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TMI Blog2014 (11) TMI 1171X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Act, 1961 ( for short, "the Act"), assessed the income of the assessee at Rs. 55,62,830/- applying net profit of 5%. By virtue of the impugned order, the learned CIT(A) directed this net profit rate to be reduced to 0.5%. Aggrieved, the Department is in appeal before us. 3. The learned DR has contended that the learned CIT(A) has erred in directing the A.O. to assess the income of the assessee at Rs. 5,56,300/- by applying net profit rate of 0.5% on the gross sales of Rs. 11,12,56,585/- in view of the net profit rate assessed u/s 143(3) of the Act at 0.506% on gross sales of Rs. 29,75,78,035/- in the case of 'M/s Bathinda Wine Traders, Bathinda' for the assessment year 2009-10; that ignoring the fact that in the present case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licence; that the business of retail trade of liquor can only be carried out by making purchases from the wholesalers on the basis of permits issued by the department; that the wholesalers are also issued licences by the Excise and Taxation Department; that further, even the quantity of purchase has to be in accordance with that approved in the permit; that not only this, even the name of the seller is in the permit and no purchase can be made from anyone else; that complete copies of accounts of the seller parties along with their complete names and addresses were also produced before the A.O.; that the A.O. did not carry out any inquiry despite thereof; that it was after taking into consideration all these facts, that the learned CIT(A) c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t correct and complete, observing that past history of the case was not available. The learned CIT(A) relied on the Tribunal's decision for A.Y. 2009-10 in the case of 'M/s Bathinda Wine Traders', where the net profit rate applied was 0.506%. 8. It is well settled that even if the results of the books of account are rejected and an estimate is to be made, such estimate of income has to be fair and reasonable and based on material available on record and there is no scope for guess-work while making such estimate. As such, the estimate cannot be either arbitrary, or capricious. The A.O., it is seen, while arriving at the net profit rate of 5%, has not given any basis for such rate. The learned CIT(A), on the other hand, has placed reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Department makes specific provisions as to the quantity of liquor to be purchased, the party from whom it is to be purchased and the rates. These aspects, therefore, are under the strict control and supervision of the Excise and Taxation Department. It has, again, remained undisputed that no purchases can be made from the open market. The Excise and Taxation Department has not be shown to have been raised any objection in this regard in the case of the assessee. Once this is so, it does not lie in the mouth of the Revenue to contend that profit at a higher rate cannot be ruled out. This is, particularly so, when no material to the contrary has been placed on record, at any stage. We do not find any error whatsoever in the order of learne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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