Appeal details
Counselvise Citation
7123114 RSA 2002
Assessee PAN
Bench
Appeal Number
Duration Of Justice
12 year(s) 3 month(s) 10 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
30-05-2014
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
Not Allotted
Assessment Year
1998-1999
Appeal Filed On
18-02-2002
Judgement Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI RAJ PAL YADAV AND SHRI R.C. SHARMA) ITA NO. 71/JP/2002 ASSESSMENT YEAR : 1998-99 THE ITO VS. M/S. BANA ALI GIRDHARI SINGH & PARTY WARD- 4(2), JAIPUR (UDAIPUR WATI GROUP), JAIPUR (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI D.C. SHARMA ASSESSEE BY : SHRI P.C. PARWAL DATE OF HEARING: 20-05-2014 DATE OF PRONOUNCEMENT: 30-05-2014 ORDER PER R.C. SHARMA, AM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST ORD ER OF THE LD. CIT(A) DATED 10-12-2001 FOR THE ASSESSMENT YEAR 1998-99, I N THE MATTER OF ORDER PASSED U/S 143(3) OF THE I.T. ACT, 1961. 2.1 AT THE OUTSET, IT IS BEING BROUGHT ON RECORD TH AT THIS APPEAL WAS DECIDED BY THE TRIBUNAL VIDE ITS ORDER DATED 31-03- 2005. BOTH THE ASSESSEE AND REVENUE APPROACHED THE HON'BLE HIGH COURT, AND THE HON'BLE HIGH COURT VIDE ITS ORDER DATED 21-01-2014 SET ASIDE THE ORDER OF THE TRIBUNAL FOR DECIDING AFRESH AND DENOVO IN ACCORDANCE WITH LAW. THE HON'BLE HIGH COURT HAS ALSO DIRECTED ITAT TO DECIDE THESE APPEALS EXPE DITIOUSLY NOT LATER THAN 2 06 MONTHS FROM THE DATE PARTIES ARE CALLED TO PUT T HEIR APPEARANCE BEFORE ITAT. IN ACCORDANCE WITH DIRECTION OF HON'BLE HIGH COURT, THESE APPEALS WERE AGAIN HEARD ON MERIT AND ARE DECIDED AFRESH IN THE FOLLOWING MANNER. 2.2 IN THIS APPEAL, THE REVENUE IS AGGRIEVED FOR DE LETION OF ADDITION MADE BY THE AO BY ESTIMATING THE SALES AT HIGHER FIGURE AS WELL AS BY ESTIMATING THE PROFIT RATE AT 14.5%. 2.3 THE RIVAL CONTENTIONS HAVE BEEN HEARD AND RECOR DS PERUSED. THE FACTS IN BRIEF ARE THAT THE ASSESSEE WAS AWARDED LICENSE FOR RETAIL OFF SALE OF COUNTRY LIQUOR, IMFL/BEER AND BEER UNDER RULE 3-A O F RAJASTHAN FOREIGN LIQUOR (GRANT OF WHOLESALE AND RETAIL-OFF LICENSE) RULES, 1982 UNDER EXCLUSIVE PRIVILEGE SYSTEM. THE ASSESSEE WAS AWARDE D LIQUOR CONTRACT FOR THE FINANCIAL YEARS 1997-98 AND 1998-99 FOR UDAIPURWATI GROUP OF SHOPS FOR THE FOLLOWING AMOUNTS I.E. IT WAS REQUIRED TO LIFT COUN TRY LIQUOR, IMFL AND BEER OF FOLLOWING CONTRACTED AMOUNT. KIND OF LIQUOR AMOUNT TERRITORY OF OPERATION COUNTRY LIQUOR 18800000 UDAIPURWATI IMFL 6000000 UDAIPURWATI BEER 701100 UDAIPURWATI TOTAL 25501100 UDAIPURWATI IT HAD SOLD COUNTRY LIQUOR THROUGH 29 OUTLETS AND I MFL/BEER FROM VARIOUS OUTLETS SITUATED IN ITS TERRITORY. IT HAD LIFTED L IQUOR IN QUANTITY AND VALUE AS UNDER:- 3 KIND OF LIQUOR QTY. (BULK LITERS) VALUE SHORTFALL AMOUNT COUNTRY LIQUOR (BOTTLES) KESAR KASTOORI 22.50 10649700 9602828 COUNTRY LIQUOR (POUCHES 40 UP) 5796.48 IMFL/BEER (ENGLISH WINE) 10290930 275460 BEER 1524124 2.4 THE TRADING RESULTS DISCLOSED BY THE ASSESSEE W ERE AS UNDER:- KIND OF LIQUOR TOTAL TURNOVER (RS.) G.P. DISCLOSED SHORTFALL IN LICENSE FEE (RS.) G.P. RATE BEFORE SHORTFALL G.P. RATE AFTER SHORTFALL COUNTRY LIQUOR 26454556 11813876 9602828 44.66% 8.36% IMFL/BEER 13549879 1642275 275460 12.12% 10.09% THE ASSESSEE HAS DISCLOSED NET PROFIT RATE OF 1.66 % ON COMBINED SALES OF RS. 4,00,04,425/- IN COUNTRY LIQUOR, IMFL AND BEER WHOL E SALE AND RETAIL. THE NET PROFIT RATE WHEN COMPARED WITH OTHER WAS FOUND LOW BY AO. ACCORDINGLY TRADING ADDITION OF RS. 9,11,190/- IN C OUNTRY LIQUOR AND RS. 3,77,070/- IN IMFL/BEER WAS MADE BY AO. 2.5 BY IMPUGNED ORDER, THE LD. CIT(A) DELETED THE A DDITION OF RS. 11,38,260/- OUT OF TOTAL ADDITION OF RS. 9,11,190/- UNDER THE HEAD OF COUNTRY LIQUOR AND RS. 3,77,070/- UNDER THE HEAD IMFL/BEE R RESPECTIVELY. THE PRECISE OBSERVATION OF THE LD. CIT(A) WAS AS UNDER: - 4 2- ESAUS DJ FU/KKZJ.K VF/KDKJH }KJK FN;S X;S RDKS Z DKS RFKK FO}KU VF/KD`R IZFRFU/KH DS RDKSZ DKS LKO/KKUHIWOZD LE>K G SA A DJ FU/KKZJ.K VF/KDKJH US VKNSK DS LKFK ESA FOFHKUU VIHYKFFKZ;KSA DS }KJK NS KH O HKKJR FUFEZR FONSKH EFNJK ,O ACH;J DS EKEYKSA ESA LDY YKHK DH NJ DK RQYUKRED PKVZ YXK;K GSA A BL PKVZ DS VUQLKJ NSKH EFNJK DS O;OLK; ESA LDY YKHK DH NJ ESA U;WURE 6-3 IZFRKR DH NJ ESLLZ GSR JKE VTK;C FLAG ,AM IKVHZ] GUQEKUX<+ }K JK NKKZ;K X;K GS RFKK VF/KDRE NJ 58-55 IZFRKR ESLLZ IQ[KJKT FLLKSFN;K] E QJYH/KJ VKSJ IKVHZ] TKS/KIQJ }KJK NKKZ;K X;K GSA A VKSAD FTYS ESA DJ FU/KKZJ.K O'KZ 1998&99 DS NKSJKU GH ESA CKYKTH OKBUL US NSKH EFNJK DS O;OLK; ESA LDY YKHK DH NJ 32-34 IZFRKR ?KKSF'KR DH GSA A ;G LI'V UGHA GS FD FO}KU DJ FU/KK ZJ.K VF/KDKJH US BU EKEYKSA LS RQYUK DJUS DS I'PKR~ VIHYKFKHZ }KJK ?KKSF'KR LDY YK HK DH NJ 44-66 IZFRKR DH UGHA EKURS GQ;S DJ FU/KKZJ.K DS FY;S LDY YKHK DH NJ 46-5 IZFRKR D;KSA YH GSA BLH IZDKJ HKKJR FUFEZR FONSKH EFNJK O FC;J DS O;OL K; ESA DJ FU/KKZJ.K VF/KDKJH US DBZ EKEYKSA DK GOKYK FN;K GSA FTUESA LDY YKHK DH NJ] VIHYKFKHZ }KJK ?KKSF'KR LDY YKHK DH NJ LS DE GSA A DJ FU/KKZJ.K O'KZ 1998&9 9 ESA GH ESA- VKSEIZDKK ,AM IKVHZ ESA LDY YKHK DH NJ 11-96 IZFRKR] ESA- GJFTUN J FLAG ,AM IKVHZ ESA LDY YKHK DH NJ 8-67 IZFRKR RFKK ESA-CKYKTH OKBUL ESA ; G NJ 9-85 IZFRKR FN[KKBZ X;H GSA A FO}KU DJ FU/KKZJ.K VF/KDKJH US VIHYKFKHZ DS EKEYSA ESA LDY YKHK ESA O`F) DK DKJ.K DSOY {KS= DS YKSXKSA DH LKEKFTD] VKFFKZD O IHUS DH VKNR DKS FN;K GSA A ;G DKSBZ LI'V VK/KKJ UGHA GSA A VIHYKFKHZ DS FO)K U VF/KD`R IZFRFUF/K JH EGSOJH }KJK FN;K X;K RDZ] FD MN;IQJOKVH DS {KS= DH LHEK;SA GFJ;K.KK LS FEYRH GSA] VR% EFNJK DH FCH NJ VUN:UH {KS= LS DE J[KUH GKSRH GSA] MFPR EKYWE NSRK GSA A VR% DJ FU/KKZJ.K VF/KDKJH }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{K IZLRQR FD;K A BLLS DJ FU/KKZJ.K