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2014 (6) TMI 435
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....rance before ITAT. In accordance with direction of Hon'ble High Court, these appeals were again heard on merit and are decided afresh in the following manner. 2.2 In this appeal, the Revenue is aggrieved for deletion of addition made by the AO by estimating the sales at higher figure as well as by estimating the profit rate at 14.5%. 2.3 The rival contentions have been heard and records perused. The facts in brief are that the assessee was carrying on business of liquor contract. Return of income was filed at Rs. 1.43 crores in the status of AOP alongwith audit report in form No. 3CB and Form No. 3CD as required u/s 44AV of the I.T. Act, 1961. During the course of scrutiny assessment, the AO observed that assessee had sold country liquor through 167 outlets and IMFL & Beer from various outlets situated in its territory. The sales and GP disclosed by the assessee are as under:- Kind of liquor Total Sales (Rs.) G.P. disclosed G.P. Rate Country liquor 109764277 32897984 29.97% IMFL & Beer (Retail) 120760436 30988407 25.66% IMFL & Beer (Whole Sale) 74830781 2382557 3.18% 2.4 By observing that the assessee has not ke....
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....The purchases are proved but it is an admitted fact that the sale price is not fixed and the assesses have neither issued sale vouchers to the purchaser nor maintained these vouchers. 2. During the course of assessment proceedings, the assesses were specifically asked to furnish, shop-wise & brand-wise, details of all receipts and sale of IMCL, IMFL and Beer, which were not produced for verification. Vouchers for expenses were required to be produced. In some cases some vouchers were produced but, by and large, in majority of cases even vouchers were not produced. The assesses were also required to produce the details of sale of bottles and bardana which too were not provided and a lumpsum amount was credited on account of such sales. The same were not open to verification. Details of purchases, being regulated and as per the guidelines of the Excise Department, were produced but sale vouchers, were not produced for verification. The Assessing Officers were of the view that in the absence of sale vouchers, the assesses are at liberty to charge selling price as per their own sweet will (as the sales prices are not fixed). Since the assesses had monopoly and hav....
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....ls, as desired by the Excise department, except sale vouchers, had been maintained and all the books of accounts and supporting vouchers were generally produced and maintained in accordance with the Excise rules. Merely because the sale vouchers have not been maintained, there is no justification for rejecting books of accounts. 4. The AO's did not convince with above submission of the asessees, as the AO was unable to deduce the correct amount of sales/sale rates/GP/NP from said accounts. Accordingly, the AO rejected the books of account and trading results, u/s 145(3) of the IT Act, by holding that non-maintenance of the sale vouchers/sale register is a major defect & sales are not open to verification. The assessing officers, while rejecting books of accounts, relied upon various judgments of the Apex Court & others courts, particularly in the cases of CIT Vs. British Paints India Limited, (1991) 188 ITR 44, M/s Lalchand Wailati Ram Vs. CIT: (1978) 111 ITR 244 (P&H); M/s Bombay Cycle Stores Co. Ltd. Vs, CIT: (1958) 33 ITR 13(Bombay); SN Nama sivayam Chettier Vs, CIT: (1960) 38 ITR 579 (SC); Commissioner of Income-tax Vs. MC Millan & Co.: 38 ITR 182(SC) etc.....
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.... that there is no good proof in support of that estimate becomes irrelevant. When the estimate is not arbitrary or irrational, the best judgement assessment can not be interfered with." It is the duty of the assessee to place all facts truthfully before the AO. If he fails to do his duty he can not be allowed to call upon the AO to prove conclusively what turnover he has suppressed. That fact must be within his personal knowledge. Hence, the burden of proving that fact is on him. In the very nature of things, the estimate made may be an over estimate or an under estimate. But that is no ground for interfering with his "best judgement." b) CIT Vs Laxminarain Badridas 5 ITR (1937) 170, 180(PC):- "It has been held that in all such assessments there must necessarily be guess work, but it must be honest guess work and in that sense too the assessment must be to some extent arbitrary." c) Ganga Ram Balmokand Vs CIT 5 ITR (1973) Leh. 464:- "It can not be denied that there must be some material before the ITO on which to base his esti....
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....aimed by the assessee that internal check and control in each retail shop in such a way that no leakage of any sales or amount of sales was possible, that the excise department also frequently check the shops and heavy penalties imposed if any discrepancy is noted, that there is common retails price list which is displayed out side the shop every day. No evidence was produced ever in support of any its claim. Therefore, it is also an example of "suppresio very, suggestion falsi" Without prejudice to the earlier orders it is to mention here that estimation of the AO may be a guess work but is not arbitrary. It is based on the basis of enquiries made by the AO and the facts and material collected on the record and from the market. "Therefore, estimation of AO can not be substituted by another estimation, unless contrary evidence produced on record." It is also important to mention here that each case is different. It is well known fact that the excise department is every year giving contracts of lifting of liquor of particular areas to the highest bidder. Every years new association of persons are....
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.... it was gathered that each shop had a printed rate list which was available in regard to all the varities of CL/IMFL & Beer at which they were supposed to be sold. One such rate list pertaining to the period before 20.3.2003(from 21.3.2003 the rates were reduced) was found by one of the AO and impounded. Now that the rate list was found, at which the country liquor, IMFL and Beer were sold, it was required that the purchase price of the corresponding items/verities of the liquor be known. So that the profit margin in the corresponding items could be worked out so as to give a support to the findings of the estimation of gross profit and net profit as taken by the assessing authorities. Accordingly accountant of the AOP firm Sh. Niranjan Sharma was called to produce the original bills of purchases of CL/IMFL and Beer which was purchases by the firm. Sh. Niranjan Sharma expressed his inability to produce the purchase bills of the assessee AOP M/s rajaram Rajendra Bhandari & Party since they were claimed to be lying at Ajmer. However, he produced the purchase bills of another AOP i.e. Nizammudin Maniram and Party which operated in the area of Hanumangarh in the F.Y. 1999-2000. Though ....
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....ow to elaborate on the profit margin of country liquor/IMFL and Beer. S.No. Item Purchase price as per the bills brought By assessee for verification. The purchase price include excise duty. Sale price as per the rate list found in the course of survey (rate list was of the period before 21.3.03) Profit Percentage 1 Country liquor (200ML pouch) Rs. 2.70/- (As stated By the Accountant Niranjan Sharma Rs. 25/- 89.2% 2 IMFL aristocrat Premium whisky Rs. 138.29 Rs. 230/- 39.8% 3 Director Special whisky Rs. 109.15 Rs. 180/- 39.36% 4 Hayward Strong Rum Rs. 95.83 Rs. 160/- 40% 5 Royal Challenge Rs. 275.41 Rs. 420/- 34.42% 6 Red Kinght Whisky Rs. 156.08 Rs. 270/- 42.2% 7 Peter scotch Rs. 270.83 Rs. 470/- 42.37% 8 Signature Rs. 310.66 Rs. 470/- 33.9% 9 Old Monk Rs. 103.25 Rs. 190/- 45.65% 10 Bag piper Rum Rs. 108 Rs. 180/- 40% 11 Beer Hayward 500 Rs. 29.42 Rs. 50/- 51.16% 12 Thunder Bolt Rs. 27.41 Rs. 50/- 45.18% 13 Bullet Rs. 27.41 Rs. 50/- 45.18% Ther....
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....iquor contractors and past history and decided the appeals without giving clear cut finding/basis/reasons bringing any material on record, for reducing trading addition or upholding ad hoc addition. The CIT's(A) have not appreciated the facts & figures collected & finding given by the AO's. Form the above facts, it is noticed that the AO had passed well reasoned order after discussing the entire issue and also brought in material on record, therefore, it was duty of the CIT(A) to address the issue in an appropriate manner and not in a summery or in perfunctory manner. The CIT(A)'s have not discussed the facts of cases & summarily either reduced the addition or upheld the ad hoc additions, without giving any basis thereof. The Appellate authorities searching of definite evidence to test the validity of the additions made by the AO has transgressed into the realm of indefiniteness from the realm of guesswork for computation of income, where the books of account of assessee have been rejected by the AO, holding that it is not possible to ascertain the true income of the assessee from such books of account. The CIT(A) has not recorded any sat....
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.... It is therefore, prayed that the appellate authorities should take correct view, keeping in mind the fact that the assesses have not maintained sales vouchers, expense vouchers, stock registers etc, for determining the actual sales & GP/NP, based on the facts of the each case. The AO/CIT(A) have come to a categorical finding as to rejection of books of accounts and invoking of provisions of Section 145(3), a fare estimate was required to be made by the assessing officer and in almost all cases, the assessing officers have passed well reasoned orders and the AO have brought adequate material on record to justify the additions. Further reliance is placed on various case laws namely Director of Income Tax (Exemption) Vs. Shia Dawoodi Bohra Jamat (2012) 344 ITR 653 (Guj), CIT Vs. Deepak M Kothari (2011) 331 ITR 301 (Allahabad), Mangalore Ganesh Beedi Works Vs. CIT (2005) 25CC 329, Mysore & Anr. & Judgment of this Court reported in 199 CTR 422 (RAJ) CIT Vs. Sunil Talwar Murlidhar & Party, etc. In the case of CST Vs. H.M. Esufali H. M. Abdulali 90 ITR 271 (SC), the Hon'ble Apex Court, inter alia has observed as under:- &nb....
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....t judgment assessment, and it is the assessee himself who is to blame as he did not submit proper accounts. There was no arbitrariness in the present case on the part of the IT authorities." In the case of CIT Vs. British Paints India Ltd. 188 ITR 44 (SC) the Hon'ble court, inter alia held as under:- "It is not only the right but the duty of the AO to consider whether or not the books disclosed the true state of accounts and the correct income can be deduced there from. It is incorrect to say, as contended on behalf of the assessee, that the officer is bound to accept the system of accounting regularly employed by the assessee the correctness of which had not been questioned in the past. There is no estoppel in these matters, and the officer is not bound by the method followed in the earlier years." From the above facts it is seen that the AO, have rightly rejected incomplete/unreliable accounts and have made best judgment in estimating TO/GP/NP in these cases, after collecting the necessary material/information on records. On the other hand, the CIT(A)'s have allowed relief to the assessee's ....
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....et profit. After recording following detailed findings, the Ld. CIT(A) has restricted the addition in case of country liquor to Rs. 5 lacs and in case of IMFL/Beer to Rs. 4 lacs. There is no dispute to the proposition that once the A.O. has rejected books results by applying provisions of Section 145(3) of the Act, best judgment assessment is required to be done. As per our considered view, "best judgment assessment" is not a provision to penalize the assessee, but is a machinery provision to enable the Revenue to assess a person when situation warrants such an assessment. The order u/s.144 is to be made to the best of the judgment of the Assessing Officer which means, the order has to be rational and is to be best on an honest guess work for which some valid basis is available to the Assessing Officer. The order involves exercise of 'judgment' by the Officer. A fair estimation of income has to be made, the Assessing Officer should take into consideration the totality of the facts and circumstances of the case in addition to proper evaluation of the material furnished by the assessee and collected by him by his own efforts. Where "best judgment assessment" power has been con....
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.... of law, is the best guideline to arrive at a just G.P. rate to estimate the income of the assessee. The assessee has disclosed G.P. rate of 29.97% on sales of Rs. 10,97,64,227/- as compared to G.P. rate of 32.34% on sales of Rs. 9,02,82,048/- last year in the case of country liquor. The reason for the decline in the G.P. rate for this year has been shown by the assessee that during the year, the Government had increased contract amount by 15% in comparison to the last year; there was drought in Rajasthan for the last four consecutive years and stiff competition was there in the trade. In the case of IMFL & Beer (Retail), the AO has applied G.P. rate of 48% on the estimated sales on the basis that in the case of Joraram & Party, the G.P. disclosed was 64%; in the case of M/s Banna Ali & Girdhari Singh & Party (Jhunjhunu Group) during AY 1999-2000, the G.P. was shown at 48%. In both the matters of Country Liquor and IMFL & Beer, the AO, while applying G.P. rate of 70% and 48% respectively, has not whispered as to how the cited instances by him are comparable with the case of assessee and as to why the past history of the assessee should be ignored. In para No. 1.11 of the first appe....
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....with gross profit of Rs. 2,98,74,852/-. The same has been added in the income of the assessee on account of IMFL & Beer. We agree with the finding of the ld. CIT(A) that addition made is not logical, since it is excessive in view of the estimation made in the sales. The difference in the circumstances of the assessee with that of M/s Banna Ali Girdhari & Party has also been shown with this submission that the business of assessee is 5 times larger than them. Under these circumstances, we are of the view that since the assessee had shown better g.p. rate in IMFL & Beer sales, there was no much scope for the AO for interference and the possibility of sales out of books, which held unreliable has already been taken into account by the ld. CIT(A). We fully agree with the observations of the ld. CIT(A) that the extent of profit in the nature of liquor business depends upon several factors i.e. geographical condition of the area, social and economic condition of the people in the area, mixing habit of the population; rapport amongst the contractors of the area; their experience and economic position; political position and status of the population in area and excise policy of the Governm....
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....—यी हैं । अपीलारà¥à¤¥à¥€ ने अलग से विदà¥à¤µà¤¾à¤¨ कर निरà¥à¤§à¤¾à¤°à¤£ अधिकारी दà¥à¤µà¤¾à¤°à¤¾ आयकर अधिनियम की धारा 145 ( 3 ) के लगाये जाने के विरà¥à¤¦à¥à¤§ अपील का बिनà¥à¤¦à¥ नहीं बनाया हैं । अतः पà¥à¤°à¤¸à¥à¤¤à¥à¤¤ मामले में आयकर अधिनियम की धारा 145 ( 3 ) के लगाये जाने को सही माना जाता हैं । 1.....
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....5,83,261/- 60,80,68,756/- खरीद 9,23,36,814/- 21,97,22,779/- 31,20,59,593/- कà¥à¤² शà¥à¤¦à¥à¤§ लाठ2,31,92,120/- पà¥à¤°à¤¤à¤¿à¤¶à¤¤ 3.81 पà¥à¤°à¤¤à¤¿à¤¶à¤¤ मैं बनà¥à¤¨à¤¾ अली गिरधारी सिंह à¤à¤‚ड पारà¥à¤Ÿà¥€ () à¤à¥à¤‚à¤à¥à¤¨à¥‚ गà¥à¤°à¥à¤ª) नि. वरà¥à¤· 1999-00) देशी मदिरा विदेशी मदिरा कल व बियर बिकà¥à¤°à¥€ 5,00,07,552/- 2,57, 17, 120/- 7,57,24,672/- खरीद 1,43,44,201/- 1,28,95,241/- 2,72,39,442/- कà¥à¤² शà¥à¤¦à¥à¤§ लाठपà¥à¤°à¤¤à¤¿à¤¶à¤¤ 6,49,726/- (1.30 पà¥à¤°à¤¤à¤¿à¤¶à¤¤) -93,205/- 5,56....
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....¥€. à¤à¤®. डी. खान à¤à¤‚ड पारà¥à¤Ÿà¥€ (नि. वरà¥à¤· 1994-95) देशी मदिरा विदेशी मदिरा कल व बियर 2,86,00,000/- 1,53,00,000/- 4,39,00,000/- बिकà¥à¤°à¥€ खरीद कà¥à¤² शà¥à¤¦à¥à¤§ लाठ33,30,000/- 31,03,000/- 2,27,000/- पà¥à¤°à¤¤à¤¿à¤¶à¤¤ 11.64 पà¥à¤°à¤¤à¤¿à¤¶à¤¤ - 21 पà¥à¤°à¤¤à¤¿à¤¶à¤¤ 0.53 पà¥à¤°à¤¤à¤¿à¤¶à¤¤ Document 4 1.18 उपरोकà¥à¤¤ चारà¥à¤Ÿ से सà¥à¤ªà¤·à¥à¤Ÿ है कि अपीलारà¥à¤¥à¥€ के मामले में बिकà¥à¤°à¥€ कर निरà¥à¤§à¤¾à¤°à¤£ वà....
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....धिकारी के तरà¥à¤• से सहमत नही हूठकि सकल लाठकी दर को विà¤à¤¿à¤¨à¥à¤¨ मामलों में तà¥à¤²à¤¨à¤¾ का आधार बनाया जाय । राजसà¥à¤¥à¤¾à¤¨ राजà¥à¤¯ की आबकारी नीति में मदिरा ठेकेदार को लाठया हानि के लिये शारà¥à¤Ÿ लाइसेंस फीस की महतà¥à¤µà¤ªà¥‚रà¥à¤£ à¤à¥‚मिका है। कà¥à¤² कà¥à¤·à¥‡à¤¤à¥à¤°à¥‹à¤‚ में ....
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....¨ नहीं हैं । अपीलारà¥à¤¥à¥€ के वà¥à¤¯à¤¾à¤ªà¤¾à¤° का कà¥à¤·à¥‡à¤¤à¥à¤° राषà¥à¤Ÿà¥à¤°à¥€à¤¯ राजमारà¥à¤— में सà¥à¤¥à¤¿à¤¤ होने के कारण यह संà¤à¤µ है कि कम कीमत पर अधिक बिकà¥à¤°à¥€ की गयी हैं । अतः यदà¥à¤¯à¤ªà¤¿ बहà¥à¤¤ से मामले की तà¥à¤²à¤¨à¤¾ में देशी मदिरा व à¤à¤¾à¤°à¤¤ निरà¥à¤®à¤¿à¤¤ विदेशी मदिरा व बियर के वà¥à¤¯à¤¾à¤ªà¤¾à....
