1993 (1) TMI 118 - AT - Income Tax

Summary

Issues:
1. Assessment of income from liquor business for the assessment year 1983-84.
2. Application of net profit rate on the sales of liquor business.
3. Validity of filing revised return under the amnesty scheme.

Analysis:

Issue 1: Assessment of income from liquor business for the assessment year 1983-84
The case involved the assessment of income from liquor business for the assessment year 1983-84. The original assessment accepted income from various sources but later reopened under section 143(2)(b) of the Income Tax Act. The Assessing Officer assessed the income from the liquor business at a higher amount than declared by the assessee. The CIT(A) then estimated the sales and applied a net profit rate, resulting in a revised income determination. The subsequent appeal by the assessee against the CIT(A)'s order led to further adjustments by the CIT(A) under section 154 of the Act. The final income determination was based on the sales figures and the application of a net profit rate.

Issue 2: Application of net profit rate on the sales of liquor business
The main contention revolved around the appropriate net profit rate to be applied to the sales of the liquor business. The Departmental Representative argued for a 5% net profit rate, while the assessee's counsel cited a different case to support a lower rate of 3.25%. The Tribunal considered the nature of the assessee's business as a retailer compared to the case of a wholesale merchant in Indian made foreign liquor. Ultimately, the Tribunal substituted the initially assessed net profit amount with a lower figure, providing relief to the assessee.

Issue 3: Validity of filing revised return under the amnesty scheme
The assessee claimed that the revised return was filed under the amnesty scheme. However, the Tribunal ruled that merely claiming a return under the amnesty scheme does not automatically qualify it as such. Full and true disclosure of income is a prerequisite for filing under the amnesty scheme, which was found lacking in this case. Therefore, the revised return was not considered to be filed under the amnesty scheme.

In conclusion, the Tribunal partly allowed all appeals and cross-objections, adjusting the income determination and net profit rate for the liquor business based on the facts and arguments presented during the proceedings.