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TMI Blog2014 (2) TMI 1232X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to expenses were produced for verifications. The details and basis of valuation of closing stock were placed on record during the course of assessment proceedings. The state excise and taxation department keeps strict control and supervision over the liquor trade carried out by the assessee. The purchases of liquor can be made by the assessee against the permits issued by the state excise department and similarly the sales of the liquor by the assessee to the retailers having 1-2 licenses can only be made against the permits issued by the State Excise Department. The AO failed to rebut the contention of the assessee that the net rebate of 16586467/- is a part of the trading results and also the gross profit. The AO has tried to mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P.N.Arora, Advocate ORDER PER BENCH ; This appeal of the Revenue arises from the order of the CIT(A), Bhatinda, dated 19.02.2013 for the assessment year 2009-10. The Revenue has raised following grounds of appeal: "1. Whether on the facts and circumstances of the case, the ld. CIT(A), Bathinda, was right in not appreciating the finding of the AO that the assessee has failed to pass on the entire rebate of ₹ 3,171,40,973.70 to the retailers and has kept the balance rebate of ₹ 1,65,86,467/- with him. 2. The appellant craves leave to add, amend or modify the grounds of appeal subsequently." 2. The brief facts of the case are that the AO made an addition of ₹ 48,16,438/- and the relevant part of the findings of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia had been curtailed down. Keeping in mind the increase of competition in market every wholesaler is putting its best efforts to increase sale so that the higher rebate can be claimed from the distilleries. In order to increase the sales the rebate is passed to the retailer holding L-2 license so that sales target5s can be achieved. In this regard, I am enclosing herewith the photocopy of the sale bills from which your goodself will find that the rebate is also passed to the ultimate retailer.." 3. From the above explanation given by the assessee a fact that emerges is that whether the rebate received by the assessee is ultimately passed in toto to the retailers as per the assessee's own version as stated above or not,. Then the counsel f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .014 To Application Rejection 3527000.00 By Interest 657589.00 To Net Profit 11770029.73 By Round off 657.72 3687395.23 36870395.23 It may not be out of place to mention here that we would have suffered huge losses if we had not received the rebate which was only possible by the team of the agents. The duty of the agent was to increase sales and offer less discounts to the retailers. In return the agents were paid reward in the form of commission." From the above explanation filed by the assessee one fact that emerges is that the total rebate remained with the assessee amounting to ₹ 1,65,86,467/- in contest to assessee's own version in paragraph (2) above, wherein it has been mentioned that all the rebate is passed on to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 145(3) of the Act. The arguments made by the ld. counsel for the assessee before the ld. CIT(A) are that the assessee furnished audited accounts/tax audit report alongwith books of account and bills/vouchers for purchase/sales of liquor and relating to expenses were produced for verifications. The details and basis of valuation of closing stock were placed on record during the course of assessment proceedings. The state excise and taxation department keeps strict control and supervision over the liquor trade carried out by the assessee. The purchases of liquor can be made by the assessee against the permits issued by the state excise department and similarly the sales of the liquor by the assessee to the retailers having 1-2 licenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T vs. K.S. Bhatia reported in 269 ITR 577 and the judgment of the Hon'ble Chhattisgarh High Court in the case of ACIT, Raipur vs. Roop Chand Tharani reported in 249 CTR 326 in which it has been held that the profits cannot be estimated without rejecting the books of account by pointing out the specific defects and recording the finding regarding the same. The contentions of the AR of the assessee are factually correct and the AO has failed to point out any discrepancy in the books of account to justify his action of estimating the income of the assessee at ₹ 16586467/- as against the income of ₹ 11770029/- declared in the profit and loss account. 6.2. Thus, in view of the facts and circumstances of the case discussed above, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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