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TMI Blog2012 (5) TMI 756X X X X Extracts X X X X X X X X Extracts X X X X ..... ed:- 7-5-2012 - Income Tax Officer Versus Gavva Rajesh Reddy, V. Srinivasa Rao, Kalakota Ram Reddy Sri Mandadi Bollampally Anjireddy, Kola Ramulu, Lingala Srikar Reddy, K. Venkatesh Babu, Bairi Ramesh, Addagatla Suresh Kumar, Karnakanti Bhoopal, Korremula Ramesh Goud, Cheruku Katamaiah, Bairi Someshwar, Macha Srinivas Goud and N. Madhusudhan SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHVAN, JUDICIAL MEMBER Appellant by : Mr. B.V. Prasad Reddy ORDER PER ASHA VIJAYARAGHAVAN, J.M; These appeals by the Revenue are directed against the orders passed by the CIT(A) VI, Hyderabad for assessment years 2007-08 2008-09. Since identical issues are involved in these appeals, they are clubbed, heard a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mstances of the case. 2. The CIT(A) ought to have upheld the estimation of sales made by the Assessing Off icer adopting 27% prof it margin on the stocks sold, duly allowing the deductions claimed by the assessee. 3. The learned CIT(A)-VI erred in considering the facts of the case, and relied upon the case decided by the Hon ble ITAT in ITA No. 591/Hyd/2011, dt. 28/07/2011 in the case of M/s Kanakadurga Wines. 4. The learned CIT(A) erred in relying on the Hon ble ITAT s order because the Hon ble ITAT in the above case referred the order of the coordinate bench of the Tribunal in the case of Manjit Singh Bagga Vs. ITO in ITA No. 371 and Others dt. 30/09/2010. The case of Manjith Singh Bagga is a huge turnover case and with a view to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rejection of books of account and also estimation of GP@30% of sales. 2. The Hon ble ITAT had directed that the net profit be estimated @ 3% of purchases. This was done after verifying the previous history of business done by the assessee. The Hon ble ITAT had followed the same decision in some other cases. 3. However, in these cases, there is no previous business done by the assessee to verify. The Assessing Officer has relied on the business practices in this trade where the sale price is much above that fixed by the Excise Dept. i.e. more than MRP. The media have reported numerous cases where liquor is sold above the MRP. 4. It is brought to the kind notice of the Hon ble Tribunal that as per the latest ACB Investigation in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stimate the profit of the assessee at 3% of the purchases or stock put for sale during the years, as noted above, are based on the decision of the Tribunal in ITA No.591/Hyd/2011 dated 28.7.2011 wherein the Tribunal has held as under:- We find that the Assessing Officer has rightly adopted the sale price at 30% over the cost of purchase to arrive at the understatement of sales of ₹ 93,65,993/- by the assessee. But the same time, the entire understatement of sales cannot be treated as undisclosed income of the assessee for the year under consideration. It is well settled law that the best guide for estimation of income after rejecting the books of accounts is either past history of the assessee or any other comparable cases. The le ..... X X X X Extracts X X X X X X X X Extracts X X X X
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