVE, THE APP EALS IN ITA NO. 703 AND 704/LKW/2016 ARE PARTLY ALLOWED. 9. NOW COMING TO ITA NO.741/LKW/2016, WE FIND THAT THE ASSESSING OFFICER IN THIS CASE OBSERVED THAT GROSS PROFIT RAT E HAS COME DOWN 11.60% FROM 12.34% AND THEREFORE HE REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE AND APPLIED GROSS PROFIT RATE OF 12.50%. W E FIND THAT DURING A.Y. 2012-13 IN THE CASE OF ASSESSEE ITSELF, THE ASSESSI NG OFFICER HAD REJECTED THE BOOKS OF ACCOUNTS AND HAD APPLIED GROSS PROFIT RATE OF 12.50% AS AGAINST 11.59% DECLARED BY THE ASSESSEE. THE ASSESSEE VIDE GROUNDS NO. 1 AND 2 IN A.Y. 2012-13 HAD AGITATED REJECTION OF BOOKS OF ACCOUNT AND APPLICATION OF HIGHER G.P. RATE AND THE HON'BLE TRIBUNAL HAD AL LOWED GROUND NO.1 AND 2 BY HOLDING AS UNDER: 9. WE HAVE PERUSED THE CASE RECORD, HEARD THE RIVAL CONTENTIONS AND CONSIDERED THE JUDICIAL PRONOUNCEMENTS PLACED B EFORE US. WE FIND THAT CASH BOOK AND LEDGER WERE PRODUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AND THIS FACT IS NOT D ISPUTED BY THE DEPARTMENT, AS IT IS ON RECORD. ALL THE PURCHASE B ILLS ALONG WITH TCS CERTIFICATES IN SUPPORT OF PURCHASES MADE BY TH E ASSESSEE WERE ALSO PRODUCED BEFORE THE ASSESSING OFFICER. DAY-TO -DAY SALES MADE AND ACCOUNTED FOR IN THE CASH BOOK AT THE END OF TH E DAY WERE ALSO BEFORE THE DEPARTMENT AND HAS PLACED BEFORE US IN T HE PAPER BOOK. 10. IN THE CASE OF HEM RAJ VS. ACIT (SUPRA) ALSO, A SSESSEE WAS ENGAGED IN THE BUSINESS OF LIQUOR AND SALES WERE DO NE IN CASH. THE I.T.A. NOS.703 TO 704/LKW/2016 ASSESSMENT YEARS:2011-12 TO 2012-13 7 ASSESSING OFFICER HAS REJECTED THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE ON THE GROUND THAT ASSESSEE HAS NOT MA INTAINED DAY- TO-DAY STOCK REGISTER AND SALES RECORD. IT WAS HEL D BY THE CO- ORDINATE ITAT CHANDIGARH BENCH THAT ALL OVER THE CO UNTRY IN LIQUOR TRADE, IT WAS THE NORMAL PRACTICE OF NOT ISSUING BI LLS FOR EVERY SALE AND SALES ARE RECORDED ON THE BASIS OF DAILY STATEM ENTS. THE ASSESSING OFFICER HAS NOT POINTED OUT ANY DISCREPAN CY IN THE QUANTITATIVE DETAILS OF PURCHASE OR SALES. IT IS A LSO THE CASE OF THE ASSESSEE THAT SALE PRICE IS DISPLAYED AT THE SHOP A ND THERE CANNOT BE ANY VARIANCE IN THE PRICE SO DISPLAYED. THE PUR CHASES MADE BY THE ASSESSEE WERE EVEN DULY SUPPORTED BY PROPER VOU CHERS AND REGULATED BY THE EXCISE AUTHORITIES AND PAYMENT OF LIQUOR IS THROUGH GOVERNMENT ON THE BASIS OF AUCTION CONDUCTE D BY THE GOVERNMENT. THE NATURE OF ASSESSEES BUSINESS IS S UCH THAT IT CANNOT MAINTAIN PROPER SALE BILLS. THEREFORE, IT W AS HELD BY THE CO- ORDINATE ITAT BENCH THAT MERELY BECAUSE DAY-TO-DAY SALE BILLS AND VOUCHERS WERE NOT AVAILABLE, IT CANNOT BE A GROUND FOR REJECTION OF THE BOOKS OF ACCOUNT AND THAT THE RESULTS DECLARED BY THE ASSESSEE SHOULD BE ACCEPTED. 