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TMI Blog2013 (5) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... ,12,880/-. The Assessing Officer noted that the assessee firm had shown total sales at ₹ 34,18,37,223/- and net profit after allowing salary to partners was shown at ₹ 59,64,037/- which gives a net profit rate of 1.74 %. The assessee had also shown interest on FDR at ₹ 1,76,507/-. During the year under consideration, the assessee has allotted licenses for running shops in the districts of Balaghat, Bhopal and Raisen for retail sale of liquor and the license fee for the year paid was ₹ 22,18,81,367/-. The Assessing Officer noticed that the net profit rate of 1.74 % shown by the assessee was on a very low side. The Assessing Officer further observed that the assessee had shown all the sales made in cash and cash memos were not maintained. The assessee stated before the Assessing Officer that its business was totally controlled and governed by Excise Rule and the Excise Department had day to day control on the business of the assessee The contractor had to display the sign board in Hindi indicating the selling price of the liquor. The assessee sold liquor at those rates. It was further submitted that the excise officers keep on visiting inspecting the liquor sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n earlier assessment years 2006-07 2007-08. The assessment order of assessment year 2008- 09 is verbatim the same as were of A.Y. 2006-07 A.Y. 2007-08 except the change in figures. As pointed out by the AR of the appellant, the issue involved in these grounds of appeal was considered by the Hon'ble ITAT in appellant s own case for assessment year 2006-07 A. Y. 2007-08. The Hon'ble ITAT in appellant s own case for assessment year 2006-07 in I.T.A.No. 78/Ind/2010 order dated 15.06.2011 held as under : Similarly. the Hon'ble ITAT in A. Y. 2007-08 in ITA No.116/Ind/ 2011 in order dated 13.04.2012 held as under: 4 . Thus we direct the Assessing Officer to compute business income by applying net profit rate of 1.77 % on the disclosed turnover of the assessee. 5. As far as interest income is concerned that is to be separately added in total income as income from other sources as the same has nothing to do with the liquor business of the assessee. Finally, the appeal of the Revenue is allowed in part. Similarly, the Hon'ble I.T.A.T. in assessment year 2007-08 in I.T.A.No. 116/Ind/2011 in order dated 13.04.2012 held as under : If the totatlity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Prasad Bhagwan Das Co. s. CIT, (1995) 82 Taxman 109,111 (MP), 4. In the cross objection, the assessee has taken following grounds :- 1. That on the facts and in the circumstances of the case and in law, the Assessing Officer s findings as to the applicability of the provisions of Section 145(3) are unlawful and injudicious hence such findings be quashed and the income as disclosed by the assessee in the return should be accepted. 2. That on the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in law and not justified in directing the Assessing Officer to assess interest income ₹ 176507/- separately as the income from other sources. Such directions are unlawful and without jurisdiction hence be quashed and it be also held that the said interest income is a part of the disclosed business income assessable u/s 28 and not u/s 56. 3. That on the facts and in the circumstances of the case and in law, the disallowance of partners remuneration claimed at ₹ 5 lacs is not justified and, therefore, be allowed. 5. It was argued by the ld. Authorized Representative that the Assessing Officer has estimated sales at two times of license ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounted sales were made by the assessee. As per the ld. CIT(A), since the quantity of liquor is regulated by the Excise Department and no discrepancy in stock or quantitative details was found by the Assessing Officer, non maintenance of sales could not alone be a basis to reject the books of account. Against this order of CIT(A), the Revenue was in appeal before us. The Tribunal vide its order dated 15th June, 2011, after giving due reasoning confirmed the findings of the CIT(A) to the effect that the Assessing Officer was not justified in rejecting books of account. The Tribunal also observed that there was uncontroverted finding in the order of CIT(A) to the effect that there was no opening or closing stock of the goods of the assessee and the books were regularly maintained which was duly audited and verified and the same was duly furnished alongwith return. The Tribunal also found that net profit rate disclosed by the assessee at 1.77 % was reasonable considering the prevailing rates in this trade. 8. In the assessment year 2007-08, the assessee had shown sales at ₹ 16.94 lakhs and the net profit declared thereon worked out at 1.43 %. The Assessing Officer applied n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars only after considering CIT(A) s order, wherein detailed finding was given against Assessing Officer s action u/s 145(3), reached to the conclusion that profit rate at 1.77 % should be applied. Thus, without recording a finding by CIT(A) with regard to Assessing Officer s action for rejection of books of account, the ld. CIT(A) was not justified in applying net profit rate of 1.77 %, which was determined by the Tribunal under different facts and circumstances, wherein due justification was given both by CIT(A) and Tribunal for not upholding the action of the Assessing Officer u/s 145(3). We found that the assessee himself has declared net profit rate of 1.89 % whereas CIT(A) has reduced the same to 1.77 %. There is no justification in this action of the CIT(A). Even though no major defects were pointed out by the Assessing Officer other than the defects of not issuing the sale bills, but the fact remains that sales of the assessee as recorded in the books of account were not verifiable. Therefore, keeping in view the totality of facts and circumstances of the case, we modify the orders of both the lower authorities and direct the Assessing Officer to work out profit of liquor tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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