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TMI Blog2013 (8) TMI 626X X X X Extracts X X X X X X X X Extracts X X X X ..... ales turnover in these two appeals. 3. Briefly, the facts as taken from ITA No.415/Hyd/13 are the assessee a partnership firm is engaged in the business of retail trade in liquor. For the assessment year under dispute, the assessee filed its return of income on 31-10-2007 declaring total income from liquor trade at Rs.2,52,548/-. Subsequently, in pursuance to a notice issued u/s 148, the assessment was reopened and in the course of reassessment proceedings, the assessee though appeared and produced certain information but did not produce the books of accounts. The Assessing Officer therefore proceeded to complete the assessment by estimating the profit . While doing so, the Assessing Officer relied upon a circular of the State Government in GOMS No.184 dated 7-2-2005 and estimated the profit by applying the rate of 27% on ordinary liquor, the rate of 20% on the medium and premium brand and 25% on beer and after reducing there from the expenses determined the net profit at Rs.38,76,660/- which was added to the total income returned by the assessee. The assessee being aggrieved of the assessment order preferred an appeal before the CIT (A). 4. The CIT (A) though upheld the action o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en able to bring to our notice any contrary decision of the Tribunal or any High Court wherein profit in cases of similar nature of business has been estimated at more than 5%. In aforesaid view of the matter, we are not inclined to interfere with the order passed by the CIT (A) which is accordingly confirmed. 6. In the result, the appeals filed by the department are dismissed. ITA Nos. 410 to 414/Hyd/13:- 7. The sole grievance of the department which is common in the aforesaid appeals is with regard to CIT (A) deleting the penalty imposed u/s 271(1)(c ) of the Act. 8. Briefly, the facts relating to this issue in dispute are the assessee is a firm carrying on business in retail trade of liquor. The assessee fled its return of income for the aforesaid assessment years by declaring income as under:- Asstt. Year income declared (Rs.) 2002-03 31,419 2003-04 1,75,987 2004-05 1,75,987 5 2005-06 40,302 2006-07 9,54,660 A search and seizure operation u/s 132 of the Act was conducted on 12-4-2005 in respect of bank account maintained by the assessee with Syndicate Bank, Kukatpally, Hyderabad. During the assessment proceedings, the assessee produced books of accounts, vouche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was on account of estimation of profit , n o penalty can be imposed u/s 271(1)(c ) of the Act. The Assessing Officer however rejected the explanation of the assessee and proceeded to impose minimum penalty u/s 271(1)(c ) of the Act for all the aforesaid assessment year. The assessee being aggrieved of the order passed imposing penalty u/s 271(1)( c) of the Act preferred appeals before the CIT (A). 10. Before the first appellate authority, the assessee contended that the Assessing Officer has imposed penalty simply relying upon the assessment order wherein profit was estimated after rejecting the books of accounts. It was submitted that without pointing out any defect or discrepancy in the books of accounts or any concealment of income noticed during the course of search operations u/s 132 of the Act, no penalty could be imposed u/s 271(1)(c ) of the Act. In support of its contention, the assessee also relied upon certain decisions of Income-tax Appellate Tribunal. The CIT (A) after considering the submissions of the assessee deleted the penalty by observing as under:- "5.3 I have considered carefully the facts and evidence. It is a settled law that penalty under section 271(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... similar is the case with respect to these issues also I hold that there is no concealment of income or the filing of inaccurate particulars by the appellant. No penalty is leviable on these issues as well. 5.6 Given the above facts and circumstances I hold that the penalties levied in all the five assessment years in question deserve to be cancelled and the assessing officer is directed as such. 11. The learned Departmental Representative submitted that even in a case of estimation of income also penalty u/s 271(1) (c) can be imposed. In support of such contention, the learned Departmental Representative relied upon following decisions:- i) Addl. CIT vs. Chandrakantha and another (205 ITR 607) (MP) ii) CIT vs. Md. Warasat Hussain (Patna) 171 ITR 405 (Patna) iii) A.M. Shah & Co., vs. CIT 238 ITR 415 (Guj.) iv) CIT vs. Krishna Swamy and Sons 219 ITR 157 (Mad.) 12. The learned authorised representative for the assessee, on the other hand, strongly supporting the order of CIT (A) submitted that only because of non maintenance of sale bills, the books of accounts have been rejected. He further submitted that for imposing penalty u/s 271(1)(c ) of the Act, the Assessing Officer mu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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