Kuna Anjibabu Goud, Hyderabad, Hyderabad V. ITO, Ward-10(1), Hyderabad, Hyderabad

ITA 976/HYD/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2625 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 07-06-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: L K PISSAY
• Section: 145

Judgement Text

ITA NO 976 O F 2017 KUNA ANJIBABU GOUD HYDERABAD. PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.976/HYD/2017 (ASSESSMENT YEAR: 2013-14) SHRI KUNA ANJIBABU GOUD HYDERABAD PAN: AC TPK 1672 R VS INCOME TAX OFFICER WARD 10 (1) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI L.K. PISSAY FOR REVENUE : SMT. SUMAN MALIK, DR O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2013-14. IN T HIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE ORDER OF T HE LEARNED CIT (A)-6, HYDERABAD, DATED 7.4.2017. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. YOUR APPELLANT IS AN INDIVIDUAL CARRYING ON THE BUSINESS OF RUNNING A WINE SHOP FOR PURCHASE AND SALE OF IMFL SUPPLIES SOLELY BY APBCL A STATE GOVT. AGENCY. 2. THE LEARNED ASSESSING OFFICER COMPLETED THE ASSESSMENT AFTER APPLYING 5% AS NET PROFIT TO THE COST OF GOODS SOLD DURING THE YEAR AND MAKING AN ADDITION OF RS. 41,70,601/- TO THE INCOME RETURNED. DATE OF HEARING: 10.01 . 201 8 DATE OF PRONOUNCEMENT: 12.01.2018 ITA NO 976 O F 2017 KUNA ANJIBABU GOUD HYDERABAD. PAGE 2 OF 4 3. THE FIRST APPELLATE AUTHORITY HAS ERRED IN CONFIRMING THE ADDITIONS MADE BY THE ASSESSING OFFICER 4. YOUR APPELLANT SUBMITS THAT HE HAS BEEN MAINTAINING PROPER BOOKS OF ACCOUNTS WHICH HAVE BEEN SUBJECT TO AUDIT U / S 44 AB OF THE INCOME TAX ACT WHICH WERE DULY EXAMINED BY THE ASSESSING OFFICER TO HIS SATISFACTION. 5. THE LEARNED ASSESSING OFFICER HAS NOT CONSIDERED THE FACTS OF THE CASE LAWS THAT THE HON'BLE INCOME TAX APPELLANT TRIBUNAL HELD IN I) APPEAL NO. ITA / 517 H - 13, BENCH, HYDERABAD IN THE CASE OF SAI CINE WINES, HYDERABAD VS. ITO WARD 6(3) DATED 18-12- 2015. II) APPEAL NO. 1198/HYD/2015 IN THE CASE OF M/S SAI VENKATESHWARA WINES, SECUNDERABAD AND IN III) APPEAL NO. 725/HYD/2015 IN THE CASE OF VENKATESHWARA WINES, NIZAMABAD THAT ADOPTION OF 5% AS NET PROFIT IS INCORRECT AND ADOPTED 3% AND 2.5% RESPECTIVELY. 6. YOUR APPELLANT SUBMITS THAT THE ADDITION TO THE INCOME RETURNED IS INCORRECT, ARBITRARY AND APPLICATION OF SECTION 145 OF THE INCOME TAX ACT. IS BAD IN LAW HENCE THE ADDITION MAY BE DELETED. 7. YOUR APPELLANT CRAVES LEAVE TO ADD, AMEND AND ALTER ANY OF THE GROUNDS AT THE TIME OF HEARING. 