VF/KDKJH US ;G EKUK FD OSRU HKQXRKU DK IWJH RJG LS LR;KIU UGHA GKS LDRK GSA A F DJK;S DS [KPKSZ DS CKJS ESA DJ FU/KKZJ.K VF/KDKJH US CRK;K FD VIHYKFKHZ NQDKU EKFY DKSA D SIRS NSUS ESA VLEFKZ JGS GSA RFKK LACAF/KR OKMPJ HKH IZLRQR UGHA FD;K X;K GS A A BU FLFKFR;KSA DKS NS[KRS GQ;S PWAFD [KPSZ IWJH RJG LS LR;KFIR UGHA GKS LDRS GSA] VR% 10 IZFRKR [KPKSZ DKS EKU; 5 FD;K X;K A OKGUKSA DS [KPSZ DS CKJS ESA DJ FU/KKZJ. K VF/KDKJH US CRK;K FD VIHYKFKHZ YKWX CQD RFKK [KPKSZ DS OKMPJ UGHA IZLRQR DJ LDK BL FY, 20 IZFRKR [KPSZ RFKK GKL DKS O;FDRXR EKURS GQ;S VEKU; FD;K TKRK GSA A 3-1 VIHYKFKHZ DS FO}KU VF/KD`R IZFRFU/KH US RDZ FN; K FD VIHYKFKHZ FDLH HKH O;FDR DH FU;QFDR JKT; VKCDKJH FOHKKX DH LOHD`FR DS FCUK UGHA DJ LDRK GSA A DJ FU/KKZJ.K IZF;K DS NKSJKU LHKH LSYLESU DS FOOJ. K RFKK OSRU HKQXRKU DS FOOJ.K FN;S X;S FKS RFKK UKSDJUKEK TKS FD VKCDKJH FOHK KX DH FYF[KR VUQEFR GS DH IZFR HKH NH XBZ FKH A JH EKGSOJH US VKXS CRK;K FD DJ FU/KKZJ.K IZF;K DS LE; VIHYKFKHZ DK BSDK LEKIR GKS X;K FKK FTLLS LACAF/KR LHKH LSYLESU LS LEIDZ UGHA FD;K TK LDRK FKK A VR% OSRU HKQXRKU ESA LS 10 IZFR KR JKFK VEKU; DJUK MFPR UGHA GSA A BLH IZDKJ NQDKUKSA DS FDJK;S HKQXRK U DS CKJS ESA JH EKGSOJH US CRK;K FD NQDKU HKH JKT; VKCDKJH FOHKKX DH LOHD`FR D S CKN YH TKRH GS FTLDK IW.KZ FOOJ.K DJ FU/KKZJ.K VF/KDKJH DKS FN;K X;K FKK A NQDKUKSA DS EDKU EKFYDKSA DS UKE RFKK EKFLD FDJK;S DS FOOJ.K HKH VF/KDKJH DKS FN ;S TK PQDS GSA FTLESA DJ FU/KKZJ.K VF/KDKJH US HKYH IZDKJ LS UGHA LE>K GSA A OKGU DS [KPKSZ DS CKJS ESA VIHYKFKHZ US DGK FD MLDS O;OLK; ESA DSOY THI DK IZ; KSX GKSRK GS RFKK VIHYKFKHZ LHKH LNL;KSA DS IKL ESA [KQN DH O;FDRXR XKFM+;KA GS A VR% 20 IZFRKR DS O;FDRXR MI;KSX DK IZU UGHA MBRK GSA A 3-2 ESAUS DJ FU/KKZJ.K VF/KDKJH }KJK MBK;S X;S FCUN QVKSA DKS RFKK FO}KU VF/KD`R IZFRFU/KH }KJK FN;S X;S RDKSZ DKS HKYHHKKWAFR LE>K GSA A VIHYKFKHZ DS O;KIKJ DH EK=K DKS NS[KRS GQ;S RFKK OSRU VKSJ NQDKU FDJK;S DH JKF K DKS NS[KRS GQ;S DJ FU/KKZJ.K VF/KDKJH }KJK VEKU; DH TKUS OKYH JKFK VF/KD GSA A PWAFD [KPSZ IWJH RJG LS DJ FU/KKZJ.K VF/KDKJH DS LE{K LR;KFIR UGHA FD;S X;S VR % ;S MFPR GKSXK FD OSRU DS [KPKSZ ESA LS 20]000@& :I;S RFKK FDJK;S DS [KPKSZ E SA LS 10]000@& :I;S VKEU; FD;K TK, A 'KS'K JKFK EKU; DH TKRH GSA A OKGUKSA D S [KPSZ DS IZU IJ OKGU DH IZD`FR DKS NS[KRS GQ;S BUDK O;FDRXR MI;KSX DJ FU/KK ZJ.K VF/KDKJH }KJK VR;F/KD EKUK X;K GSA A ;G MFPR GKSXK FD 20 IZFRKR DS LFKKU IJ 10 IZFRKR [KPSZ VEKU; FD;S TK;S A BL RJG ISVKSY O MHTY [KPKSZ ESA 2]316@ & :I;S FJI;SJ DS [KPKSZ ESA 957@& :I;S VEKU; FD;K TKRK GS VKSJ BRUH GH JKFK ES A NWV IZNKU DH TKRH GSA A 10 IZFRKR DH NJ LS G~KL DKS HKH VEKU; FD;K TKRK GS TKS FD 13]474@& :I;S GKSRH GSA A 'KS'K JKFK DH NWV IZNKU DH TKRH GSA A NWV 60]224 + 21]560 + 2]316 + 957 + 13]474 6 2.6 IT WAS CONTENDED BY THE LD. DR THAT THE ASSESSE E WAS UNABLE TO ESTABLISH THE SALE BY PRODUCING SALE BILLS AND NO S TOCK REGISTER WAS MAINTAINED. UNDER THESE CIRCUMSTANCES, THE AO WAS F AIR TO REJECT THE TRADING RESULTS AND ESTIMATED THE SALES AS WELL AS GROSS PR OFIT EARNED BY THE ASSESSEE ON THE BASIS OF THE COMPARATIVE CASES DEALT WITH IN DETAIL AT PARA 6.1 OF HIS ORDER. AS PER LD. DR WITHOUT GIVING JUSTIFICATION, THE LD. CIT(A) HAS DELETED ADDITION. THEREFORE, THE ORDER OF THE LD. CIT(A) DE SERVES TO BE SET ASIDE AND THE ADDITION MADE BY THE AO SHOULD BE RESTORED. THE DETAILED SUBMISSION OF THE LD. DR WAS AS UNDER:- THE ASSESSES ARE LIQUOR CONTRACTOR & WERE AWARDED LICENCE BY THE STATE OF RAJASTHAN FOR SALE OF IMCL U/R 67(1) & 67(KK) OF THE RAJ. EXCISE RULE, 1956. LIKE-WISE CONTRACTS FOR RETAILS SALES OF BEER AND IMFL WERE AWARDED U/R 3A OF RAJ. FOREIGN LIQUOR SALE LICENCE RULES 1982, FOR DIFFERENT PLACES. THE LICENCES WERE OBTAI NED BY SUCCESSFUL BIDDERS & OTHER THAN THESE LICENSEES , NO OTHER PER SON WAS PERMITTED TO SALE THE LIQUOR. CONTRACTS ARE AWARDED (BY TENDERIN G PROCESS) TO THE REGISTERED CONTRACTOR BY THE EXCISE COMMISSIONER FO R A FISICAL YR. (I.E. 1 ST APRIL TO 31 ST MARCH), IN THE MONTH OF JAN./FEB. OF THE PRECEEDIN G YR. AS PER THE EXCISE RULES, THE LIQUOR CONTRACTORS HAV E TO MAINTAIN COMPLETE STOCK REGISTER AND RECORD OF ALL THEIR EMPLOYEES AS PER NOKARNAMA APPROVED BY THE DISTRICT EXCISE OFFICER . NO OTHER PERSON CAN BE PLACED AS AN EMPLOYEE UNLESS THE DETAILS OF THE EMPLOYEES ARE PROVIDED TO THE DISTRICT EXCISE OFFICER. THE LIQUOR CONTRACTORS HAVE TO SUBMIT MONTHLY ACCOUNT OF RECEIPT OF LIQUOR, SALE T HEREOF AND BALANCE STOCK, AT THE END OF THE MONTH TO THE EXCISE INSPEC TOR BY 5 TH OF THE FOLLOWING MONTH. IN THE CASE OF COUNTRY LIQUOR, THE PURCHASES ARE MADE FROM THE EXCISE DEPARTMENT THROUGH PERMITS. ACCORDI NGLY, PURCHASES OF IMFL AND BEER CAN BE MADE FROM WHOLESALE LICENSEES OF IMFL & DISTILLERIES, RESPECTIVELY, AFTER SEEKING PERMISSIO N OF THE EXCISE DEPARTMENT. THE PURCHASES ARE PROVED BUT IT IS AN A DMITTED FACT THAT THE SALE PRICE IS NOT FIXED AND THE ASSESSES HAVE NEITH ER ISSUED SALE VOUCHERS TO THE PURCHASER NOR MAINTAINED THESE VOUCHERS. 