Akuthota Sudhakar (Huf), Warangal vs Department Of Income Tax

The Income Tax Officer Shri Akuthota Sudhakar (HUF) Ward-3, Warangal vs. Prop. S.S.S. Wines, Warangal PAN AAIHA8094E (Appellant) (Respondent)

For Revenue : Mr. Ramakrishna Bandi For Assessee : Mr. P. Raviseshagiri Rao

Date of Hearing : 20.04.2015 Date of Pronouncement : 22.04.2015

ORDER

PER P.M. JAGTAP, A.M.

This appeal is preferred by the Revenue against the Order of the Ld. CIT(A)-VI, Hyderabad dated 27.08.2014 whereby he directed the A.O. to estimate the income of the assessee from liquor business by applying net profit rate of 5% on purchase or stock put for sale during the year under consideration as against the net profit rate of 25% applied by the Assessing Officer.

2. The assessee in the present case is a HUF which is engaged in the business of liquor trade on retail basis in the name S.S.S. Wines. The return of income for the year under consideration was filed by it on 13.10.2010 declaring total income of Rs.7,60,257. Although the assessee during the course of assessment proceedings produced the books of accounts, purchase invoices and expenses vouchers, the sales 2 ITA.No.1823/Hyd/2014 Shri Akuthota Sudhakar (HUF), Warangal.

bills could not be produced by it on the ground that no such bills were regularly maintained/issued. In the absence of the sale bills, the total sales declared by the assessee was found to be not verifiable by the Assessing Officer. He accordingly rejected the books of account and estimated the income of the assessee by applying gross profit rate of 25% on purchase value of sales after deducting expenditure of Rs.46,10,800 claimed by the assessee. Accordingly, the total income of the assessee was determined by the A.O. at Rs.94,95,673 in the assessment completed under section 143(3) vide order dated 28.03.2013.

3. Against the order passed by the A.O. under section 143(3), an appeal was preferred by the assessee before the Ld. CIT(A) who followed the decision of the Tribunal in the case of M/s. Amaravati Wine Shop rendered vide its order dated 08.06.2012 in ITA.No.1196/Hyd/2011 and directed the A.O. to estimate the income of the assessee by applying a net profit rate of 5% on the value of purchase or stock put for sale during the year under consideration. He also directed the A.O. that if the income of the assessee so estimated is found to be less than the income returned by it, the income returned be computed as total income of the assessee. Aggrieved by the order of the Ld. CIT(A), Revenue has preferred this appeal before the Tribunal.

4. We have heard the arguments of both the sides and also perused the relevant material on record. As agreed by the learned representative of both the sides, the issue involved in this appeal is squarely covered in favour of the assessee by the decision of Coordinate Bench of this Tribunal in the case of M/s. Amaravati Wines (supra) wherein a similar issue was 3 ITA.No.1823/Hyd/2014 Shri Akuthota Sudhakar (HUF), Warangal.

decided by the Tribunal in favour of the assessee in identical facts and circumstances holding that the income of the assessee from liquor business could reasonably be estimated by applying the net profit rate of 5% on the value of purchases and stock put for sale during the relevant year. Respectfully following the decision of the Coordinate Bench of this Tribunal in the case of M/s. Amaravati Wines (supra), we uphold the impugned order of the Ld. CIT(A) directing the A.O. to estimate the income of the assessee from liquor business by applying the net profit rate of 5% on the value of purchase and stock put to use during the year under consideration.

5. In the result, appeal of the Revenue is dismissed.

Order pronounced in the open Court on 22.04.2015.

Sd/- Sd/- (SAKTIJIT DEY) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER

Hyderabad, Dated 22nd April, 2015.

VBP/-

Copy to

1. The Income Tax Officer, Ward-3, Aayakar Bhavan, Station Road, Warangal

2. Shri Akuthota Sudhakar (HUF), Prop. S.S.S. Wines, H.No.19-6-275, Rangasaipet, Warangal.

3. CIT(A)-VI, Hyderabad

4. CIT-VI, Hyderabad.

5. D.R. I.T.A.T. "A" Bench, Hyderabad.