Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (10) TMI 389 - ITAT CHENNAI

2015 (10) TMI 389 - ITAT CHENNAI - TMI - Estimation of sale suppression on sale of liquor - Inflation of discount - Held that:- This Tribunal is of the considered opinion that the assessee might have given some discount. In the absence of any material like reference in tariff card or menu card, it cannot be ruled out that the assessee inflated the discount said to be given to corporate guests, walk in customers and happy hours discount, etc. In fact, Shri Raju, who is in-charge of Rohini Interna .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssee regarding discount, estimated the suppression at 56.33%. The CIT(Appeals), however, estimated the same at 30%. This Tribunal is of the considered opinion that by taking into consideration the nature of trade and material found during the course of survey operation and the statement recorded from the person in-charge of Bar, estimation of sale suppression at 26% would meet ends of justice. In other words, the sale suppression of liquor should be estimated at 26% instead of 56.33% estimated b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, 100% occupancy cannot be expected at every point of time - Held that:- This Tribunal is of the considered opinion that as rightly submitted by the Ld.counsel, 100% occupancy cannot be expected at every point of time. At the very same time, we can expect a reasonable rate of occupancy since the lodge is located at prime locality in the heart of the city. The fact that the assessee has suppressed the sale is established on the basis of the material found during the course of survey operation. In .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e same is confirmed.

Estimation of suppression of sale from Rohini Lodge Permit Room - Held that:- AO on the basis of the material found, estimated the suppression of sale at 47%. However, the CIT(Appeals) restricted the same to 30%. While considering an identical issue in the earlier part of this order, this Tribunal, after considering the price discount that would be given to the customers in happy hours, corporate guests and walk in customers, estimated the profit at 26%. For the v .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ities found the details of sale for the period April, 2007 to January, 2008 and the same disclose the sales at ₹ 9,40,300/-. Therefore, the claim of the assessee that the restaurant was closed three years back is totally contrary to what was found during the course of survey operation. Therefore, this Tribunal is of the considered opinion that the CIT(Appeals) has rightly confirmed the addition of ₹ 1 lakh made by the Assessing Officer. Both the appeals of the Revenue and crossobject .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

HUF, have filed appeals against the respective orders of the Commissioner of Income Tax (Appeals). The assessee in the status of individual has also filed cross-objections. Since common issue arises for consideration in all these appeals, we heard the appeals together and disposing of the same by this common order. 2. Let s first take the appeals of the Revenue in I.T.A. Nos.1484, 1487, 1488 & 1489/Mds/2012. All the four appeals are arising out of the assessment orders passed in the case of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ni International Bar, the price of liquor entered in daily stock sheet was substantially less than the price mentioned in the menu card. The assessee kept the current books in the Bar. On examination of one Shri Raju, in-charge of Rohini International Bar, it was found that suppression of sale was done from 5 to 6 years earlier. The said Shri Raju further confirmed that the Bar bill books would be destroyed and separate set of sale bills would be prepared underlying the sale price. The Investiga .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e Ld. D.R., the assessee accepted that there was suppression of sale. Accordingly, the Assessing Officer estimated the suppression of sale in Rohini International Bar at 56.33%. However, on appeal by the assessee, the CIT(Appeals), ignoring the material found on record, restricted the addition to 30% as against 56.33% estimated by the Assessing Officer. According to the Ld. D.R., when the suppression was established, there was no reason to restrict the same to 30%. 5. On the contrary, Shri S. Sr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

l explained that the assessee in fact was giving discount to corporate guests, walk in customers and happy hours discount, etc. Therefore, estimating the sale on the basis of the price mentioned in the tariff card and menu card is not justified. The Ld.counsel submitted that in fact there was no suppression of sales. Therefore, the CIT(Appeals) ought to have deleted the entire addition made by the Assessing Officer. 6. We have considered the rival submissions on either side and perused the relev .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

owever, the fact is that the liquor shops are giving discount on the liquor sold to their corporate guests, walk in customers, etc. for various reasons. One of the reasons presumably may be to attract many customers. Whatever may be the reason, the menu card should also reflect the sale price, happy hours discount and discount that may be given to corporate guests, walk in customers, etc. The menu card or tariff card said to be found during the course of survey operation does not mention or disc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sessee inflated the discount said to be given to corporate guests, walk in customers and happy hours discount, etc. In fact, Shri Raju, who is in-charge of Rohini International Bar, admitted before the authorities that the sale suppression was done from 5 to 6 years earlier. He has further admitted that bill books are destroyed and separate set of sale bills are prepared underlying the sale price. In view of this categorical statement, this Tribunal is of the considered opinion that the suppress .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

estimation of sale suppression at 26% would meet ends of justice. In other words, the sale suppression of liquor should be estimated at 26% instead of 56.33% estimated by the Assessing Officer. Accordingly, the orders of the lower authorities are modified and the Assessing Officer is directed to estimate the sale suppression on sale of liquor at Rohini International Bar at 26% instead of 56.33%. 7. Now coming to the appeals of the assessee relating to HUF status, for the assessment years 2004-0 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rselvam in his individual capacity. However, the lodging business was run by HUF headed by the above said Shri Panneerselvam. The revenue authorities, during the course of survey operation, found lodge receipts. The Assessing Officer estimated the suppression of lodge receipt at 208.84%. However, on appeal by the assessee, the CIT(Appeals) restricted the same to 50% of what was estimated by the Assessing Officer. According to the Ld. counsel, the occupancy of the lodge cannot be estimated to 100 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion made by the Assessing Officer instead of restricting the same to 50% of the estimation made by the Assessing Officer. 8. On the contrary, Shri A.V. Sreekanth, the Ld. D.R. submitted that during the course of survey operation, the revenue authorities found incriminating materials which disclose suppression of lodge receipt. On examination, the Receptionist Shri R. Krishnamurthy, who is in-charge of the lodge, admitted that as per collection bills, the total comes to ₹ 7,27,979/-. Howeve .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n the total suppression at 208.84%. After taking into consideration the room rent and other receipt of ₹ 19,63,486/- for the assessment year 2005-06, the Assessing Officer determined the quantum of suppression at ₹ 37,95,311/-. However, the CIT(Appeals) restricted the estimation made by the Assessing Officer to 50%. Therefore, according to the Ld. D.R., the CIT(Appeals) was very reasonable. On a query from the Bench, the Ld. D.R. clarified that no appeal was filed by the Revenue for .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as if the amount received was ₹ 2,35,714/- only. Therefore, the assessee has actually suppressed the receipt. The main contention of the assessee now before this Tribunal is that even though the lodge is situated in a prime locality of the city, 100% occupancy cannot be expected at every point of time. Moreover, the seized material is only for the month of January and February 2007. Therefore, the suppression cannot be interpolated for all the earlier period. This Tribunal is of the consi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ich was impounded, at ₹ 2,35,714/-. The CIT(Appeals), after taking into consideration the nature of business, has restricted the suppression of receipt from lodge at 50% of what was estimated by the Assessing Officer. In fact, the suppression was made during the entire period of business. Therefore, this Tribunal do not find any infirmity in the order of the CIT(Appeals) and accordingly the same is confirmed. 10. The next ground of appeal is with regard to estimation of suppression of sale .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n that estimation of profit at 26% would meet ends of justice. Accordingly, the orders of the lower authorities are modified and the Assessing Officer is directed to estimate 26% on suppression of liquor sales instead of 47%. 11. The assessee has taken one more ground with regard to addition of ₹ 1 lakh as income from restaurant. Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the Assessing Officer made an addition of ₹ 1 lakh towards income from Rangeetha restaurant .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

taurant for the period April, 2007 to January, 2008, which discloses the total sales at ₹ 9,40,300/-. The Assessing Officer estimated the income at ₹ 1 lakh. Therefore, the CIT(Appeals), according to the Ld. D.R., has rightly confirmed the addition made by the Assessing Officer. 13. We have considered the rival submissions on either side and perused the relevant material on record. The assessee appears to have claimed before the Assessing Officer that the restaurant was closed three .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

esult, both the appeals of the assessee are partly allowed. 15. Now let s take up Revenue s appeals for assessment years 2003-04 and 2005-06. 16. Shri A.V. Sreekanth, the Ld. Departmental Representative, submitted that the assessee was assessed in his HUF status. During the course of survey operation, the revenue authorities found suppression of lodge receipt for the months of January and February, 2007. As in the case of assessment years 2004-05 and 2006-07, the Assessing Officer estimated the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version