2. BRIEF FACTS ARE THAT THE ASSESSEE, AN INDIVIDUAL , FILED HIS RETURN OF INCOME FOR THE A.Y 2013-14 ON 28.09.2 013 DECLARING AN INCOME OF RS.15,84,430 FROM TRADING OF LIQUOR. T HE RETURN OF INCOME WAS SELECTED FOR SCRUTINY UNDER CASS AND ACC ORDINGLY ITA NO 976 O F 2017 KUNA ANJIBABU GOUD HYDERABAD. PAGE 3 OF 4 NOTICE U/S 143(2) WAS ISSUED AND SERVED ON THE ASSE SSEE ON 6.9.2014. IN RESPONSE TO THE SAID NOTICE, THE ASSES SEE, REPRESENTED BY ITS COUNSEL, APPEARED AND FURNISHED THE NECESSARY DETAILS. THE AO OBSERVED THAT THE ASSESSEE HAS FAIL ED TO PRODUCE THE BOOKS OF ACCOUNT, SALE BILLS AND BILLS/INVOICES /VOUCHERS FOR THE EXPENDITURE CLAIMED AND STATED THAT IT IS DIFFI CULT TO RAISE THE SALE BILLS IN THIS LINE OF BUSINESS AS IT IS VERY D IFFICULT TO ISSUE THE BILLS FOR THE SALE DUE TO HEAVY RUSH OF PUBLIC AT T HE SALE COUNTERS. THE AO HELD THAT IT IS DIFFICULT TO ARRIVE AT THE R EAL PROFIT OF THE BUSINESS WITHOUT THE SALE BILLS AND SINCE THE EXPEN DITURE IS ALSO NOT VERIFIABLE, THE TRADING RESULTS CANNOT BE ACCEP TED. HE THEREFORE, ESTIMATED THE INCOME OF THE ASSESSEE AT 5% OF THE GOODS PUT TO SALE. AGGRIEVED, THE ASSESSEE PREFERRED AN A PPEAL BEFORE THE CIT (A) WHO CONFIRMED THE ORDER OF THE AO AND THE A SSESSEE IS IN SECOND APPEAL BEFORE US. 3. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISIONS OF THIS TRIBUNAL IN THE CASES REFERRED TO IN GROUND NO.4. 4. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AO AND THE CIT (A). 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE ONLY ISSUE BEFORE US IS THE ESTIMATION OF PROFIT FROM THE BUSINESS OF TRADING IN LIQUOR. T HE CIT (A) HAS CONSIDERED THE ISSUE AT LENGTH AND AS PER THE INFOR MATION ACCESSED FROM THE PUBLIC DOMAIN HAS HELD THAT THE T RADE MARGIN IN SUCH CASES IS 20% AND THAT THE GROSS PROFIT SHOW N BY THE ASSESSEE AT 13.5% IS VERY LESS COMPARED TO THE ABOV E. SHE HAS ITA NO 976 O F 2017 KUNA ANJIBABU GOUD HYDERABAD. PAGE 4 OF 4 ALSO HELD THAT IF TRADE MARGIN IS TAKEN AT 20%, THE GROSS PROFIT OF THE BUSINESS SHOULD BE ESTIMATED AT 2.35 CRORES AND IF ALL THE EXPENSES DEBITED TO THE P&L A/C BY THE ASSESSEE AMO UNTING TO RS.1.05 CRORES WERE TO BE ALLOWED, THE NET PROFIT W OULD WORK OUT TO RS.85.00 LAKHS WHICH IS HIGHER THAN THE NET PROFIT ASSESSED AT RS.49.88 LAKHS BY THE AO. THUS, WE FIND THAT THE CI T (A) HAS GIVEN COGENT REASONS FOR UPHOLDING THE ESTIMATION O F BOOK PROFIT AT 5%. IN THE CASE LAW RELIED UPON BY THE LEARNED COUN SEL FOR THE ASSESSEE, THE TRIBUNAL HAS CONSIDERED THAT UNIFORMI TY IN THE PROFIT CANNOT BE ADOPTED IN EACH AND EVERY CASE OF SIMILAR BUSINESS AND THAT THE ESTIMATION OF NET PROFIT MUST BE ON THE BA SIS OF FACTS INVOLVED IN EACH AND EVERY CASE. SINCE IN THE CASE BEFORE US, THE AO AND THE CIT (A) HAVE BROUGHT OUT AS TO HOW THE A SSESSEES PROFIT AS PER ITS OWN BOOKS OF ACCOUNT IS MUCH MORE THAN THE NET PROFIT ASSESSED BY THE AO, WE SEE NO REASON TO INTE RFERE WITH THE SAME. 6. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH JANUARY, 2018. SD/- SD/- (B.RAMAKOTAIAH) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 12 TH JANUARY 2018. VINODAN/SPS COPY TO: 1 M/S. PISSAY & CO. CAS, 701, 7 TH FLOOR, PAIGAH PLAZA, BASHEERBAGH HYDERABAD 500063 2 I.T.O WARD 10(1) HYDERABAD 3 CIT (A) - 6, HYDERABAD 4 PR. CIT 6 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER