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TMI Blog2010 (9) TMI 1138X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Assessing Officer estimated gross sale at 5% more than the purchases. According to the learned representative for the assessee the assessee purchases wines from AP Beverages Corporation Ltd. The assessee was allowed to sell the wines 30% over and above the purchase price. In other words, according to the learned representative for the assessee the maximum retail price of the wines was 30% over and above the purchase price. According to the learned representative for the assessee merely because the assessee was allowed to sell the wine 30% over and above the purchase price it does not mean that the assessee could not sell the same less than 30% margin. According to the learned representative for the assessee the assessee has all disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal deleted the addition of Rs. 3,45,000 and sustained the addition only to the extent of Rs. 53,322. As per the order of this Tribunal the gross profit ratio for the A.Y. 2001-02 was 3.68%. 4. The learned representative for the assessee further submitted that for the purpose of estimating the sales at Rs. 6,03,02,927 the Assessing Officer grossed up the purchases. The assessee also got incentive to the extent of Rs. 24,94,210 from the manufacturer on the total purchase of Rs. 5,69,15,219. Due to incentives given by the manufacturer the net cost of purchases was reduced to Rs. 5,44,21,009. The assessee recorded the sales at Rs. 5,73,36,805. According to the learned representative for the assessee, as per the computation mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns on either side and also perused the material on record. Admittedly the assessee disclosed the sale at Rs. 5,73,36,805. However, the Assessing Officer estimated the same at Rs. 6,03,02,927. The difference between the sales declared by the assessee and estimated by the Assessing Officer was added as income of the assessee. The difference of Rs. 29,66,182 comes to 5% of the purchase cost. 7. We have carefully gone through the order of this Tribunal for A.Y. 2001-02 in assessee's own case in ITA. No. 268/Hyd/05 dated 19.4.2006. After comparing the profit ratio for the A.Ys. 1997-98 to 2002-03 this Tribunal has passed the following order: "5. We have heard the learned representatives of the parties and have perused the material on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of profit at 5%. 9. For the A.Y. 2001-02, the total purchases was Rs. 2,50,72,224. The total sales was Rs. 2,69,81,342. The assessee declared the profit at 3.48%. The Assessing Officer estimated the profit at 5%. However, the Tribunal after deletion of Rs. 3,45,000 sustained the profit at 3.68%. For the A.Y. under consideration the total purchases is Rs. 5,44,21,009 after reducing the incentives given by the manufacturer. The sales declared by the assessee was Rs. 5,73,36,805. Admittedly the assessee has not maintained proper sales bills for sale of wines. Therefore, we cannot blame the Assessing Officer for rejecting the books of account. The only option available to the Assessing Officer is to estimate the profit on the basis of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice. In other words, estimation of profit at 3% of the purchases at Rs. 5,44,21,009 would meet the ends of justice. Accordingly, we direct the Assessing Officer to estimate the profit at 3% on the purchases of Rs. 5,44,21,009. 10. The assessee has raised one more ground on the ground that the CIT(A) has committed an error in appreciating the order of this Tribunal for A.Y. 2001-02. We heard the learned representative for the assessee and the learned DR. While discussing the estimation of profit, we have referred to the order of this Tribunal and we find that this Tribunal deleted the addition of Rs. 3,45,000. The operative portion of the order was extracted in the earlier part of this order. Therefore, as observed earlier what was confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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