9911796707
TMI Blog2022 (9) TMI 1629X X X X Extracts X X X X X X X X Extracts X X X X ..... which there is a price band of fixed MSP (Minimum selling price) and MRP (Maximum retail price). This policy is effective since 15.01.2008 / 15.01.2009 and the assessee has filed a copy of Gazette to Ld. CIT(A), which is very clear from appeal-order passed by Ld. CIT(A) itself. Now as per new policy, a retailer cannot charge more than MRP from customer. HELD THAT:- As assessee has duly filed a copy of the gazette to demonstrate the new excise policy to Ld. CIT(A). On a careful reading of the order of Ld. CIT(A), we find that the Ld. CIT(A) has considered the submissions of assessee at length and after a careful consideration, came to accept that the decision in Badri Prasad Bhagwandas (supra) is not applicable to assessee. We further observe that the Ld. DR representing the revenue could not rebut the findings of Ld. CIT(A) with respect to non-applicability of the decision. Decided against revenue. Estimation of sales and profits - It is an admitted fact by assessee that the sales-invoices and quantitative details are not maintained. Hence, suffice it to say, this is a significant lapse by assessee which makes the books of account incomplete, warranting rejection of books u/s 145( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, rejected books of account by invoking section 145(3) of the Act. Ld. AO, thereafter, estimated the sales and net profit of assessee at Rs. 45,75,27,240/- and Rs. 2,28,76,362/- respectively as against sales of Rs. 20,75,00,239/- and loss of Rs. 3,93,04,468/- disclosed by assessee, following the decision of Hon ble Jurisdictional High Court of Madhya Pradesh in Badri Prasad Bhagwan Das Co. Vs. CIT MCC No. 202 of 1985, dated 11.10.1994. Accordingly, Ld. AO made addition. 3. Being aggrieved, the assessee filed appeal to Ld. CIT(A). During appellate-proceeding, the assessee made a detailed submission. On consideration of the same, the Ld. CIT(A) deleted the entire addition by concluding thus: 4.2 The Appellant had filed his return for A.Y 2016-17 declaring loss of Rs. 39304468 /-. The Ld AO rejected books by invoking provisions of section 145(3) of the Act for the reasons mentioned in Para 4 above. The ld. A.O relying upon the Judgment of Hon'ble high court of M.P in case of Badri Prasad Bhagwan das Co.(supra) estimated Sales at 2.5 times of the License fees and net Profit at 5% on the estimated sales. No specific item has been pointed out by the ld. AO showing incorrect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and Net Profit rate was between 1.64 % to 3.01 % in the succeeding years. Such financial results should have been compared with the results of the similar nature of trade to arrive at justifiable income. The estimation of sales @ 2.5 times of the license fee and applying net profit rate of 5% on the sales so arrived is based on the Judgment of Hon'ble M.P. High Court in case of Badri Prasad Bhagwan das (supra). The assessment order was passed in year 1976-77. The Ld. AO has failed to consider all the aspects which are entirely different in Appellant's case from Badri Prasad Bhagwandas Co. At that time the excise policy was totally different. There was no control of the Government over the sales price and the Licensee was free to sale liquor at the price as per the prevailing market but now the situation has been changed. Now State Government has issued excise policy in case of liquor and accordingly, fixed MSP i.e minimum selling price and MRP i.e. Maximum retail price. This policy is effective since 15 January 2008 and 15.01.2009. The retailer cannot charge any amount to the customer at its will. The basic License fees has nothing to do with the purchase quantity. Licens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Ld. Assessing Officer is hereby deleted. This ground of appeal is allowed. 4. Dissatisfied with the order of Ld. CIT(A), the revenue has now filed this appeal and now before us. 5. We think it more appropriate to first deal with Ground No. 2 and thereafter Ground No. 1 instead of going in seriatim. Ground No. 2: 6. This Ground reads as under: 2. Whether on facts and circumstances of the case, the ld. CIT(A) was justified holding that estimation of sales and profit made by the AO based on the decision of the Hon'ble Jurisdictional High court in the case of Badri Prasad Bhagwan Das Co. (MCC No.202 of 1985, 11.10.1994), is unjustified. 7. Apropos this Ground, Ld. DR placed heavy reliance on the observations made by Ld. AO. He submitted that the assessee is engaged in liquor business and the assessee has neither issued sales invoices to the buyers nor maintained quantitative-details of the goods sold. He submitted that the assessee has claimed to have maintained sales data on excel-sheets on daily basis and used them as basis for recording sales in the books of account. He submitted that in absence of proper sales invoices and quantitative details, financial results of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y incorporated in the appeal order of Ld. CIT(A). We further observe from Page No. 12 of the appeal-order of Ld. CIT(A) that the assessee has duly filed a copy of the gazette to demonstrate the new excise policy to Ld. CIT(A). On a careful reading of the order of Ld. CIT(A), we find that the Ld. CIT(A) has considered the submissions of assessee at length and after a careful consideration, came to accept that the decision in Badri Prasad Bhagwandas (supra) is not applicable to assessee. We further observe that the Ld. DR representing the revenue could not rebut the findings of Ld. CIT(A) with respect to non-applicability of the decision. Being so, we do not find any merit in the Ground raised by revenue. Accordingly, we are inclined to dismiss Ground No. 2. Ground No. 1: 10. This Ground reads as under: 1. Whether on facts and circumstances of the case, the Ld. CIT(A) was justified in deleting the addition not considering the fact that the assessee has not been able to establish the true sales figures and not submitted sales bills and vouchers and quantitative details. 11. As noted earlier, Ld. DR submitted that the assessee is engaged in the liquor business and the assessee has neit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctically not possible to issue invoices but, however, the assessee has maintained excel-sheets on daily basis and the same are used for recording sales in the books of account. Ld. AR submitted that having regard to the practical difficulties involved in issuing sales-invoices and maintaining quantitative-details, coupled with the fact that the business of assessee is perfectly regulated by Govt., the system of excel-sheets adopted by assessee should not be viewed otherwise. Therefore, according to Ld. AR, the Ld. AO was not justified to reject the books of assessee by invoking section 145(3). 13. Ld. AR submitted that even if the Ld. AO has rejected books of account, the addition made by Ld. AO on the basis of formula adopted in Badri Prasad Bhagwandas (supra) cannot be given credence because the said decision is not applicable to the assessee. Ld. AR further submitted that since the new excise policy gives MRP (Maximum Retail Price) and the license is issued by Govt. on year to year basis for one year only, one can easily compute the maximum possible sales of a year on the basis of MRP. Ld. AR carried us to Page No. 13 14 of the order of Ld. CIT(A) and pointed out that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing MRP. In fact, the Ld. AO has himself mentioned on Page No. 11 of the assessment-order: From the above reply it can be easily established that all the sales happening in the retail outlets is happening in a manner which cannot be verified. All the sale is recorded in loose papers and there are no bills and vouchers issued in the shop to establish the daily sale of the shop. Also, in liquor business price varies between MSP and MRP and without bills and vouchers it cannot be established the price at which sale is happening. In the underlines findings, the Ld. AO has himself mentioned that the prices vary between MSP and MRP and it cannot be established the price at which sale is happening. By mentioning so, the Ld. AO clearly accepts that the MRP is the highest selling price. As a matter of fact, we also observe that it is not a case of revenue that the assessee has made any sale beyond MRP. Therefore, in this factual backdrop which is acceded to by Ld. AO himself, there can hardly be any reason to ignore the maximum possible sales of the year on the basis of MRP, which as mentioned in the order of Ld. CIT(A) was Rs. 19,95,07,456/-. Since the assessee has already declared sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
