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TMI Blog2018 (2) TMI 1775X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. The order of the Ld. CIT(A) confirming the order of the A.O. is erroneous both on facts and in law in so far as it is prejudicial to the assessee. 2. The Ld. CIT(A) erred in confirming the estimation of income at 5% on Stock put to sale by merely following the decisions of the ITAT that are rendered on the basis of earlier Excise Act without appreciating the submissions on the new Excise Act and later decision of the ITAT in the case of Late Shri Mushkam, Adilabad in ITA No.94/Hyd/2017, Dated 28.04.2017. 3. The Ld. CIT(A) erred in giving a fining that sale price is not fixed in spite of specifically submitting that the sale price is fixed by the Government and if found violating it, the assessee would not only loose the license but a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered as low and therefore, the A.O. estimated the Net Profit @ 5%. In the case of N. Satyanarayana, who is also a resident of Nirmal and running wine shop in the name and style of M/s. Praja Wines at Nirmal, the Net Profit declared works out to 0.98%. By rejecting the book results, the A.O. estimated the Net Profit @ 5% on goods put to sale. In the case of Shri S. Rajendra Prasad, another resident of Nirmal, Net Profit worked out to 0.98% on sale of wines from the shop run in the name and style of M/s. Durga Wines whereas the A.O. estimated the Net Profit @ 5% on goods put to sale. 4. Aggrieved, assessees contended before the first appellate authority that in view of the change in excise policy there is no chance of selling the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Sanga Rao Amber (Page 18 of the paper book) took into account the contention that the reason for low profit was the change in the policy / State Excise Laws; Previously the liquor was sold for a price which was much more than the Maximum Retail Price (MRP) due to which profit was more but presently due to High Court directions and State Excise Laws stringency, there is no chance to sell the liquor at more than MRP besides the fact that the assessees had to pay privilege fee @13.6% for lifting of stock if it exceeds 6 times of the license fee paid. Accordingly the A.O. accepted by observing as under:- "The submissions made by the authorized representative of the assessee on 10.03.2016 is examined and considering the sale of liquor only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) have relied upon the decisions of the ITAT rendered in 2011 / 2012 whereas the Assessing Officer, under similar circumstances, made scrutiny assessments wherein the stringent change in policy as well as impact of the High Court directions were taken into consideration for the purpose of estimating the net income @ 3% and in fact in the later decisions of the Tribunal, the net income was estimated @ 3% of the cost of goods sold. Under these circumstances, consistent with the view taken by the Tribunal, cited (supra), I direct the A.O. to adopt 3% of the cost of the goods sold as the income of the assessees.
12. In the result, appeals filed by the assessees are allowed.
Order pronounced in the open Court on 08th February, 2018. X X X X Extracts X X X X X X X X Extracts X X X X
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