TMI Blog2016 (7) TMI 379X X X X Extracts X X X X X X X X Extracts X X X X ..... ontrary decision is placed on record by the revenue to take any other view of the matter than the view so taken by the coordinate bench. Therefore, we direct the A.O. to estimate the net profit of 5% on total purchases net of all deductions. Ordered accordingly. - I.T.A.No.96/Vizag/2016, I.T.A.No.97/Vizag/2016, I.T.A.No.98/Vizag/2016, I.T.A.No.102/Vizag/2016, I.T.A.No.103/Vizag/2016, I.T.A.No.113/Vizag/2016 - - - Dated:- 2-6-2016 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER For The Appellant : Shri S.V. Satyanarayana,AR For The Respondent : Shri K. Ravi, DR ORDER PER G. MANJUNATHA, Accountant Member: These six appeals filed by the different assessees are directed against the sep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nished by the assessee, observed that the assessee has not maintained any stock register and also sales bills do not contain quantitative and qualitative details, and hence, the net profit admitted could not be accepted. With these observations, issued a show cause notice and asked to explain why the books of accounts should not be rejected and profit shall not be estimated @ 20% of total purchases. 3. In response to the show cause notice, the assessee has filed written submission and contended that the net profit proposed by you is excessive when compared to the nature of business. The assessee further submitted that it has maintained regular books of accounts and also bills vouchers in respect of purchase and sales, therefore, your p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit of 20% on total stock put for sale. While doing so, the A.O. has relied upon the decision of Hon ble Andhra Pradesh High Court in the case of CIT Vs. R. Narayana Rao in ITA No.3/Vizag/2003 dated 21.6.2011, wherein the Hon ble A.P. High Court held that estimation of net profit at 16% on purchase price would be reasonable. 5. Aggrieved by the CIT(A) order, the assessee preferred an appeal before the CIT(A). Before the CIT(A), the assessee reiterated the submissions made before the A.O. The assessee further submitted that it is into the business of dealing in IMFL which was controlled by the State Government through A.P. State Beverages Corporation Ltd. The A.P. State Beverages Corporation Ltd. while fixing the MRP of the goods has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 40% higher than the MRP and also resorted to lose sale of liquor and other facts and circumstances of the case, direct the A.O. to estimate the net profit of 10% on purchase price. Aggrieved by the CIT(A) order the assessee is in appeal before us. 7. The Ld. A.R. for the assessee submitted that the CIT(A) is erred in estimating net profit of 10% on total purchase put for sale. The A.R. further submitted that the issue involved in this appeal is squarely covered by the decision of ITAT, Visakhapatnam bench in various judgements, wherein the ITAT has upheld the estimation of net profit of 5% of purchases net of all deductions. Therefore, requested to direct the A.O. to estimate the net profit of 5% on total purchases. On the other hand, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee for the reason that the A.O. has estimated the net profit by relying upon the decision of A.P. High Court in the case of CIT Vs. R. Narayana Rao in ITA No.3 of 2003 which is rendered under different facts. The A.P. High Court has considered the case of an arrack dealer, whereas, the assessee is into the business of dealing in IMFL. Therefore, we are of the view that the A.O. was not justified in relying upon the judgement, which was rendered under different facts to estimate the net profit. On the other hand, the Ld. A.R. for the assessee, relied upon the decision of ITAT, Visakhapatnam bench in the case of T. Appalaswamy Vs. ACIT in ITA No.65 66/Vizag/2012. We have gone through the case laws relied upon by the assessee in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing the ratios of coordinate bench, we are of the view that the net profit estimated by the A.O. by relying upon the decision of Hon ble A.P. High Court (supra), which was rendered under different facts is quite high. On the other hand, the assessee relied upon the decision of coordinate bench and the coordinate bench under similar circumstances estimated the net profit of 5% on total purchases net of all deductions. No contrary decision is placed on record by the revenue to take any other view of the matter than the view so taken by the coordinate bench. Therefore, we direct the A.O. to estimate the net profit of 5% on total purchases net of all deductions. Ordered accordingly. 10. The facts and issues involved in ITA Nos.97,98,102, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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