7 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E ASSESSES WERE SPECIFICALLY ASKED TO FURNISH, SHOP-WISE & BRA ND-WISE, DETAILS OF ALL RECEIPTS AND SALE OF IMCL, IMFL AND BEER, WHICH WERE NOT PRODUCED FOR VERIFICATION. VOUCHERS FOR EXPENSES WERE REQUIR ED TO BE PRODUCED. IN SOME CASES SOME VOUCHERS WERE PRODUCED BUT, BY AND LARGE, IN MAJORITY OF CASES EVEN VOUCHERS WERE NOT PRODUCED. THE ASSESSES WERE ALSO REQUIRED TO PRODUCE THE DETAILS OF SALE O F BOTTLES AND BARDANA WHICH TOO WERE NOT PROVIDED AND A LUMPSUM A MOUNT WAS CREDITED ON ACCOUNT OF SUCH SALES. THE SAME WERE NO T OPEN TO VERIFICATION. DETAILS OF PURCHASES, BEING REGULATED AND AS PER THE GUIDELINES OF THE EXCISE DEPARTMENT, WERE PRODUCED BUT SALE VOUCHERS, WERE NOT PRODUCED FOR VERIFICATION. THE A SSESSING OFFICERS WERE OF THE VIEW THAT IN THE ABSENCE OF SALE VOUCHE RS, THE ASSESSES ARE AT LIBERTY TO CHARGE SELLING PRICE AS PER THEIR OWN SWEET WILL (AS THE SALES PRICES ARE NOT FIXED). SINCE THE ASSESSES HAD MONOPOLY AND HAVE EXCLUSIVE JURISDICTION TO SALE GOODS IN THE AR EA/DISTRICT, THEY COULD CHARGE ANY AMOUNT. WHAT AMOUNT WAS ACTUALLY CHARGED BY THE ASSESSES WAS NOT KNOWN SINCE SALES WERE NOT OPEN TO VERIFICATION. THE AOS WAS OF VIEW THAT IN THE LIGHT OF THESE DEFICIE NCIES THE BOOKS OF ACCOUNTS ARE LIABLE TO BE REJECTED U/S 145(3) OF THE IT ACT. IN ADDITION TO ABOVE, THE AOS INTER ALIA, HAVE ALSO NOTICED THE F OLLOWING DEFECTS:- I. SALES BILLS ARE NOT MAINTAINED HENCE SALE RATES & QUANTUM OF SALES/T.O. NOT OPEN TO VERIFICATION. AUDITORS IN TH EIR AUDIT REPORT HAVE ALSO OBSERVED THESE DEFECTS. II. VOUCHERS FOR VARIOUS EXPENSES NOT PROPERLY MAIN TAINED HENCE GENUINENESS /REASONABLENESS OF VARIOUS EXPENSES WAS NOT OPEN TO VERIFICATION. THE SAME HAVE BEEN POINTED OUT BY THE AUDITORS. III. STOCK/SALES REGISTER NOT MAINTAINED (HENCE NOT OPEN TO VERIFICATION) IN SPITE OF THE FACT THAT THE SAME WAS MANDATORY, A S PER EXCISE DEPTT. IV. SEPARATE TRADING ACCOUNTS FOR CL/IMFL/BEER NOT MAINTAINED. V. ORIGINAL DOCUMENTS RELATED TO DAILY SALES HAVE B EEN DESTROYED, INTENTIONALLY, TO AVOID VERIFICATION, FOR THE REASO NS WELL KNOWN TO THE ASSESSES. 3. ON THE OTHER HAND THE ASSESSES HAVE CLAIMED THA T ALL THE PURCHASES WERE VOUCHED AND VERIFIABLE AND THEY HAVE PRODUCED THE RELEVANT PURCHASES VOUCHERS/PERMITS OF THE PURCHASE S OF THE LIQUOR, BUT IN SO FAR AS THE SALE BILLS ARE CONCERNED, IT WAS SUBM ITTED THAT SINCE THE QUANTUM OF LIQUOR IS SO SMALL, IN THE CASE OF IMCL, THE SAME IS BEING SOLD IN POUCHES AND IMFL IN SMALL BOTTLES, WERE OF LOW RATE, THEREFORE, IT WAS NOT PRACTICALLY POSSIBLE TO MAINTAIN THE SALE VOUCH ERS. IT WAS FURTHER SUBMITTED THAT IN THIS PARTICULAR TRADE THE CUSTOME RS NEVER LIKE TO DISCLOSE 8 THEIR IDENTITY AND THEREFORE, EVEN IF THE SALE VOU CHER IS MAINTAINED, NAME OF RECIPIENT/NAME OF PURCHASERS WILL HAVE TO BE LEF T BLANK. HOWEVER, IT WAS SUBMITTED THAT THE PURCHASES ARE ENTIRELY VOUCHED A ND WHEN PURCHASES ARE ENTIRELY VOUCHED, THEN THE CONSEQUENTIAL SALE V ERSION OUGHT TO HAVE BEEN ACCEPTED AS THE SALE WAS OUT OF THE VERY GOODS PURCHASES BY THE ASSESSEES. IT WAS ALSO SUBMITTED BY THE ASSESSES THAT ALL THE DETAILS, AS DESIRED BY THE EXCISE DEPARTMENT, EXCEPT SALE VOUCH ERS, HAD BEEN MAINTAINED AND ALL THE BOOKS OF ACCOUNTS AND SUPPOR TING VOUCHERS WERE GENERALLY PRODUCED AND MAINTAINED IN ACCORDANCE WIT H THE EXCISE RULES. MERELY BECAUSE THE SALE VOUCHERS HAVE NOT BEEN MAIN TAINED, THERE IS NO JUSTIFICATION FOR REJECTING BOOKS OF ACCOUNTS. 4. THE AOS DID NOT CONVINCE WITH ABOVE SUBMISSION OF THE ASESSEES, AS THE AO WAS UNABLE TO DEDUCE THE CORREC T AMOUNT OF SALES/SALE RATES/GP/NP FROM SAID ACCOUNTS. ACCORDIN GLY, THE AO REJECTED THE BOOKS OF ACCOUNT AND TRADING RESULTS, U/S 145(3 ) OF THE IT ACT, BY HOLDING THAT NON-MAINTENANCE OF THE SALE VOUCHERS/S ALE REGISTER IS A MAJOR DEFECT & SALES ARE NOT OPEN TO VERIFICATION. THE AS SESSING OFFICERS, WHILE REJECTING BOOKS OF ACCOUNTS, RELIED UPON VARIOUS JU DGMENTS OF THE APEX COURT & OTHERS COURTS, PARTICULARLY IN THE CASES O F CIT VS. BRITISH PAINTS INDIA LIMITED, (1991) 188 ITR 44, M/S LAL CHAND WAI LATI RAM VS. CIT: (1978) 111 ITR 244 (P&H); M/S BOMBAY CYCLE STORES C O. LTD. VS, CIT: (1958) 33 ITR 13(BOMBAY); SN NAMA SIVAYAM CHETTIER VS, CIT: (1960) 38 ITR 579 (SC); COMMISSIONER OF INCOME-TAX VS. MC MIL LAN & CO.: 38ITR 182(SC) ETC. AFTER REJECTING THE BOOKS OF ACCOUNTS, IN SOME OF T HE CASES, THE AO HAVE ESTIMATED GROSS PROFIT RATE AND IN SOME OF THE CASES NET PROFIT RATE AND IN SOME OF THE CASES ADHOC ESTIMATED ADDITION H AD BEEN MADE. WHILE MAKING SUCH ADDITION, THE AOS HAVE GIVEN THE DETAI LED ANALOGY/FINDINGS/SCIENTIFIC BASIS ETC BY COMPARING SIMILAR TRADE/PAST HISTORY/SALES RATES PREVAILING IN THE OTHER LOCALIT Y ETC & ALSO ALLOWED REASONABLE OPPORTUNITY TO THE ASSESSEE. FOR REJECTI NG BOOKS OF ACCOUNTS U/S 145 (3) & ESTIMATING THE PROFIT, THE AO RELIED ON THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF ABDESH PRATAP SINGH, ABDUL REHMAN & BROS. VS CIT 210ITR406 WHICH INTER ALIA RE AD AS UNDER:- WHERE THE ABSENCE OF STOCK REGISTER, CASH MEMOS I S COUPLED WITH OTHER FACTORS LIKE LACK OF VOUCHERS FO R EXPENSES & LOW PROFIT WHICH GIVE RISE TO A LEGITIMATE INFERENC E THAT ALL IS NOT WELL WITH THE BOOKS OF ACCOUNTS & THE SAME CAN NOT BE RELIED UPON TO ASSESS THE INCOME OR PROFITS. IN SUCH A SI TUATION THE AUTHORITIES WILL BE JUSTIFIED TO REJECT THE BOOKS O F ACCOUNTS. IN VIEW OF THE ABOVE FACTS THE AOS HAVE REJECTED T HE BOOKS OF ACCOUNTS. KEEPING IN MIND THE SALES RATES/GP OF COM PARABLE CASES & PAST HISTORY ETC, AOS HAVE ESTIMATED THE SALES/GP/NP I N THESE LIQUOR CASES. FOR SACK OF CONVENIENCE AND BETTER UNDERSTANDING FO R THE BENCH I AM 9 QUOTING THE FINDING OF THE AO IN THE CASE OF M/S RA JA RAM RAJENDRA BHANDARI & PARTY, WHEREIN THE AO HAD GIVEN SCIENTIF IC WORKING TO ESTIMATE THE SALES AND GP/NP AND THE SAME IS STATED HERE AS UNDER:- MY CONCLUSION OF REJECTION OF BOOKS AND ESTIMATION IS VALID IN EYES OF LAW IN SO FAR AS INTERPRETED AND P RECEDENCE LAID DOWN IN VARIOUS CASE LAWS AS DISCUSSED BELOW:- A) COMMISSIONER OF SALES TAX VS H.ESUF ALI, H.M. A BDUL ALI 90ITR271(1973)(SC):- IN THE CASE OF SUPPRESSED SALES IF IT IS NOT POSSI BLE FOR THE ASSESSING OFFICER TO DETERMINE THE EXACT QUANTITY O F SUPPRESSED SALES. AS SUCH. HE IS EMPOWERED TO ESTIMATE THE SUPPRESSIO N ON THE BASIS OF MATERIAL BEFORE HIM. SO LONG AS THE ESTIMATE WAS NO T ARBITRARY IT CAN NOT BE QUESTIONED. FURTHER, IF THE ESTIMATE BY THE ASSESSING OFFICER IS BONAFIDE ESTIMATE AND BASED ON RATIONAL BASIS THE F ACT THAT THERE IS NO GOOD PROOF IN SUPPORT OF THAT ESTIMATE BECOMES IRRE LEVANT. WHEN THE ESTIMATE IS NOT ARBITRARY OR IRRATIONAL, THE BEST J UDGEMENT ASSESSMENT CAN NOT BE INTERFERED WITH. IT IS THE DUTY OF THE ASSESSEE TO PLACE ALL FACTS TRUTHFULLY BEFORE THE AO. IF HE FAILS TO DO HIS DUTY HE CAN NOT BE AL LOWED TO CALL UPON THE AO TO PROVE CONCLUSIVELY WHAT TURNOVER HE HAS SUPPR ESSED. THAT FACT MUST BE WITHIN HIS PERSONAL KNOWLEDGE. HENCE, THE B URDEN OF PROVING THAT FACT IS ON HIM. IN THE VERY NATURE OF THINGS, THE ESTIMATE MADE MAY BE AN OVER ESTIMATE OR AN UNDER ESTIMATE. BUT THAT IS NO GROUND FOR INTERFERING WITH HIS BEST JUDGEMENT. B) CIT VS LAXMINARAIN BADRIDAS 5 ITR (1937) 170, 180(PC):- IT HAS BEEN HELD THAT IN ALL SUCH ASSESSMENTS THER E MUST NECESSARILY BE GUESS WORK, BUT IT MUST BE HONEST GU ESS WORK AND IN THAT SENSE TOO THE ASSESSMENT MUST BE TO SOME EXTEN T ARBITRARY. C) GANGA RAM BALMOKAND VS CIT 5ITR(1973) LEH. 464:- IT CAN NOT BE DENIED THAT THERE MUST BE SOME MATER IAL BEFORE THE ITO ON WHICH TO BASE HIS ESTIMATE, BUT NOT HARD AND FAST RULES CAN BE LAID DOWN BY THE COURT TO DEFINE WHAT SORT OF MA TERIAL IS REQUIRED ON WHICH HIS ESTIMATE CAN BE FOUNDED. D) RAGHUBAR MANDAL HARIHAR MANDALS CASE 8 STC 770(SC)(1957):- IT HAS BEEN HELD THAT IF THE SALES TAX OFFICER WAS COMPELLED TO ADOPT A RULE OF THUMB WHICH IN A SENSE IS AN ARBITR ARY RULE, THE ASSESSEE WAS ENTIRELY RESPONSIBLE FOR THAT SITUATIO N. 10 THERE ARE SOME MORE ISSUES WHICH ARE IMPORTANT IN T HE MATTER OF ESTIMATION OF PROFITS WHICH REQUIRE FURTHER ELABORA TION I.E. AS TO WHAT COMPELLING FACTORS WERE THERE DUE TO WHICH THE AO W AS LEFT WITH NO CHOICE BUT AS TO ESTIMATION OF INCOME WHICH AS A MA TTER OF FACT WAS SPEARHEADED BY THE ASSESSEE HIMSELF. IT IS CLAIMED BY THE LD. A/R OF THE ASSESSEE THAT T HERE IS A GENERAL PRACTICE IN THE LINE OF TRADE IS THAT 90% ON TOTAL SALES ARE ACHIEVED IN THE EVENING HOURS AND THAT TOO WITHIN A PERIOD OF F EW HOURS WHEN HEAVY RUSH OF CUSTOMER IS GATHERED IN THE RETAIL SH OP AND AT THAT TIME IT IS NEITHER PRACTICAL NOR POSSIBLE TO ISSUE SALE BIL LS NOR IT IS ECONOMICAL TO EMPLOYEE LARGE NUMBER OF EMPLOYEES IN EVERY RETA IL SHOP ONLY FOR THE PURPOSE OF ISSUING THE SALE BILLS. THE ABOVE STATEMENT IS SUPPRESSION VERY, SUGGESTION FALSI (IT MEANS SUPPRESSION OF TRUTH IS EQUIVALENT TO SUGGEST ION OF FALSE HOOD) AND THERE IS NOTHING ON RECORD AS EVIDENCE TO PROVE THE ABOVE FACT. NO SUCH WRITTEN DOCUMENT OR EVIDENCE WAS PRODUCED WHICH IND ICATES THAT 90% OF SALES ARE AFFECTED IN THE EVENING HOURS AND THERE I S ALWAYS HEAVY RUSH IN THOSE HOURS. IT IS ALSO PERTINENT TO MENTION THAT T HE STORY OF FEW HOURS WHICH THE ASSESSEE IS TALKING IS ALSO NOT MENTIONED THAT WHETHER IT IS 8-10, 9-11, 10-11, 7-9, 7.30-9.30PM. IT IS VERY IMPORTANT TO REJECT THIS CLAIM AS NO ORIGINAL DOCUMENTS OF SALES WERE PRODUCED TO IND ICATE THAT MOSTLY THE SALES ARE AFFECTED IN THE LAST HOURS. AS THE SHOP I S OPENED FOR MORE THAN 16-18 HOURS IT IS HARDLY BELIEVABLE THAT THERE WOUL D BE ANY SALES IN THE INITIAL 12 HOURS. THE ASSESSEE TO JUSTIFY HIS CLAIM OF NOT MAINTAINING THE PROPER SALES RECORDS HAS ADVANCED THIS FALSE CLAIM. THESE FACTS SHOWS THAT THE ASSESSEE IS DELIBERATELY INVOLVED IN NOT K EEPING THE PROPER RECORDS OF SALES AND BASELESS CLAIMS ARE ADVANCED. IT IS ALSO CLAIMED BY THE ASSESSEE THAT INTERN AL CHECK AND CONTROL IN EACH RETAIL SHOP IN SUCH A WAY THAT NO LEAKAGE OF A NY SALES OR AMOUNT OF SALES WAS POSSIBLE, THAT THE EXCISE DEPARTMENT ALSO FREQUENTLY CHECK THE SHOPS AND HEAVY PENALTIES IMPOSED IF ANY DISCREPANC Y IS NOTED, THAT THERE IS COMMON RETAILS PRICE LIST WHICH IS DISPLAYED OUT SIDE THE SHOP EVERY DAY. NO EVIDENCE WAS PRODUCED EVER IN SUPPORT OF ANY ITS CLAIM. THEREFORE, IT IS ALSO AN EXAMPLE OF SUPPRESIO VERY, SUGGESTION FALSI WITHOUT PREJUDICE TO THE EARLIER ORDERS IT IS TO ME NTION HERE THAT ESTIMATION OF THE AO MAY BE A GUESS WORK BUT IS NOT ARBITRARY. IT IS BASED ON THE BASIS OF ENQUIRIES MADE BY THE AO AND THE FA CTS AND MATERIAL COLLECTED ON THE RECORD AND FROM THE MARKET. THEREFORE, ESTIMATION OF AO CAN NOT BE SUBSTITUTED BY ANOTHER ESTIMATION, UNLESS CONTRARY EVIDENCE PRODUC ED ON RECORD. IT IS ALSO IMPORTANT TO MENTION HERE THAT EACH CASE IS DIFFERENT. IT IS WELL KNOWN FACT THAT THE EXCISE DEPARTMENT IS EVERY YEAR GIVING CONTRACTS OF LIFTING OF LIQUOR OF PARTICULAR AREAS TO THE HIG HEST BIDDER. EVERY YEARS NEW ASSOCIATION OF PERSONS ARE FLOATED. THERE IS ALWAYS ONE AOP FOR A 11 PARTICULAR FY FOR A PARTICULAR PLACE AND IT IS HARD LY REPEATED AGAIN. THE NAME OF AOP MEMBERS PERSONS, MEMBERS OF AOP, TERRIT ORY OF CONTRACT, AMOUNT OF CONTRACT IS DIFFERENT EVERY YEAR. IN SUCH A POSITION THERE CAN NOT BE COMPARABLE CASE. EACH CASE IS REQUIRED TO BE DEA LT WITH SEPARATELY ON THE BASIS OF FACTS OF THE CASE. THEREFORE, THERE WI LL NOT BE ANY COMPARABLE CASES AT GIVEN POINT OF TIME TO ESTIMATE GP/NP/TO E TC. IN MY OPINION, IF ANY ARGUMENT IS MADE AVAILABLE OF COMPARABLE CASES TO APPLY GP/NP OR TO THAT SHOULD NOT BE ENTER TAINED UNLESS SPECIFIC EVIDENCE ARE PRODUCED ON RECORD. AS A LAW IMPLEMENTING AGENCIES, IT IS DUTY ON MY PA RT TO ALSO EXAMINE IF VIOLATION OF ANY LAW OF LAND IS MADE. NO BODY IS ABOVE LAW AND ASSESSEE CAN NOT BE ALLOWED TO GO SCOT FREE BY REPE ATEDLY AND FREQUENTLY GIVING FALSE STATEMENT NOT BEING INTERROGATED