M/s Queens Tourist Home, Calicut V. ACIT, Calicut

ITA 716/COCH/2008

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58218 (ITAT-COCHIN)
• Duration Of Justice: 3 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 02-01-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 04-06-2008
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Keywords: Gross profit estimation; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKARA N, AM I.T.A NO. 716/COCH/2008 ASSESSMENT YEAR : 2004-05 M/S. QUEEN TOURIST HOME, MAIN ROAD, QUEENS CORNER, VADAKARA [PAN: ABLPV9699N] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, WARD-2(1), CALICUT. (ASSESSEE-APPELLANT) (REVENUE-RESPONDENT) ASSESSEE BY NONE REVENUE BY MS. S.VIJAYAPRABHA, JR. DR DATE OF HEARING 02/01/2012 DATE OF PRONOUNCEMENT 06 /012012 O R D E R PER B.R.BASKARAN AM: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 17.3.2008 PASSED BY THE LD. CIT(A)-I, CALICUT AND IT RELATES TO THE ASS ESSMENT YEAR 2004-05. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD. CIT(A) IN SUSTAINI NG THE LUMPSUM ADDITION TO THE EXTENT OF ` 1 LAKH. THE LD. AR OF ASSESSEE HAS FILED A LETTER EXPRESSING HIS INABILITY TO APPEAR FOR HEARING AND ACCORDINGLY, PRAYED THAT THE APPEAL MAY BE DISPOSED OF ON MERITS. ACCORDINGLY, WE PROCEED TO DISPOSE OF THE APPEAL EX -PARTE, QUA THE ASSESEE. 2. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE IS IN THE BUSINESS OF RUNNING A RESTAURANT AND BAR. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE GROSS PROFIT DIS CLOSED BY THE ASSESSEE WAS 36%, WHICH WAS CONSIDERED TO BE LOW BY HIM. ACCORDINGLY, HE C ALLED FOR CERTAIN DETAILS. THOUGH THE ASSESSEE FURNISHED EXPLANATIONS, YET THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE SAME AND ACCORDINGLY, MADE A LUMPSUM ADDITION OF ` 2 LAKHS TO TAKE CARE OF THE DEFICIENCIES I.T.A. NO.716 /COCH/2008 2 NOTICED BY HIM. THE ASSESESE CHALLENGED THE SAID A DDITION BEFORE THE LD. CIT(A) WHO CONFIRMED THE ADDITION PARTIALLY TO THE TUNE OF ` 1 LAKH. STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 3. WE HAVE HEARD THE LD. DR AND CAREFULLY PERUSED T HE RECORD. FROM THE ASSESSMENT ORDER, WE NOTICE THAT THE ASSESSING OFFICER HAS RAI SED QUERIES ON FOUR ISSUES. THE LD. CIT(A) HAS NOTICED THAT THE EXPLANATIONS FURNISHED BY THE ASSESSEE WITH REGARD TO THE COMPETITIVE PRICE OF LIQUOR AND ALSO LOW G.P. WERE CONVINCING. HOWEVER, WITH REGARD TO THE QUERIES RAISED IN RESPECT OF FOOD SALES AND ALS O NON- ACCOUNTING OF SALE OF EMPTY BOTTLES, THE LD. CIT(A) NOTICED THAT THE ASSESSEE COULD NOT OFFER PROPER EXPLANATIONS WITH SUPPORTING EVIDENCES. ACCORDINGLY, THE LD. CIT(A) P ARTIALLY SUSTAINED THE ADDITION TO THE TUNE OF ` 1 LAKH. FOR THE SAKE OF CONVENIENCE, WE EXTRACT BE LOW THE RELEVANT OBSERVATIONS OF LD. CIT(A). 4.BEFORE ME THE SAME SUBMISSIONS MADE BEFORE THE AO WERE REITERATED, I HAVE CONSIDERED THE SUBMISSIONS MADE. THE AO HAS ACCEP TED THE FACT THAT THE PROFITS IN VADAKARA WOULD BE COMPARATIVELY LOW ON ACCOUNT OF ITS NEARNESS TO MAHE WHERE LIQUOR WAS AVAILABLE AT A LOW RATE. THE AO HAS AL SO ACCEPTED THAT THE PRICE AT VADAKARA WOULD BE FAIRLY LOW COMPARED TO THE PRICE AT CALICUT. THUS THE ARGUMENT OF THE APPELLANT IN RELATION TO LIQUOR SA LES HAS BEEN SUBSTANTIALLY ACCEPTED. ALSO THE EVIDENCE LET IN BY THE APPELLA NT THAT OVER THE LAST 4 YEARS ITS GP HAS BEEN STEADILY INCREASING HAS ALSO NOT BEEN DEN IED BY THE AO. AS REGARDS THE CONTENTION RAISED REGARDING DISCREPANCY IN FOOD SA LES AND THE NON-ACCOUNTING OF INCOME FROM SALE OF BOTTLES THE CONTENTION OF THE APPELLANT IS NOT SUPPORTED BY ANY EVIDENCE AS SUCH. IN THESE CIRCUMSTANCES, THE NOR MAL SITUATION HAS TO BE ACCEPTED IN THE APPELLANTS CASE ALSO. THUS THE DISCREPANC Y IN REGARD TO THE LOW GP IN FOOD SALES AND NON ACCOUNTING OF BOTTLE SALES REMAINS U NEXPLAINED. IN VIEW OF THESE FACTS, I HOLD THAT THE LUMPSUM ADDITION OF ` 2,00,000/- IS ON THE HIGHER SIDE AS THE LOWER INCOME ARISING FROM BAR SALES AND THE LOW GP THEREIN HAS BEEN SUBSTANTIALLY EXPLAINED BY THE APPELLANT TO THE SA TISFACTION OF THE AO HIMSELF. IN I.T.A. NO.716 /COCH/2008 3 THIS VIEW OF THE MATTER, I WOULD HOLD THAT THE UNA CCOUNTED INCOME TO BE ESTIMATED AT ` 1,00,000/- IN PLACE OF ` 2,00,000/- ADDED BY THE AO. 4 . FROM THE FACTS OF THE CASE AND THE OBSERVATIONS OF LD. CIT(A) REFERRED ABOVE, WE ARE OF THE VIEW THAT THE LD. CIT(A) HAS TAKEN A CO NSCIOUS DECISION AFTER DULY CONSIDERING THE VARIOUS FACTORS SURROUNDING THE IMPUGNED ISSUE. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE WITH HIS DECISION AND ACCORDING LY, UPHOLD HIS ORDER. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED ON THIS 6TH DAY OF JA NUARY, 2012. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 6TH JANUARY, 2012 GJ COPY TO: 1. M/S. QUEEN TOURIST HOME, MAIN ROAD, QUEENS CORNE R, VADAKARA. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, WARD-2 (1), CALICUT. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, CALI CUT.. 4. THE COMMISSIONER OF INCOME-TAX, CALICUT.. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE .