AI Drafter 
TaxTMI 
TaxTMI 
2017 (8) TMI 606
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....business of (IMFL) liquor trade and for the assessment year 2011-12 the Assessing Officer estimated the income @ 20% on total sales of Rs. 2,86,75,398/- and determined the net profit of Rs. 71,05,890/-. The assessee went on appeal before the CIT(A) and the CIT(A) restricted the net profit @ 10% on total sales. 3. On being aggrieved assessee carried the matter in appeal before the Tribunal. 4. The Ld. Counsel for the assessee has submitted that the coordinate bench of the Tribunal in the similar lines of the business considered the very similar issue and restricted the estimation at 5% of the purchase price, in ITA Nos.65&66/Vizag/2012 dated 3.3.2014 in the case of T. Appalaswamy and submitted that the same may be followed. 5. The L....
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....not applicable to the facts of the present case. The case before the Hon'ble A.P. High Court was that the assessee is into the business of trading in arrack, whereas it is in the business of dealing in IMFL. The assessee further contended that IMFL trade was controlled by the State Government through A.P. State Beverages Corporation Ltd. and the prices of the products are fixed by the State Government. The assessee being a license holder of State Government cannot sell the products over and above the MRP fixed by the State Government. We find force in the arguments of the assessee for the reason that the A.O. has estimated the net profit by relying upon the decision of A.P. High Court in the case of CIT Vs. R. Narayana Rao in ITA No.3 of 20....
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....iness in Indian made foreign liquor has to be estimated at 5% of the purchases made by the assessee. Therefore, following the decision of the ITAT Hyderabad bench, we set aside the order of the CIT(A) and direct the assessing officer to estimate the profit from the wine business of the assessee by applying the rate of 5% of the purchases made net of all other deductions. The assessing officer should also bear in mind that in no case the income determined should be below the income returned." 9. Considering the facts and circumstances of this case and also respectfully following the ratios of coordinate bench, we are of the view that the net profit estimated by the A.O. by relying upon the decision of Hon'ble A.P. High Court (supra)....
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....of Rs. 6,78,000/-. The A.O. accepted the source of Rs. 37,57,257/- and made the addition of remaining amount of Rs. 13,22,611/- as unexplained investment. Aggrieved by the order of the A.O., the assessee went on appeal before the CIT(A) and the Ld. CIT(A) confirmed the addition made by the A.O. as per the discussion made in the CIT(A) order as under: "In the present case also the appellant failed to prove that the amounts under dispute relate or, are referable to undisclosed income from known or undisclosed sources i.e. the business, whose income is already estimated. Especially these amounts which have been added by the A.O. relate to such period where the business has just commenced or not yet commenced. So the poughing back of p....
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.... credit is allowed to unexplained investment from the estimated income, the net profit would be Rs. 1,11,159/-, which is not sufficient to meet the drawings of the assessee. The assessee has not furnished the details of the drawings, household expenditure, investments made by the assessee other than in business, etc. The assessee is an individual. Since the investment was made in the beginning of the month for payment of license fee and for first purchase of liquor and the assessee could not explain the source the reliance placed by the assessee in the case law cited (supra) are not applicable and the facts are clearly distinguishable as discussed above. During the appeal hearing also, the assessee did not place any evidence to establish th....