DCIT, Jaipur V. BHUDHARAM MAKHAN LAL & PARTY, BHARATPUR

ITA 802/JPR/1998

• Counselvise Citation: 80223114 RSA 1998
• Duration Of Justice: 15 year(s) 6 month(s) 7 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: 1997-1998
• Appeal Filed On: 22-11-1998
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Assessee Lawyers: S P SINGHAL
• Section: 143(3); 145

Judgement Text

1 IN THE INCOME TAX APPELALTE TRIBUNAL: JAIPUR BENCH JAIPUR (BEFORE SHRI RAJ PAL YADAV AND SHRI R.C. SHARMA) ITA NO. 802/JP/1998 (A.Y. 1997-1998) DCIT, CENTRAL CIRCLE-2, VS. M/S BUDHARAM MAKHAN LA L & PARTY. JAIPUR. (GROUP THANAGAJI), BHARATPUR. (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI D.C. SHARMA - D.R. ASSESSEE BY : SHRI S.P. SINGHAL. DATE OF HEARING : 27/05/2014. DATE OF PRONOUNCEMENT : 30/05/2014. O R D E R PER R.C. SHARMA, A.M THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) DATED 13/10/1998 FOR THE ASSESSMENT YEAR 199 7-98, IN 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 THAT T HIS APPEAL WAS DECIDED BY THE TRIBUNAL VIDE ITS ORDER DATED 20/10/ 2004. AGAINST THIS ORDER OF THE TRIBUNAL, BOTH THE ASSESSEE AND REVENU E 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 DECIDI NG AFRESH AND DENOVO THE TRADING ADDITION MADE BY INVOKING PROVISIONS OF SEC. 145(3), IN 2 ACCORDANCE WITH LAW. THE HON'BLE HIGH COURT HAS ALS O DIRECTED ITAT TO DECIDE THESE APPEALS EXPEDITIOUSLY NOT LATER THAN 0 6 MONTHS FROM THE DATE PARTIES ARE CALLED TO PUT THEIR APPEARANCE BEF ORE ITAT. IN ACCORDANCE WITH DIRECTION OF HON'BLE HIGH COURT, TH ESE 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 FI GURE AS WELL AS BY ESTIMATING THE PROFIT RATE AT 14.5%. 2.3 THE RIVAL CONTENTIONS HAVE BEEN HEARD AND RECOR DS PERUSED. THE ASSESSEE IS A LIQUOR CONTRACTOR. THE ASSESSEE HAD O PTED LICENSE FOR SELLING COUNTRY LIQUOR, IMFL AND BEER ETC. BY WAY OF AUCTIO N/TENDER FROM THE EXCISE DEPARTMENT. THE PURCHASE OF LIQUOR IS FROM S PECIFIED ML AND IS FULLY ACCOUNTED FOR. HOWEVER, THE SALE PRICE LIQUOR WAS NOT FIXED BY THE EXCISE DEPARTMENT AND THE ASSESSEE WAS NOT MAINTAIN ING ANY SALE VOUCHERS THOUGH THE AGGREGATE OF THE CASH SALES WAS ENTERED INTO THE CASH BOOK. THE PRIMARY RECORDS OF SALES IN RESPECT OF EACH SALE WAS NOT MAINTAINED. THE A.O. WAS OF THE VIEW THAT IN ABSENC E OF THE PRIMARY RECORD OF THE SALE, THE CORRECTNESS OF THE TRADING RESULTS WAS UNVERIFIABLE. THE PROVISIONS OF SEC. 145 WERE INVOKED AND ESTIMAT ION OF SALES AND G.P. RATE MADE WHICH RESULTED INTO THE TRADING ADDITION OF RS. 5,36,850/-. 3 AFTER OBSERVING THAT THE ESTIMATION OF SALES AND G. P. RATE APPLIED BY THE AO HAS NOT BASED ON ANY RATIONAL MATERIAL AND SAME BEING ARBITRARY, THE CIT(A) AFTER CONSIDERING VARIOUS ORDERS OF THE ITA T IN RESPECT OF THE SIMILAR CASES OF LIQUOR CONTRACTOR, SUSTAINED A LUM P SUM ADDITION OF RS. 79,000/-. AGAINST THIS ORDER OF THE LD. CIT(A), THE REVENUE IS IN FURTHER APPEAL BEFORE US. 2.4 WE HAVE CONSIDERED THE RIVAL CONTENTIONS CAREFU LLY, GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THAT WITHOUT GIVING ANY VALID BASIS FOR ESTIMATING GROSS PROFIT RATE, THE A.O. HAS MADE A TRADING ADDITION OF RS. 5,36,850/-. EVEN THOUGH, THE SALES BILLS WERE NOT MAINTAINED BY THE ASSESSEE, BUT AT THE VER Y SAME TIME PURCHASE WAS NOT DISPUTED NOR THE QUANTUM OF OTHER EXPENDITURE INCURRED BY THE ASSESSEE. AS PER THE CONSIDERED VIEW WHILE E STIMATING THE GROSS PROFIT, THE A.O. SHOULD BE FAIR AND REASONABLE AND SHOULD TAKE INTO ACCOUNT THE TURN OVER AND THE GROSS PROFIT OF EARLI ER YEARS ALONGWITH ALL THE FACTS AND CIRCUMSTANCES OF THE CASE. THOUGH, TH ERE IS AN ELEMENT OF GUESS WORK IN BEST JUDGMENT ASSESSMENT IT SHOULD NOT BE WILD ONE, BUT SHOULD HAVE A REASONABLE NEXUS TO THE AVAILABLE MAT ERIAL AND CIRCUMSTANCES OF EACH CASE. IN THE INSTANT CASE BEF ORE US, THE A.O. NOT POINTED OUT ANY VALID BASIS FOR ESTIMATING THE G.P. RATE AND MAKING ADDITION, HOWEVER, THE LD. CIT(A) AFTER RECORDING T HE FINDING AT PARA 2.2 4 OF HIS APPELLATE ORDER, WHICH HAS NOT BEEN CONTROVE RTED BY THE DEPARTMENT BY BRINGING ANY POSITIVE MATERIAL ON RE CORD, UPHELD A TRADING ADDITION OF RS. 75,000/-, WHICH APPEARS TO BE VERY REASONABLE. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF THE LD. CIT(A) FOR MODIFYING THE TRADING ADDITION MADE BY THE A.O. ON AD HOC BASIS THEREBY GIVING RELIEF OF RS. 4,61,850/-. 2.5 IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/05/2014. SD/- SD/- (RAJ PAL YADAV) (R.C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30/05/2014 *RANJAN COPY FORWARDED TO: 1. THE APPELLANT- DEPUTY CIT, CENTRAL CIRCLE-2, JA IPUR. 2. THE RESPONDENT- M/S BUDHARAM MAKHAN LAL & PARTY , BHARATPUR. 3. THE CIT 4. CIT(APPEALS) 5. THE DR 6. GUARD FILE (ITA NO. 802/JP/1999) BY ORDER A.R., JAIPUR.