TO TH E HILT. THE ASSESSEE AND THE A/R ARE INDULGING IN EXERCISE OF OBFUSCATION, W HICH IS APPARENT FROM THE FACT THAT MAJORITY OF CASE OF LIQUOR CONTRACTS ARE HANDLED BY ONE PARTICULAR PROFESSIONAL. IT HAS BEEN NOTICED THAT EACH AND EVERY CASE IS DIFFERENT BUT THE ABOVE PARTICULAR PROFESSIONAL IS FILING SIMILAR TYPE OF REPLIES BEFORE THE AO AND THE OTHER APPELLATE AUTHO RITIES. WHEN ALL THE CASES ARE DIFFERENT AND NOT COMPARABLE. THEN HOW CA N THE SAME FACTS AND REPLIES BE APPLIED IN ALL. IT IS ANOTHER EXAMPLE OF SPPRESIO VERY, SUGGESTION FALSI. BASIS OF COMPUTATION :- OF LATE IT WAS NOTICED, THAT IN ALL THE LIQUOR CASE S THE ASSESSING AUTHORITIES WOULD INVARIABLY REJECT THE BOOKS OF AC COUNTS INVOKING THE PROVISIONS OF SECTION 145(3) OF THE I.T. ACT, BUT F OR ESTIMATION OF THE PROFITS THEY RELIED ON VARIOUS INFORMAL INFORMATIONS GATHE RED FROM THE MARKET AND ACCORDINGLY APPLIED THE GP/NP RATE. THIS PRACTICE O F ESTIMATION WAS CONSIDERED BY THE ASSESSES IN THIS LINE OF TRADE TO BE WILD GUESS WORK OF THE AOS AND THE SAME PLEAS WOULD BE TAKEN TO GET AW AY WITH THE ADDITIONS MADE BY THE AOS. BUT THIS TIME A VERY CON CERTED AND SINCERE EFFORT HAS BEEN MADE BY THE TAXING AUTHORITIES OF T HE JAIPUR CHARGE TO BASE THEIR ESTIMATION ON SOME AUTHENTIC AND RELIABL E MATERIAL GATHERED. SO, ACCORDINGLY SURVEY WAS CONDUCTED ON THE VARIOUS LIQUOR SHOPS LOCATED AT JAIPUR ON 21.3.2003. FROM ON THE SPOT VERIFICATI ON OF THOSE SHOPS IT WAS GATHERED THAT EACH SHOP HAD A PRINTED RATE LIST WHI CH WAS AVAILABLE IN REGARD TO ALL THE VARITIES OF CL/IMFL & BEER AT WHI CH THEY WERE SUPPOSED TO BE SOLD. ONE SUCH RATE LIST PERTAINING TO THE PE RIOD BEFORE 20.3.2003(FROM 21.3.2003 THE RATES WERE REDUCED) WA S FOUND BY ONE OF THE AO AND IMPOUNDED. NOW THAT THE RATE LIST WAS FO UND, AT WHICH THE COUNTRY LIQUOR, IMFL AND BEER WERE SOLD, IT WAS REQ UIRED THAT THE PURCHASE PRICE OF THE CORRESPONDING ITEMS/VERITIES OF THE LI QUOR BE KNOWN. SO THAT THE PROFIT MARGIN IN THE CORRESPONDING ITEMS COULD BE WORKED OUT SO AS TO GIVE A SUPPORT TO THE FINDINGS OF THE ESTIMATION OF GROSS PROFIT AND NET PROFIT AS TAKEN BY THE ASSESSING AUTHORITIES. ACCORDINGLY ACCOUNTANT OF THE AOP FIRM SH. NIRANJAN SHARMA WAS CALLED TO PRODUCE THE ORIGINAL BILLS OF PURCHASES OF CL/IMFL AND BEER WHICH WAS PURCHASES B Y THE FIRM. SH. 12 NIRANJAN SHARMA EXPRESSED HIS INABILITY TO PRODUCE THE PURCHASE BILLS OF THE ASSESSEE AOP M/S RAJARAM RAJENDRA BHANDARI & PA RTY SINCE THEY WERE CLAIMED TO BE LYING AT AJMER. HOWEVER, HE PROD UCED THE PURCHASE BILLS OF ANOTHER AOP I.E. NIZAMMUDIN MANIRAM AND PA RTY WHICH OPERATED IN THE AREA OF HANUMANGARH IN THE F.Y. 1999-2000. T HOUGH THE PURCHASE BILLS OF THE ASSESSEE AOP WERE NOT PRODUCED, BUT NE VERTHELESS PURCHASE PRICE IS MORE OR LESS SAME FOR VARIOUS ITEMS IN THE PARTICULAR FINANCIAL YEARS. MOREOVER, IT IS A WORK OF ESTIMATION ON THE PART OF AO FOR WHICH SOME YARDSTICK IS REQUIRED, WHICH IN THIS CASE IS O FFERED BY AOP FIRM OF NIZAMUDIN MANIRAM AND PARTY. ONCE THE PURCHASE PRIC ES OF VARIOUS ITEMS WERE KNOWN THROUGH THE PURCHASE BILLS, CORRESPONDIN G EXCISE DUTY AS PAID BY THE ASSESSEE WAS ADDED SO AS TO ARRIVE AT THE TO TAL COST OF A PARTICULAR ITEM. THEREAFTER ON THE BASIS OF RATE LIST FOUND, C ORRESPONDING SELLING PRICE WAS APPLIED TO EACH OF THE COMMODITY IN ORDER TO FI ND OUT AS TO WHAT EXACTLY THE PROFIT MARGIN WORKS OUT. THEREAFTER CHE CKING THE AVERAGE OF SUCH PROFIT MARGIN CORRESPONDING GP SHALL BE APPLIE D. IN ORDER TO CALCULATE THE EXCISE DUTY, THE METHOD I S AS FOLLOWS (AS PRESCRIBED BY STATE EXCISE DEPARTMENT.):- 1) IN CASE OF IMFL :- THE PAYMENT TOWARDS EXCISE DUTY AS PER THE STATE EXCISE LAWS (F.Y.99-2000) IS @ ` 675 PER BULK LITRE OF IMFL. (I.E. ` 675 FOR 12 BOTTLES) (ONE BULK LITRE MEANS 9 LITRES I.E. 12 BOTTLES OF 7 50 ML EACH) IT, THEREFORE MEANS THAT ON EACH BOTTLE THE EXCISE DUTY PAYABLE IS ` 56.25 ( ` 675/12) 2) IN THE CASE OF BEER :- STRONG BEER ` 117 PER BULK LITRE. THEREFORE ` 8.35 PER BOTTLE OF STRONG BEER. (1 BULK LITRE=9 LITRE WHICH IS =9000ML 1 BEER BOTTLE CONTAINS 650 ML, THEREFORE, 9000 ML B EER IS FILLED IN APPROXIMATELY 14 BOTTLES. (IF ` 117 EXCISE DUTY PAID ON 14 BOTTLES, THEREFORE ON ON E BOTTLE, ` 8.35 IS PAID.) SIMILARLY EXCISE DUTY ON LEDGER BEER IS AS UNDER:- LEDGER BEER ` 78 PER BULK LITRE. THEREFORE ` 5.57 PER BOTTLE OF LEDGER BEER. 3) IN CASE OF COUNTRY LIQUOR :- 85% OF TOTAL ISSUE PRICE A CHART IS PRODUCED BELOW TO ELABORATE ON THE PROFI T MARGIN OF COUNTRY LIQUOR/IMFL AND BEER. 13 S.NO. ITEM PURCHASE PRICE AS PER THE BILLS BROUGHT BY ASSESSEE FOR VERIFICATION. THE PURCHASE PRICE INCLUDE EXCISE DUTY. SALE PRICE AS PER THE RATE LIST FOUND IN THE COURSE OF SURVEY (RATE LIST WAS OF THE PERIOD BEFORE 21.3.03) PROFIT PERCENTAGE 1 COUNTRY LIQUOR (200ML POUCH) ` 2.70/- (AS STATED BY THE ACCOUNTANT NIRANJAN SHARMA ` 25/- 89.2% 2 IMFL ARISTOCRAT PREMIUM WHISKY ` 138.29 ` 230/- 39.8% 3 DIRECTOR SPECIAL WHISKY ` 109.15 ` 180/- 39.36% 4 HAYWARD STRONG RUM ` 95.83 ` 160/- 40% 5 ROYAL CHALLENGE ` 275.41 ` 420/- 34.42% 6 RED KINGHT WHISKY ` 156.08 ` 270/- 42.2% 7 PETER SCOTCH ` 270.83 ` 470/- 42.37% 8 SIGNATURE ` 310.66 ` 470/- 33.9% 9 OLD MONK ` 103.25 ` 190/- 45.65% 10 BAG PIPER RUM ` 108 ` 180/- 40% 11 BEER HAYWARD 500 ` 29.42 ` 50/- 51.16% 12 THUNDER BOLT ` 27.41 ` 50/- 45.18% 13 BULLET ` 27.41 ` 50/- 45.18% THEREFORE, IT IS VERY EVIDENT FROM THE PROFIT MARGI N AS WORKED OUT ABOVE THAT THE COUNTRY LIQUOR HAS A PROFIT MARGIN A ROUND 75% TO 90% , IMFL AND BEER HAS PROFIT MARGIN AROUND ` `` ` 35% TO 50% . THERE MAY BE A DIFFERENCE IN THE PROFIT MARGIN OF EACH PARTY ON AC COUNT OF