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....Ÿà¥‡à¤‚डर की फीस शारà¥à¤Ÿ लाइसेंस शà¥à¤¦à¥à¤§ राशि शà¥à¤¦à¥à¤§ राशि का 250 पà¥à¤°à¤¤à¤¿à¤¶à¤¤ ( अनà¥à¤®à¤¾à¤¨à¤¿à¤¤ विकà¥à¤°à¥€) 5,53, 15,000/- 79,25,712/- 4,73,89,288/- 11,84,73,220/- दरà¥à¤¶à¤¾à¤¯à¥€ गयी 5 पà¥à¤°à¤¤à¤¿à¤¶à¤¤ की दर से दरà¥à¤¶à¤¾à¤¯à¤¾ गया बिकà¥à¤°à¥€ अनà¥à¤®à¤¾à¤¨à¤¿à¤¤ लाठलाठ10,97,64,277/- 59,23,661/- 1,88,06,459/- 1.20 उपरोकà¥à¤¤ चारà¥à¤Ÿ से सà¥à¤ªà¤·à¥à¤Ÿ है कि देशी मदिरा के वà¥à¤¯à¤µà¤¸à¤¾à¤¯ में à¤....
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....à¥à¤²à¤¨à¤¾ में मौजूदा वरà¥à¤· में 29.97 पà¥à¤°à¤¤à¤¿à¤¶à¤¤ के सकल लाठकी दर को सà¥à¤ªà¤·à¥à¤Ÿ करता है । विदà¥à¤µà¤¾à¤¨ कर निरà¥à¤§à¤¾à¤°à¤£ अधिकारी ने दरà¥à¤¶à¤¾à¤¯à¥€ गयी विकà¥à¤°à¥€ रूपये 10,97, 64, 277/- के सà¥à¤¥à¤¾à¤¨ पर रूपये 11,52,52,490/- ली है तथा सकल लाठकी दर 70 पà¥à¤°à¤¤à¤¿à¤¶à¤¤ मानते हà¥à¤¯à¥‡ देशी मदिरा के वà¥à¤¯à¤µà¤¸à¤¾à¤¯ की आय में 4,77,78,760/- रà....
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....¤–ातों में दिखाने से रह गयी हो । विदà¥à¤µà¤¾à¤¨ कर निरà¥à¤§à¤¾à¤°à¤£ अधिकारी दà¥à¤µà¤¾à¤°à¤¾ घोषित बिकà¥à¤°à¥€ रूपà¥à¤¯à¥‡ 10,97, 64, 277/- के सà¥à¤¥à¤¾à¤¨ पर रूपà¥à¤¯à¥‡ 11,52,52,490 /- लिये जाने का कोई औचितà¥à¤¯ नहीं हैं। अनà¥à¤®à¤¾à¤¨ के आधार में माना जाता Document 6 है कि 5,00,000/- रूपये की बिकà¥à¤°à¥€ खातों में दिखाने से रह गयà....
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....ªà¤¿à¤›à¤²à¥‡ वरà¥à¤· यह 90.25 पà¥à¤°à¤¤à¤¿à¤¶à¤¤ थी। मौजूदा वरà¥à¤· में खरीद 8,34,02,479 /- रूपये रह गयी है जबकि पिछले वरà¥à¤· यह 11, 18,89,419 /- रूपये थी। बिकà¥à¤°à¥€ की राशि में à¤à¥€ कमी आयी हैं, परनà¥à¤¤à¥ सकल लाठ1,30,22,000/- रूपये से बढ़कर 3,09,87,128/- रूपये हो गया हैं । विदà¥à¤µà¤¾à¤¨ कर निरà¥à¤§à¤¾à¤°à¤£ अधिकारी ने अपीलारà¥à¤¥à¥€ ....
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....¿à¤°à¥à¤®à¤¿à¤¤ विदेशी मदिरा व वियर के संयà¥à¤•à¥à¤¤ शà¥à¤¦à¥à¤§ लाठकी सà¥à¤¥à¤¿à¤¤à¤¿ तथा विदेशी मदिरा के मामले में पिछले वरà¥à¤· की तà¥à¤²à¤¨à¤¾ में बेहतर सकल लाठकी दर को देखते हà¥à¤¯à¥‡ तथा अनà¥à¤¯ तà¥à¤²à¤¨à¤¾à¤¤à¥à¤®à¤• मामले को देखते हà¥à¤¯à¥‡ में विदà¥à¤µà¤¾à¤¨ कर निरà¥à¤§à¤¾à¤°à¤£ अधिकारी दà¥à¤µà¤¾à¤°à¤¾ à¤à¤¾à¤°à....