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TMI Blog1996 (9) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... ad 16 shops in Jodhpur city and 7 shops in rural areas, and that the sales were completely unvouched, estimated the total sales at Rs. 4,60,00,000 and applied a G.P. rate of 4.5% thereon, which resulted in an addition of Rs. 2,22,875. The CIT(A) held that the estimation of sales at Rs. 4,60,00,000 did not suffer from any infirmity, but considering the addition to be on higher side, restricted it to Rs. 1,50,000. 3. Shri N.M. Ranka, Advocate, appearing for the assessee, submitted that in the preceding year the contract was with M/s Habeeb Mohammed Murlidhar & Party, whose some of the partners were partners in the present firm also. The erstwhile firm, Shri Ranka submitted, had shown a G.P. rate of 3.34% and an addition of Rs. 50,000 was mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no reason to sustain any addition. 4. Shri A.K. Singh, the learned Departmental Representative submitted that the assessee almost enjoyed a monopoly in the city of Jodhpur in as much as that it had 16 shops in Jodhpur alone. Further, it is undisputed, he submitted that unlike other commodities, liquor is not subjected to price restriction as no prices are printed on the packaging. This enabled the assessee to charge, as much as it could and earn higher profits. Moreover, the AO had arrived at the G.P. rate of 4.5% on the basis of the selling prices given by the assessee in respect of various branches, hence, there was all the justification to sustain the addition more so when applicability of s. 145 is not disputed. 5. We have duly c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a case where the assessee might have sold a bottle of IMFL for, say Rs. 120 and recorded in the books as Rs. 100. In such a case, in common parlance it can be said that there is suppression of sales, but so far as IT Act is concerned, it can be said that profit to the extent of Rs. 20 is suppressed and not brought to tax. There can be another situation also. The assessee may have purchased 100 bottles and sold all of them. The purchases are recorded, but sales of 20 bottles are not at all recorded. This is undoubtedly suppression of sales, but again, it has to be appreciated that what has escaped tax is only the profit margin on these 20 bottles. The entire sales value is not exigible to tax. The cost thereof has to be allowed against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the assumption that the assessee was also dealing in country liquor. However, that is not the case. In the circumstances, we are of the view that an addition of Rs. 1,00,000 would take care of all the adverse circumstances like non-recording of sales or recording the same at lower prices. We, therefore, give a relief of Rs. 50,000 to the assessee and sustain the addition to the extent of Rs. 1,00,000. 10. The next issue relates to the grant of registration to the assessee-firm. It was observed by the AO that while submitting the tender to the State Excise authorities, names of 15 partners were mentioned. This information, the AO obtained from the Excise authorities. Thus, according to the Excise Department those fifteen persons were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... several excise rules of the State, to which we shall refer to later. He also placed reliance on the decisions reported in Jer & Co. vs. CIT (1971) 79 ITR 546 (SC), CIT vs. Three Aces (1989) 176 ITR 160 (AP) and CIT vs. Omparkash Prem Chand & Co. (1996) 134 CTR (MP) 342 : (1996) 86 Taxman 376 (MP). 12. The learned Departmental Representative raised a preliminary objection that the assessee should have filed a separate appeal against the order cancelling the registration, firstly because it was a matter separately appealable under the law, and secondly, the order cancelling the registration was a separate order and was not forming part of the assessment order which was also appealed against. The objection of the Departmental Representative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... encee and no licence shall be sold or transferred without obtaining previous permission in writing from the licencing authority: Provided that deletion(s) or substitution(s) of name(s) of co- licencees constituting a particular licence or in from running licence shall be sanctioned by the Excise commission on such terms and conditions as he thinks fit." 16. Subsequently separate conditions for both types of licence have also been prescribed. Condition No. 21 in case of licence for IMFL is almost analogous to condition No. 3 in the licence for country liquor. Of course, separate conditions have been prescribed subsequent to the year with which we are concerned. But it has to be borne in mind that these are all procedural matters, and hence ..... X X X X Extracts X X X X X X X X Extracts X X X X
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