AREA/LOCATION/POPULATION/DEMAND OF VARIETY/YEAR OF OPERATION ETC BUT MORE OR LESS THE PROFIT MARGIN CAN VARY BETWEEN 2-5%. IN THIS VERY PARTICULAR CASE OF MY ASSESSEE I DECIDE TO TAKE GP IN CASE OF COUNTRY LIQUOR AS 65% AND IN CASE OF IMFL AND BEER AS 35% AND GP OF 5% IN CASE OF WHOLESALE OF IMFL AND BEER. TRADING ACCOUNT (RE CASTED) (BASED ON ABOVE GP RATE ). EXPENDITURE INCOME TO PURCHASE A/C BY SALES ACCOUNT IMFL/BEER (W.S.) ` 18,43,03,959/- IMFL/BEER (WS) ` 19,40,04,167/- IMFL/BEER (RETAIL) ` 39,88,64,950/- IMFL/BEER (RETAIL) ` 61,36,38,384.6/- 14 COUNTRY LIQUOR ` 16,42,50,017/- COUNTRY LIQUOR ` 46,92,85,762.8/- BY CLOSING STOCK IMFL/BEER(WS) ` 16,67,160/- TO EXPENDITURE A/C IMFL/BEER (W.S.) ` 20,18,98,297/- IMFL/BEER (RETAIL) ` 2,61,41,311/- COUNTRY LIQUOR ` 23,39,160/- GROSS PROFIT ` 30,07,97,780/- GRAND TOTAL ` 1,27,85,95,474/- GRAND TOTAL ` 1,27,85,95,474/- P & L ACCOUNT (RECASTED) EXPENDITURE INCOME TO EXPENDITURE A/C ` 21,40,34,922/- BY GROSS PROFIT A/C ` 30,07,97,780/- ALL EXPENSES AS CLAIMED BY THE BY REVENUE A/C ASSESSEE INSURANCE CLAIM ` 27,000/- INTEREST AGAINST FDR ` 9,350/- TO DEPN. ` 15,43,695/- NET PROFIT ` 8,52,55,512.5/- GRAND TOTAL ` 30,08,34,130/- GRAND TOTAL ` 30,08,34,130/- THEREFORE, NET PROFIT OF THE ASSESSEE IS WORKED OUT TO BE ` `` ` 8,52,55,512/- FROM THE ABOVE WORKING OF TO/GP/NP IT IS CRYSTAL CL EARLY THAT THE AO, HAD TAKEN ALL POSSIBLE DUE CARE & ADOPTED SCIENTIFIC ME THODS TO ESTIMATE ACCURATE & REASONABLE TO/GP/NP AFTER COLLECTING THE NECESSARY FACTS & MATERIAL ON RECORD. THESE ADDITIONS WERE CHALLENGED BEFORE THE RESPECTI VE COMMISSIONERS OF INCOME TAX (APPEALS) BY THE ASSESSES, WHO HAVE UPHE LD THE FINDING OF THE ASSESSING OFFICERS ABOUT REJECTION OF BOOKS OF ACCO UNTS UNDER SECTION 145(3) BUT GAVE RELIEF BY REDUCING TRADING ADDITION. IN SOME O F THE CASES, THE CIT(A) RELIED UPON COMPARATIVE CASES OF SIMILARLY SITUATED LIQUOR CONTRACTORS AND PAST HISTORY AND DECIDED THE APPEALS WITHOUT GIVING CLEAR CUT F INDING/BASIS/REASONS BRINGING ANY MATERIAL ON RECORD, FOR REDUCING TRADING ADDITI ON OR UPHOLDING AD HOC 15 ADDITION. THE CITS(A) HAVE NOT APPRECIATED THE FAC TS & FIGURES COLLECTED & FINDING GIVEN BY THE AOS. FORM THE ABOVE FACTS, IT IS NOTICED THAT THE A O HAD PASSED WELL REASONED ORDER AFTER DISCUSSING THE ENTIRE ISSUE AND ALSO BR OUGHT IN MATERIAL ON RECORD, THEREFORE, IT WAS DUTY OF THE CIT(A) TO ADDRESS THE ISSUE IN AN APPROPRIATE MANNER AND NOT IN A SUMMERY OR IN PERFUNCTORY MANNE R. THE CIT(A)S HAVE NOT DISCUSSED THE FACTS OF CASES & SUMMARILY EITHER RED UCED THE ADDITION OR UPHELD THE AD HOC ADDITIONS, WITHOUT GIVING ANY BASIS THER EOF. THE APPELLATE AUTHORITIES SEARCHING OF DEFINIT E EVIDENCE TO TEST THE VALIDITY OF THE ADDITIONS MADE BY THE AO HAS TRANSGRESSED IN TO THE REALM OF INDEFINITENESS FROM THE REALM OF GUESSWORK FOR COMP UTATION OF INCOME, WHERE THE BOOKS OF ACCOUNT OF ASSESSEE HAVE BEEN REJECTED BY THE AO, HOLDING THAT IT IS NOT POSSIBLE TO ASCERTAIN THE TRUE INCOME OF THE ASSESS EE FROM SUCH BOOKS OF ACCOUNT. THE CIT(A) HAS NOT RECORDED ANY SATISFACTO RY FINDING OR REASONING IN RESTRICTING/REDUCING/ESTIMATING LUMP SUM AD HOCK AM OUNT, HENCE, IT IS NOT A SPEAKING ORDER. IT IS WELL SETTLED THAT IN A BEST JUDGMENT ASS ESSMENT THERE IS ALWAYS A CERTAIN DEGREE OF GUESS WORK. THE AUTHORITIES CONCE RNED SHOULD MADE A HONEST AND FAIR ESTIMATE OF THE INCOME EVEN IN A BEST JUDG MENT ASSESSMENT AND SHOULD NOT ACT ARBITRARILY. IT IS EQUALLY TRUE THAT ASSESS EE IS HIMSELF TO BE BLAMED AS HE DID NOT SUBMIT PROPER ACCOUNTS. IT WAS THE DUTY OF THE ASSESSEE TO PLACE ALL FACTS TRUTHFULLY BEFORE THE AO AND IF HE FAILS TO DO HIS DUTY, HE CANNOT BE ALLOWE D TO CALL UPON THE AO TO PROVE CONCLUSIVELY WHAT TURNOVER HE HAS ACTUALLY SUPPRESS ED BUT, AT THE SAME TIME, SEC. 145 OF THE ACT, 1961 CONFERS SUFFICIENT POWERS UPON THE AO TO MAKE SUCH COMPUTATION IN SUCH MANNER AS HE DETERMINES FOR DED UCING THE CORRECT PROFIT AND GAINS. THIS MEANS THAT WHERE ACCOUNTS ARE PREPARED WITHOUT DISCLOSING TRUE AND CORRECT SALE/INCOME, IT IS THE DUTY OF THE AO TO DE TERMINE THE ACTUAL SALES & TAXABLE INCOME BY MAKING SUCH COMPUTATION AS HE THI NKS FIT AND IT IS THEREFORE NOT ONLY THE RIGHT BUT THE DUTY OF THE AO TO ACT IN EXERCISE OF ITS JUDICIOUS DISCRETION WITHIN THE AMBIT OF LAW FOR DETERMINING THE CORRECT TAXABLE INCOME. IN THESE CASES THE AOS HAVE DULY AND HONESTLY DISCHAR GED THEIR DUTIES BY ADOPTING SCIENTIFIC BASIS, AFTER MAKING ENQUIRIES, COLLECTED FACTS & MATERIAL ON RECORD & GATHER NECESSARY INFORMATION, FOR ESTIMATING THE SA LES/TO & GP/NP OF THE ASSESSES, BASED ON COMPARABLE CASES AND PAST HISTOR Y. THEREFORE, ESTIMATION OF THE AO CANT BE SUBSTITUTED BY ANOTHER ESTIMATION, UNLESS CONTRARY EVIDENCES BROUGHT ON RECORD. IT IS ALSO TRUE THAT WHILE DETERMINING THE COR RECT TAXABLE INCOME IT IS ESTIMATE AGAINST ESTIMATION, BUT THAT SHOULD BE SUP PORTED BY SOME JUSTIFICATION WHICH IS INITIAL DUTY CASTE UPON AO AND WHEN THE AP PEALS ARE BEING PREFERRED EITHER BEFORE THE CIT(APPEALS) OR BEFORE THE ITAT W HO IS THE FINAL FACT FINDING AUTHORITY, THE FINDING OF AO COULD NOT ORDINARILY B E DISTURBED EXCEPT UNDER PERVERSITY. IF APPELLATE AUTHORITIES ARE REVERSING THE FINDING OF THE AOS THEN IT IS OBLIGATORY UPON THEM TO DISCUSS FACTUAL FINDINGS AP PRECIATED BY THE AOS. AS PER NORMS, THE FINDING OF THE AOS ORDINARILY NOT BE DI STURBED EXCEPT ON THE GROUND OF PERVERSITY. 16 IT IS THEREFORE, PRAYED THAT THE APPELLATE AUTH ORITIES SHOULD TAKE CORRECT VIEW, KEEPING IN MIND THE FACT THAT THE ASSESSES HA VE NOT MAINTAINED SALES VOUCHERS, EXPENSE VOUCHERS, STOCK REGISTERS ETC, F OR DETERMINING THE ACTUAL SALES & GP/NP, BASED ON THE FACTS OF THE EACH CASE. THE AO/CIT(A) HAVE COME TO A CATEGORICAL FINDIN G AS TO REJECTION OF BOOKS OF ACCOUNTS AND INVOKING OF PROVISIONS OF SECTION 1 45(3), A FARE ESTIMATE WAS REQUIRED TO BE MADE BY THE ASSESSING OFFICER AND IN ALMOST ALL CASES, THE ASSESSING OFFICERS HAVE PASSED WELL REASONED ORDERS AND THE AO HAVE BROUGHT ADEQUATE MATERIAL ON RECORD TO JUSTIFY THE ADDITION S. FURTHER RELIANCE IS PLACED ON VARIOUS CASE LAWS NAMELY DIRECTOR OF INCOME TAX (EX EMPTION) VS. SHIA DAWOODI BOHRA JAMAT (2012) 344 ITR 653 (GUJ), CIT VS. DEEPA K M KOTHARI (2011) 331 ITR 301 (ALLAHABAD), MANGALORE GANESH BEEDI WORKS VS. CIT (2005) 25CC 329, MYSORE & ANR. & JUDGMENT OF THIS COURT REPORTE D IN 199 CTR 422 (RAJ) CIT VS. SUNIL TALWAR MURLIDHAR & PARTY, ETC. IN THE CASE OF CST VS. H.M. ESUFALI H. M. ABDULAL I 90 ITR 271 (SC), THE HONBLE APEX COURT, INTER ALIA HAS OBSERVED AS UNDE R:- THE ASSESSING AUTHORITY WHILE MAKING THE BEST JUD GMENT ASSESSMENT, NO DOUBT, SHOULD ARRIVE AT ITS CONCLUSION WITHOUT A NY BIAS AND ON RATIONAL BASES. THAT AUTHORITY SHOULD NOT BE VINDICTIVE OR CAPRICIO US. IF THE ESTIMATE MADE BY THE ASSESSING AUTHORITY IS A BONA FIDE ESTIMATE AND IS BASED ON A RATIONAL BASIS, THE FACT THAT THERE IS NO GOOD PROOF IN SUPPORT OF THAT ESTIMATE IS IMMATERIAL. PRIMA FACIE, THE ASSESSING AUTHORITY IS THE BEST JUDGE O F THE SITUATION. IT IS HIS BEST JUDGMENT AND NOT OF ANYONE ELSE. THE HIGH COURT CO ULD NOT SUBSTITUTE ITS BEST JUDGMENT FOR THAT OF THE ASSESSING AUTHORITY. IN T HE CASE OF BEST JUDGMENT ASSESSMENTS, THE COURTS WILL HAVE TO FIRST SEE WHET HER THE ACCOUNTS MAINTAINED BY THE ASSESSEE WERE RIGHTLY REJECTED AS UNRELIABLE . IF THEY COME TO THE CONCLUSION THAT THEY WERE RIGHTLY REJECTED, THE NEX T QUESTION THAT ARISES FOR CONSIDERATION IS WHETHER THE BASIS ADOPTED IN ESTIM ATING THE TURNOVER HAS REASONABLE NEXUS WITH THE ESTIMATE MADE. IT THE BAS IS ADOPTED IS HELD TO BE A RELEVANT BASIS EVEN THOUGH THE COURTS MAY THINK THA T IT IS NOT THE MOST APPROPRIATE BASIS, THE ESTIMATE MADE BY THE ASSESSI NG AUTHORITY CANNOT BE DISTURBED. IN THE PRESENT CASE, THERE IS NO DISPUTE THAT THE ASSESSEES ACCOUNTS WERE RIGHTLY DISCARDED. WE DO NOT AGREE WITH THE HI GH COURT THAT IT IS DUTY OF AO TO ADDUCE PROOF IN SUPPORT OF ITS ESTIMATE, THE BAS IS ADOPTED BY THE AO WAS A RELEVANT ONE WHETHER IT WAS THE MOST APPROPRIATE OR NOT. THIS CASE IS SQUARELY APPLICATION & COVERS THE FINDING/ESTIMATION OF TURNOVER/SALE & GP/NP MADE BY THE AOS IN THESE CASES. IN THE CASE OF KACHWALA GEMS VS. JCIT 288 ITR 10 (S C), INTER ALIA HELD AS UNDER:- WHETHER THERE WERE BOGUS PURCHASES OR NOT, IS A FIN DING OF FACT, AND THE COURT CANNOT INTERFERE WITH THE SAME IN THI S APPEAL. AS REGARDS THE REJECTION OF THE BOOKS OF ACCOUNT, COGENT REASO NS HAVE BEEN GIVEN BY THE IT AUTHORITIES FOR DOING SO, AND THERE IS NO REASON TO TAKE A DIFFERENT VIEW. IT IS WELL SETTLED THAT IN A BEST J UDGMENT ASSESSMENT THERE 17 IS ALWAYS A CERTAIN DEGREE OF GUESSWORK. NO DOUBT T HE AUTHORITIES CONCERNED SHOULD TRY TO MAKE AN HONEST AND FAIR EST IMATE OF THE INCOME EVEN IN A BEST JUDGMENT ASSESSMENT, AND SHOULD NOT ACT TOTALLY ARBITRARILY, BUT THERE IS NECESSARILY SOME AMOUNT O F GUESSWORK INVOLVED IN A BEST JUDGMENT ASSESSMENT, AND IT IS THE ASSESS EE HIMSELF WHO IS TO BLAME AS HE DID NOT SUBMIT PROPER ACCOUNTS. THERE W AS NO ARBITRARINESS IN THE PRESENT CASE ON THE PART OF THE IT AUTHORITI ES. IN THE CASE OF CIT VS. BRITISH PAINTS INDIA LTD. 18 8 ITR 44 (SC) THE HONBLE COURT, INTER ALIA HELD AS UNDER:- IT IS NOT ONLY THE RIGHT BUT THE DUTY OF THE AO TO CONSIDER WHETHER OR NOT THE BOOKS DISCLOSED THE TRUE STATE OF ACCOUN TS AND THE CORRECT INCOME CAN BE DEDUCED THERE FROM. IT IS INCORRECT T O SAY, AS CONTENDED ON BEHALF OF THE ASSESSEE, THAT THE OFFICER IS BOUN D TO ACCEPT THE SYSTEM OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE TH E CORRECTNESS OF WHICH HAD NOT BEEN QUESTIONED IN THE PAST. THERE IS NO ESTOPPEL IN THESE MATTERS, AND THE OFFICER IS NOT BOUND BY THE METHOD FOLLOWED IN THE EARLIER YEARS. FROM THE ABOVE FACTS IT IS SEEN THAT THE AO, HAVE R IGHTLY REJECTED INCOMPLETE/UNRELIABLE ACCOUNTS AND HAVE MADE BEST J UDGMENT IN ESTIMATING TO/GP/NP IN THESE CASES, AFTER COLLECTING THE NECES SARY MATERIAL/INFORMATION ON RECORDS. ON THE OTHER HAND, THE CIT(A)S HAVE ALLO WED RELIEF TO THE ASSESSEES WITHOUT APPRECIATING THE FACTS OF THE CASE & FINDIN G GIVEN BY THE AOS. AGAINST THE ORDERS OF THE CIT(A), REVENUE HAS PREFE RRED APPEAL BEFORE ITAT AND IN SOME OF THE CASES, THE ASSESSES HAVE AL SO CHOSEN TO FILE APPEAL. THE ITAT, AFTER HEARING THE PARTIES, AGREED WITH TH E CONTENTION AS TO REJECTION OF THE BOOKS OF ACCOUNTS UNDER SECTION 145(3) OF THE A CT AND IN SOME CASES, EVEN THE COUNSELS FOR THE ASSESSES ADMITTED THAT PROVISI ONS OF SECTION 145 ARE APPLICABLE. HOWEVER, IN SO FAR AS THE ADDITION ON A CCOUNT OF QUANTUM, THE ITAT, DID NOT ADOPT A PARTICULAR YARDSTICK ON ACCOUNT OF THE FACT THAT, DIFFERENT PLACES MAY HAVE DIFFERENT FACTS AND CHOSE TO REDUCE THE G P RATE/NP RATE/ADHOC ADDITION. THE ITAT HAS NEITHER DISCUSSED THE FACTUA L FOUNDATION AND SUBMISSIONS AND BY CRYPTIC ORDER DECIDED THE APPEALS, WITHOUT A PPRECIATING THE FINDINGS OF THE AO. IN VIEW OF THESE FACTS, THE HONBLE HIGH COURT HAS SET ASIDE THE MATTERS BACK TO THE ITAT TO ADJUDICATE ALL THESE CASES AFRESH. K EEPING IN VIEW THE ABOVE DISCUSSION, THE CLEAR CUT/DETAILED FINDINGS GIVEN B Y THE AO, WITH REGARD TO ESTIMATION OF SALES AND GP/NP, MAY PLEASE BE UPHELD AND ORDER OF THE CIT(A), BE SET-ASIDE. 