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2014 (2) TMI 1232 - AT - Income TaxAddition to rebate to the retailers - CIT(A) deleted the addition - Held that:- We concur with the findings of the ld. CIT(A) that the A.O. has failed to record any finding in the assessment order that the case of the assessee is akin to the provisions of section 145(3) of the Act. The arguments made by the ld. counsel for the assessee before the ld. CIT(A) are that the assessee furnished audited accounts/tax audit report alongwith books of account and bills/vouchers for purchase/sales of liquor and relating to expenses were produced for verifications. The details and basis of valuation of closing stock were placed on record during the course of assessment proceedings. The state excise and taxation department keeps strict control and supervision over the liquor trade carried out by the assessee. The purchases of liquor can be made by the assessee against the permits issued by the state excise department and similarly the sales of the liquor by the assessee to the retailers having 1-2 licenses can only be made against the permits issued by the State Excise Department. The AO failed to rebut the contention of the assessee that the net rebate of ₹ 16586467/- is a part of the trading results and also the gross profit. The AO has tried to make out a case that the above stated amount of ₹ 16586467/- is the income of the assessee as per his own version by twisting the contentions of the assessee in written reply filed during the course of assessment proceedings by recording the finding that “ a fact that emerges is that whether the rebate received by the assessee is ultimately passed in toto to the retailers as per the assessee’s won version as stated above or not” because the word in toto has been introduced by the AO but the counsel of the assessee did not use this word in the written reply. The details of rebate received from the sellers from whom the liquor was purchased and paid to the purchasers L-2 License holders to whom the liquor was sold, alongwith the supporting evidence was filed before the AO during the course of assessment proceedings and no defect was pointed out by the AO either during the course of the assessment proceeding or in the assessment order. No opportunity was allowed by the AO to the assessee before making the addition of ₹ 48,16,438/-. The contentions of the AR of the assessee are factually correct and the AO has failed to point out any discrepancy in the books of account to justify his action of estimating the income of the assessee at ₹ 16586467/- as against the income of ₹ 11770029/- declared in the profit and loss account. - Decided against revenue
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