Srinivas Dasari, Warangal vs Department Of Income Tax

The Income-tax Officer, Ward - vs. Srinivas Dasari, Prop. 3, Warangal. Kanakadurga W ines, Warangal PAN - ARCPD3365N (Appellant) (Respondent)

Revenue by : Shri Ramakrishna Bandi Assessee by : None

Date of hearing 20-04-2015 Date of pronouncement 20-04-2015

O RDE R

PER SAKTIJIT DEY, J.M.:

This appeal filed by the department, is directed against the order of ld. CIT(A)-VI, Hyderabad dated 27/08/2014 for the assessment year 2010-11.

2. As seen from the record, though, notice issued by the Registry intimating the date of hearing of appeal was served on assessee- respondent, but, at the time of hearing, no one represented assessee. Considering the nature of dispute, we proceed to dispose of the appeal exparte, qua assessee-respondent, after hearing ld. DR.

3. As can be seen from the ground raised, the department is aggrieved with the decision of ld. CIT(A) in reducing the rate of estimation of profit of liquor trade from 25% to 5%.

2 ITA No. 1824/Hyd/2014 Srinivas Dasari, Prop. Kanakadurga Wines, Warangal

4. Briefly the facts are, assessee an individual is engaged in liquor trade through its proprietary concern Kanakadurga Wines, situated at Dornakal, Warangal District. For the AY under consideration, assessee filed return of income on 13/10/2010 declaring total income of Rs. 4,70,338. In course of assessment proceeding, AO on verifying the P&L a/c was of the view that the profit declared by assessee from liquor trade is very low. He, therefore, called upon assessee to explain the same. In response, assessee submitted that in similar nature of business, ITAT has directed for estimation of net profit at 3% on stock put to sale. In support of such submission, assessee also relied upon few decisions of ITAT on the issue. AO, however, did not find merit in the submissions of assessee. He observed that department has filed appeals before Hon'ble A.P. High Court against the orders of ITAT. On the basis of the aforesaid reasoning, AO proceeded to estimate the gross profit on purchase value of liquor at 25% and after giving credit to expenditure claimed by assessee, the net profit from liquor business was determined at Rs. 35,58,417. Being aggrieved with the estimation of profit at 25% on liquor trade, assessee preferred appeal before ld. CIT(A).

5. Ld. CIT(A) after considering the submissions of assessee, observed that incase of M/s Amaravathi Wine Shop in ITA No. 1196/Hyd/2011 dated 08/06/12, ITAT, Hyderabad Bench has directed for estimation of net profit at 5% on purchases or stock put for sale during the relevant PY. Following the decision of ITAT, ld. CIT(A) directed AO to estimate the net profit at 5% on purchases or stock put up for sale during the year with a rider that assessed income in any case should not be less than the returned income.

6. We have heard the ld. DR and perused the relevant materials on record as well as orders of revenue authorities. As can be seen from the facts on record, the only dispute is with regard to rate of profit applied by ld. CIT(A). However, it is a fact on record that ITAT, 3 ITA No. 1824/Hyd/2014 Srinivas Dasari, Prop. Kanakadurga Wines, Warangal

Hyderabad Benches while considering identical nature of dispute has directed for estimation of profit @ 5% on purchases or stock put up for sale during the relevant year. The department has not brought any material to show that the facts involved in the present appeal are in any way different from the facts considered by ITAT, Hyderabad Benches while directing estimation of profit at 5% on liquor trade. The department has also not brought any other contrary decision to our notice. That being the case, since ld. CIT(A) has followed the decision of the ITAT, Hyderabad Benches while directing estimation of profit from liquor trade at 5% on purchases or stock put up for sale during the year, we do not find any infirmity in the decision of ld. CIT(A). Accordingly, we uphold the same by dismissing the grounds raised by department.

5. In the result, Department's appeal is dismissed.

Pronounced in the open court on 20 th April, 2015 upon conclusion of hearing.

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

Hyderabad, Dated: 20 th April, 2015 kv

Copy to:-

1) ITO, Ward - 3, Aayakar Bhavan, Station Road, Warangal.

2) Sri Srinivas Darasar, Prop. Kanakadurga Wines, H. No. 3-1-134, Sardari Quarters, Station Road, Dornkal, Warangal. 3 CIT(A)-VI, Hyderabad

4)CIT-VI, Hyderabad

5) The Departmental Representative, I.T.A.T., Hyderabad.

Description Date Intls 1. Draft dictated on Sr.P.S. 4 ITA No. 1824/Hyd/2014

Srinivas Dasari, Prop. Kanakadurga Wines, Warangal

2. Draft placed before author Sr.P.S Draft proposed & placed before AM 3 the second Member 4 Draft discussed/approved by VP second Member 5 Approved Draft comes to the Sr.P.S. Sr.P.S./PS

6. Kept for pronouncement on Sr.P S.

7. File sent to the Bench Clerk Sr.P.S. 8 Date on which file goes to the Head Clerk 9 Date of Dispatch of order