2.7 ON THE OTHER HAND, THE LD. AR CONTENDED THAT WH ILE REJECTING GROSS PROFIT RATE, THE AO HAS REFERRED CASES OF 27 LIQUOR CONTRACTORS AS PER ANNEXURE A OF HIS ORDER. THIS LIST ALSO CONTAINS CA SES OF 08 CONTRACTORS WHO 18 HAVE DECLARED GROSS PROFIT RATE IN COUNTRY LIQUOR L OWER THAN THE GROSS PROFIT RATE DECLARED BY THE ASSESSEE . AS PER LD. AR THE G ROSS PROFIT RATE IN COUNTRY LIQUOR BEFORE SHORTFALL IN THESE 08 CASES RANGES FR OM 6.3% TO 44.59% WHICH IS LOWER THAN THE GROSS PROFIT RATE OF 44.66% DECLA RED BY THE ASSESSEE. OUR ATTENTION WAS ALSO INVITED TOWARDS OTHER LIST OF 06 LIQUOR CONTRACTORS GIVEN BEFORE THE LD. CIT(A) WHEREIN THE GROSS PROFIT RATE DECLARED RANGES FROM 15.45% TO 41.23% AND GROSS PROFIT RATE APPLIED RANG ES FROM 25% TO 45% WHICH IS EVEN LOWER THAN THE GROSS PROFIT RATE OF 4 4.66% DECLARED BY THE ASSESSEE. AS PER LD. AR , THE LD. CIT(A) HAS PARTLY DELETED THE ADDITION AFTER GIVING DUE JUSTIFICATION TO THE CASE AND THE SAME S HOULD BE UPHELD. 2.8 WE HAVE CONSIDERED THE RIVAL CONTENTIONS CAREFULLY, GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THAT THE TRADING RESULTS REJECTED BY THE AO BY INVOKING THE PROVISIO N OF SECTION 145(3) OF THE ACT WAS UPHELD BY THE HON'BLE HIGH COURT AND THE MA TTER WAS RESTORED BACK TO THE FILE OF THE TRIBUNAL WITH A LIMITED PURPOSE TO DECIDE THE CORRECTNESS OF GROSS PROFIT RATE APPLIED BY THE AO AND THE ADDITIO N DELETED BY THE LD. CIT(A) WITH REFERENCE TO THE COGENT MATERIALS CONSI DERED BY THEM. FROM THE RECORD, WE FIND THAT THE AO HAS MADE TRADING ADDI TION OF RS.9,11,190/- IN THE COUNTRY LIQUOR A/C BY APPLYING G.P. RATE OF 46. 5% AFTER CONSIDERING THE CASES REFERRED IN ANNEXURE A. IN ANNEXURE A, THE AO HAS REFERRED TO 27 LIQUOR CONTRACTORS WHERE HE HAS GIVEN THE G.P. RATE IN COUNTRY LIQUOR BEFORE 19 THE SHORTFALL. WE FOUND THAT THIS LIST ALSO CONTAIN S CASES OF 8 LIQUOR CONTRACTOR WHO HAVE DECLARED G.P. RATE IN COUNTRY LIQUOR LOWER THAN THAT DECLARED BY THE ASSESSEE NAMELY M/S BHERU LAL & PARTY (G.P. RATE 34 .09% FOR A.Y. 95-96), M/S BALAJI WINES (G.P. RATE 32.34% FOR A.Y. 98-99), M/S BANNA ALI GIRDHARI SINGH & PARTY, KHETRI GROUP (G.P. RATE 44. 59% FOR A.Y. 98-99), M/S RAJA RAM HAZARI RAM & PARTY (G.P. RATE 43.86% F OR A.Y. 95-96), M/S JAI MAL RAM KISHORI LAL & PARTNERS (G.P. RATE 14% F OR A.Y. 90-91), M/S HETRAM AJAB SINGH & PARTNERS (G.P. RATE 6.3% FOR A. Y. 89-90), M/S SHER MOHD. FAIZUKHAN, JHUNJHUNU GROUP (G.P. RATE 36.66% FOR A.Y. 91-92) AND CHIRAWA GROUP (G.P. RATE 41.85% FOR A.Y. 91-92). TH US, THE G.P. RATE IN COUNTRY LIQUOR BEFORE SHORTFALL IN THESE 8 CASES RA NGES FROM 6.3% TO 44.59% WHICH IS LOWER THAN THE G.P. RATE OF 44.66% DECLARE D BY THE ASSESSEE. THE ASSESSEE HAS ALSO GIVEN A LIST OF 6 LIQUOR CONTRACT ORS [CIT(A) ORDER PAGE 4] WHEREIN THE G.P. RATE DECLARED RANGES FROM 15.45% T O 41.23% AND G.P. RATE APPLIED RANGES FROM 25% TO 45% WHICH IS LOWER THAN OR COMPARABLE TO THE G.P. RATE OF 44.66% DECLARED BY THE ASSESSEE. IN T HE TRADING RESULTS OF IMFL/BEER ACCOUNT, THE AO HAS MADE ADDITION BY APPL YING G.P. RATE OF 14.5% AFTER CONSIDERING THE CASES REFERRED IN ANNEX URE A. IN ANNEXURE A THE AO HAS REFERRED TO 27 LIQUOR CONTRACTORS WHERE HE HAS GIVEN THE G.P. RATE IN IMFL & BEER BEFORE THE SHORTFALL. WE FOUND THAT THIS LIST ALSO CONTAINS CASES OF 11 LIQUOR CONTRACTOR WHO HAVE DECLARED G.P . RATE IN IMFL & BEER 20 LOWER THAN THAT DECLARED BY THE ASSESSEE NAMELY M/S NORANG SINGH KASANIA & PARTY (G.P. RATE .34% FOR A.Y. 97-98), M/S OM SIN GH RATHORE & PARTY (G.P. RATE 11.96% FOR A.Y. 98-99), M/S HARJINDER SI NGH & PARTY (G.P. RATE 8.67% FOR A.Y. 98-99), M/S BALAJI WINES (G.P. RATE 9.85% FOR A.Y. 98-99), M/S RAJESH KUMAR & PARTY (G.P. RATE 4.63% FOR A.Y. 98-99), M/S BANNA ALI GIRDHARI SINGH & PARTY, KHETRI GROUP (G.P. RATE 10. 84% FOR A.Y. 98-99) AND CHJIRAWA GROUP (G.P. RATE 11.43% FOR A.Y. 98-99 ), M/S RAJA RAM HAZARI RAM & PARTY (G.P. RATE .64% FOR A.Y. 95-96), M/S JAI MAL RAM KISTOORI LAL & PARTNERS (G.P. RATE 6.62% FOR A.Y. 9 0-91, LOSS DECLARED FOR A.Y. 91-92) AND M/S HETRAM AJAB SINGH & PARTNERS (G .P. RATE 8.14% FOR A.Y. 89-90). THUS, THE G.P. RATE IN IMFL & BEER BEF ORE SHORTFALL IN THESE 11 CASES RANGES FROM 0.34% TO 11.96% WHICH IS LOWER TH AN THE G.P. RATE OF 12.12% DECLARED BY THE ASSESSEE. THE ASSESSEE HAS A LSO GIVEN A LIST OF 5 LIQUOR CONTRACTORS BEFORE LD. CIT(A), WHICH HAS BEE N DEALT WITH BY HIM AT PAGE 4 OF THE APPELLATE ORDER WHEREIN THE GROSS PRO FIT RATE APPLIED RANGES FROM 3.85% TO 12% WHICH EVEN IS LOWER THAN THE GROS S PROFIT RATE OF 12.12% DECLARED BY THE ASSESSEE. WE ALSO FOUND THAT THE AS SESSEE WAS ALLOTTED LICENSE FOR UDAIPURWATI AREA WHICH IS CLOSED TO HAR YANA. THEREFORE, THE ASSESSEE HAS TO KEEP COMPETITIVE RATE OF LIQUOR OTH ERWISE THERE WILL BE IMPORT OF LIQUOR FROM HARYANA WHICH IS AT A LOWER PRICE. B Y CONSIDERING THE FACT THAT VARIOUS OTHER LIQUOR CONTRACTORS HAVE DECLARED THE GROSS PROFIT RATE WHICH 21 IS LOWER TO THE GROSS PROFIT RATE DECLARED BY THE A SSESSEE, THE LD. CIT(A) AFTER RECORDING THE DETAILED FINDINGS HAS REDUCED THE ADD ITION ON A FAIR AND REASONABLE BASIS TO RS. 1.50 LACS , WHICH IS QUITE JUSTIFIED. DETAILED FINDING RECORDED BY THE LD. CIT(A) HAD NOT BEEN CONTROVERED . ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF TH E LD. CIT(A) FOR SUSTAINING THE ADDITION OF RS. 1.50 LACS. 3.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED 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:- 1. THE ITO, WARD- 4 (2) JAIPUR 2. M/S. BANNA ALI GIRDHARI SINGH & PARTY (UDAIPURWA TI GROUP), JAIPUR 3. THE LD. CIT 4. THE LD. CIT(A), JAIPUR 5..THE LD. DR 6.THE GUARD FILE (IT NO.71/JP/2002) BY ORDER A.R. ITAT: JAIPUR 22 23