11. IN THE CASE OF ITO, RANGE 3(1), GWALIOR VS. LAX MI NARAIN RAMSWAROOP SHINHARE (SUPRA), THE ASSESSEE WAS ENGAG ED IN THE BUSINESS OF TRADING IN COUNTRY LIQUOR AND IMFL AND THE ASSESSING OFFICER REJECTED THE BOOK RESULTS OF THE ASSESSEE O N THE GROUND THAT ALL THE SALES WERE MADE IN CASH WITHOUT PROPER VOUC HERS SUPPORTING THE SALES. IN THIS CASE, IT WAS HELD BY THE CO-ORD INATE ITAT AGRA BENCH THAT WHEN THE BOOKS OF ACCOUNT WERE PRODUCED BEFORE THE DEPARTMENT AND THERE IS NO SIGNIFICANT DEFECT IN TH E BOOKS OF ACCOUNT AND IN THE FACTUAL DETAILS OF THE CASE, THE GROSS PROFIT RATE DECLARED BY THE ASSESSEE HAS TO BE ACCEPTED. 12. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CA SE OF CIT VS. PRAYAG WINES (SUPRA) HAS HELD THAT IT IS NOT NECESS ARY THAT CASH MEMO IS REQUIRED TO BE ISSUED FOR EACH AND EVERY SA LE AND THE BOOKS OF ACCOUNT CANNOT BE REJECTED ON THE VERY BAS IS THAT ONLY ONE CONSOLIDATED CASH MEMO WAS ISSUED AT THE END OF THE DAY AND THAT THERE WERE NO CASH MEMO FOR EACH AND EVERY SALES. THE CRUX OF THE DECISION WAS THAT IF THE CONSOLIDATED SALE FIGU RE IS GIVEN IN THE SINGLE STATEMENT IN THE FORM OF CASH BOOK WHERE DAY -TO-DAY SALES ARE RECORDED, IN SUCH CIRCUMSTANCES FOR EVERY SALES CASH MEMO IS NOT REQUIRED. 13. WE FIND IN THE INSTANT CASE OF THE ASSESSEE, CA SH BOOK AND LEDGER WERE WITH THE DEPARTMENT. THE PURCHASE BILLS ALONG WITH TCS CERTIFICATES WERE ALSO PRODUCED. THE SELLING PR ICE WAS ALSO DISPLAYED IN FRONT OF EVERY SHOP OF THE ASSESSEE. ALL THE PURCHASES I.T.A. NOS.703 TO 704/LKW/2016 ASSESSMENT YEARS:2011-12 TO 2012-13 8 ARE DONE BY THE ASSESSEE ON THE BASIS OF LICENSE FE ES AND TCS CERTIFICATES, WHICH WERE ALSO NOT DISPUTED BY THE D EPARTMENT. IT IS ALSO THE PREVAILING PRACTICE ALL OVER THE COUNTRY T HAT NO CASH MEMO IS ISSUED FOR DAY-TO-DAY SALES AND AS SUBMITTED BY THE ASSESSEE, TWO MODEL SHOPS DO NOT HAVE ANY SITTING AREA ATTACH ED WITH THE SHOPS. NEITHER THE ASSESSING OFFICER NOR THE LD. CI T(A) HAS CONDUCTED ANY INDEPENDENT ENQUIRY REGARDING THE SAM E AND JUST ON THE BASIS OF GUESS WORK HAS OBSERVED THAT ASSESSEE IS NOT BRINGING OUT FULL PARTICULARS. EVEN THE JUDICIAL PRONOUNCEM ENTS ARE CLEAR ON THE FACTS THAT IN THE NATURE OF TRADE AS LIKE ASSES SEE, CASH MEMOS FOR DAY-TO-DAY SALES ARE NOT REQUIRED AND THAT A CO NSOLIDATED ENTRY IN THE CASH BOOK ALONG WITH RELEVANT DOCUMENTS OF P URCHASE OF LIQUOR ARE SUFFICIENT TO PROVE THE GENUINENESS. IN THIS VIEW OF THE MATTER, WE HOLD THAT THE LD. CIT(A) WAS NOT JUSTIFI ED IN CONFIRMING THE REJECTION OF THE BOOKS OF ACCOUNT AND ADOPTING THE G.P. RATE ON THE HIGHER SIDE AND, THEREFORE, WE SET ASIDE THE OR DER OF THE LD. CIT(A) ON THIS ISSUE AND ALLOW GROUNDS NO.1 & 2 OF THE APPEAL OF THE ASSESSEE. 10. RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNA L IN THE CASE OF ASSESSEE ITSELF, WE ALLOW THE GROUND NO. 1 OF THE A PPEAL. THE GROUNDS NO. 2 AND 3 WERE NOT PRESSED BY THE ASSESSEE, THEREFORE, THESE GROUNDS ARE DISMISSED AS NOT PRESSED. 11. IN NUTSHELL, THE APPEAL IN ITA NO. 741/LKW/2016 IS PARTLY ALLOWED. 12. IN THE RESULT, APPEALS OF THE ASSESSEE ARE PART LY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 24/08/2018) SD/. SD/. (PARTHA SARATHI CHAUDHURY) ( T. S . KAPOOR ) JUDICIAL MEMBER A CCOUNTANT MEMBER DATED:24/08/2018 AKS/- COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT . REGISTRAR