ITO, Ward-9(2), Hyderabad V. M/s Devi Wines, Hyderabad

ITA 994/HYD/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69854 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 14-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R LAXMAN
• Assessee Lawyers: A V RAGHURAM
• Keywords: Rejection of books of accounts
• Section: 142(1); 147; 148; 144

Judgement Text

1 ITA.NO.994/HYD/2013 M/S. DEVI WINES, HYDERABAD IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B.RAMAKOTAIAH, ACCOUNTANT MEMBER ITA.NO.994/HYD/2013 ASSESSMENT YEAR 2007-2008 I.T.O. WARD 9 (2) HYDERABAD VS. M/S. DEVI WINES HYDERABAD PAN AADFD7342P (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI R. LAXMAN FOR RESPONDENT : SHRI A.V.RAGHURAM DATE OF HEARING : 30.09.2013 DATE OF PRONOUNCEMENT : 04.10.2013 ORDER SMT. P. MADHAVI DEVI, J.M. THIS APPEAL FILED BY THE REVENUE IS AGAINST THE OR DER OF THE CIT(A), VIJAYAWADA DATED 25.03.2013 FOR THE ASSESSMEN T YEAR 2007-2008. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN AOP AND IS CARRYING ON BUSINESS OF RETAIL TRADE OF LIQUOR. I T FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-2008 ON 30.10 .2007 DECLARING TAXABLE INCOME AT NIL. THE RETURN WAS PROC ESSED UNDER SECTION 143(1) OF THE I.T. ACT, 1961 ON 16.03.2009. LATER ON, THE CASE OF THE ASSESSEE WAS REOPENED UNDER SECTION 147 OF THE I.T. ACT BY ISSUING A NOTICE UNDER SECTION 148 DATED 28.0 4.2009, AS THE ASSESSEE-FIRM FAILED TO DISCLOSE TOTAL INCOME A RRIVED AT BY IT VIDE THE COMPUTATION OF INCOME FILED AT RS.1,40,542 /-. SUBSEQUENTLY, THE ASSESSING OFFICER ALSO NOTICED THA T THE 2 ITA.NO.994/HYD/2013 M/S. DEVI WINES, HYDERABAD ASSESSEE HAS ADMITTED PROFIT ON SALE OF LIQUOR PROD UCTS FAR LESS THAN THE MRP FIXED BY THE APBCL VIDE G.O.MS.NO.184 D ATED 07.02.2005. THEREFORE, NOTICE UNDER SECTION 142(1) ALONG WITH THE QUESTIONNAIRE AND NOTICE UNDER SECTION 143(2) OF TH E I.T. ACT WERE ISSUED TO THE ASSESSEE. HOWEVER, THE ASSESSEE FAILE D TO RESPOND TO THE SAID NOTICES AND THEREFORE, THE ASSESSING OFFIC ER PROCEEDED TO COMPLETE THE ASSESSMENT UNDER SECTION 144 READ WITH SECTION 147 OF THE ACT. 3. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE WAS DEALING WITH THE RET AIL TRADE OF LIQUOR BUT HAS NOT OFFERED THE INCOME AT THE GROSS PROFIT RATE FIXED AS PER G.O.MS. NO.184 DATED 07.02.2005 ISSUED BY THE GOVERNMENT OF ANDHRA PRADESH. HE OBSERVED THAT THE PROFIT OF THE ASSESSEE SHOULD BE AT 27% OF THE PURCHASES AS P ER G.O.MS.NO.184 DATED 07.02.2005, WHEREAS, THE ASSESS EE HAS OFFERED ONLY A SUM OF RS.1,40,542/- WHICH IS FAR BEL OW THAT FIXED BY THE GOVERNMENT OF ANDHRA PRADESH. HE, THEREFORE, ESTIMATED THE GROSS PROFIT TO BE AT 27% OVER AND ABOVE THE PU RCHASE VALUE AND ARRIVED AT THE DIFFERENCE IN THE PROFIT (AS PER G.O.MS.NO.184 AND THE NET PROFIT ALREADY ADMITTED) AT RS.36,72,792 /- TO BE THE UNDER-RECORDED PROFIT IN THE BOOKS OF ACCOUNTS OF T HE ASSESSEE. HE, ACCORDINGLY, BROUGHT IT TO TAX. 4. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE CIT(A) AND REITERATED THE SUBMISSIONS MADE BEFORE T HE ASSESSING OFFICER AND ALSO PLACED RELIANCE UPON THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF IT O, HYDERABAD VS. M/S. AMARAVATHI WINE SHOP, HYDERABAD FOR THE ASS ESSMENT YEAR 2007-2008 IN ITA.NO.1196/HYD/2011 DATED 08.06.20 12 WHEREIN THE NET PROFIT ON RETAIL LIQUOR HAS BEEN ES TIMATED AT 5% OF THE PURCHASES OR STOCK PUT FOR SALE DURING THE YE AR UNDER 3 ITA.NO.994/HYD/2013 M/S. DEVI WINES, HYDERABAD CONSIDERATION SUBJECT TO THE CONDITION THAT IT SHOUL D NOT BE LESS THAN THE INCOME OTHERWISE RETURNED. THE CIT(A), FOL LOWING THE DECISION OF THE ITAT IN THE CASE OF M/S. AMARAVATHI WINE SHOP (SUPRA) DIRECTED THE ASSESSING OFFICER TO RE-COMPUT E THE TOTAL INCOME ACCORDINGLY. 5. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. T HE REVENUE HAS RAISED AS MANY AS SEVEN GROUNDS OF APPEAL, BUT T HE ESSENCE OF THE GRIEVANCE OF THE REVENUE IS THAT THE CIT(A) OUGHT TO HAVE UPHELD THE ESTIMATE OF PROFIT AT 27% OF THE COST OF LIQUOR PUT TO SALE AS PER THE GOVERNMENT OF ANDHRA PRADESH (PROH. & EXCISE) G.O.MS.NO. 184 DATED 07.02.2005 AND OUGHT NOT TO HA VE RELIED UPON THE DECISION OF THE ITAT IN THE CASE OF M/S. A MARAVATHI WINE SHOP (SUPRA). 6. THOUGH NOTICE OF HEARING HAS BEEN ISSUED TO THE ASSESSEE, THE SAME HAS BEEN RETURNED AS UN-SERVED. HOWEVER, S HRI A.V.RAGHURAM, ADVOCATE HAS TAKEN NOTICE ON BEHALF O F THE ASSESSEE STATING THAT HE HAD APPEARED FOR THE ASSES SEE BEFORE THE CIT(A). 7. THE LEARNED D.R. SUPPORTED THE ORDER OF THE ASSE SSING OFFICER WHILE THE LEARNED COUNSEL FOR THE ASSESSEE, SUPPORTED THE ORDER OF THE CIT(A) AND ALSO RELIED UPON THE DECISI ON OF THIS TRIBUNAL IN THE CASE OF M/S. AMARAVATHI WINE SHOP ( CITED SUPRA). 8. HAVING HEARD BOTH THE PARTIES AND HAVING CONSIDE RED THEIR RIVAL CONTENTIONS, WE FIND THAT THE ISSUE AS TO WHE THER THE ASSESSEES WHO ARE CARRYING ON BUSINESS OF RETAIL TRA DE IN LIQUOR WOULD BE EARNING THE GROSS PROFIT AS PER G.O.MS.NO. 184 DATED 07.02.2005 AT 27%, HAD COME-UP FOR CONSIDERATION BE FORE THE B BENCH OF THIS TRIBUNAL AND THIS TRIBUNAL AFTER CONS IDERING THE 4 ITA.NO.994/HYD/2013 M/S. DEVI WINES, HYDERABAD CONTENTIONS OF THE BOTH THE PARTIES AT LENGTH AND A LSO AFTER CONSIDERING THE DECISION OF THIS TRIBUNAL IN THE CA SE OF M/S. KANAKADURGA WINES VS. ITO IN ITA.NO. 591/HYD/2011, H AD UPHELD THE REJECTION OF BOOKS OF ACCOUNTS BUT HELD T HAT NET PROFIT AT 5% OF PURCHASES TO BE REASONABLE AND NOT 27% AS FIXED BY THE GOVERNMENT OF ANDHRA PRADESH IN ITS G.O.MS.NO. 184 DATED 07.02.2005. WE FIND THAT THE CIT(A) HAS FOLLOWED TH E DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL FOR ALLOWING THE ASSESSEES APPEAL. RESPECTFULLY FOLLOWING THE DECISION OF THE C OORDINATE BENCH, WE DO NOT SEE ANY REASON TO INTERFERE WITH TH E ORDER OF THE CIT(A) AND WE, THEREFORE, DISMISS THE APPEAL OF THE REVENUE. 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 04.10.2013 SD/- SD/- - (B.RAMAKOTAIAH) ACCOUNTANT MEMBER - (P.MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 04 TH OCTOBER, 2013 VBP/- COPY TO 1. INCOME TAX OFFICER, WARD 9 (2), HYDERABAD. 2. M/S. DEVI WINES, 18 - 5 - 2, LALDARWAZA, HYDERABAD 3. CIT(A), VIJAYAWADA. 4. CIT - VI , HYDERABAD 5. DR A BENCH, ITAT, HYDERABAD