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TMI Blog2016 (8) TMI 1273X X X X Extracts X X X X X X X X Extracts X X X X ..... ng ` Nil income. The return filed by the assessee was processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter called as 'the Act'). Later, after following the due procedure, assessment was completed u/s 143(3) of the Act. In the assessment order, the A.O. has observed that the assessee has not maintained any stock register and not produced sale bills, no quantitative details of sale effected and therefore, he has estimated the net profit, clear of all expenses at 20% of the stock put to sale. On appeal, the Ld. CIT(A) granted a partial relief to the assessee by scaling down the percentage from 20% to 10% and directed the A.O. to re-compute the income at 10% of purchase price. 3. On being aggrieved, assessee carried matter in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d books of accounts maintained by the assessee are not susceptible for verification, therefore rejected the books of accounts and estimated net profit of 20% by relying upon the decision of Hon'ble A.P. High Court. It is the contention of the assessee that the net profit estimated by the A.O. is quite high when compared to the nature of business carried on by the assessee. It is further submitted that the case law relied upon by the assessee is not applicable to the facts of the present case. The case before the Hon'ble A.P. High Court was that the assessee is into the business of trading in arrack, whereas it is in the business of dealing in IMFL. The assessee further contended that IMFL trade was controlled by the State Government through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... normal rate of profit in this line of business. Whereas, the Ld. D.R. supported the order of the CIT(A). Having considered the submissions of the assessee, we are of the view that the issue is no more res integra in view of a series of decisions of the ITAT Hyderabad bench in similar cases. The coordinate bench in case of ITA No.127/Hyd/12 and others dated 18.05.2012 as well as a number of other cases have held that profit in case of business in Indian made foreign liquor has to be estimated at 5% of the purchases made by the assessee. Therefore, following the decision of the ITAT Hyderabad bench, we set aside the order of the CIT(A) and direct the assessing officer to estimate the profit from the wine business of the assessee by applying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received from prospective customers and well wishers. Before the A.O., he has not brought anybody to substantiate his case. Accordingly, A.O. has treated the initial investment made by the assessee as unexplained income, accordingly, addition was made. 8. On appeal before the CIT(A), it was submitted that the assessee had entered into a memorandum of association along with 5 members for raising necessary funds and filed a copy of memorandum of association. The Ld. CIT(A) simply rejected the memorandum of association filed by the assessee on the ground that no additional ground is raised. Before us, it is submitted that the Ld. CIT(A) without considering the memorandum of association entered by the assessee along with others rejected the e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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