TMI Blog2022 (7) TMI 549X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Tribunal we hereby direct the AO to estimate the net profit @ 5% of the purchase price of the stock which was put to sale which is net of deductions. Accordingly, ground no.3 raised by the assessee is partly allowed. Payment of license fee - AO has disallowed 1/3rd of the license fee based on the facts that no receipt was provided by the assessee - HELD THAT:- The assessee also did not file any objections for the remand report by the AO. We note here that for running an IMFL shop any person needs to pay license fee to the Government on annual basis - AO has not disputed the fact that the assessee is in the business of running a wine shop and whereby the License fee is required to be paid in accordance with the guidelines of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt no.166885 held with HDFC bank account No.68600 held with ICICI bank were attached by the Income Tax Department on 29/02/2019 for recovery of the demand as these bank accounts were not operated at the relevant time due to closure of business activity. 3. The appellant came to know only during the month of March, 2020 that his bank accounts were attached. At this point of time, the government of India announced the lock down of the country due to outbreak of COVID pandemic. Due to the lockdown and the COVID, the appellant could not move out of his place. The number of COVID cases started reducing from the last week of November, 2020. As soon as the situation improving, the appellant approached the Assessing Officer and requested him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not extend to accommodating and condoning all inordinate delays. 4. However, in the present case, the Ld. CIT(A) has passed the order on 09/08/2016 and was not received by the assessee and the assessee was unaware of CIT(A) s order and its subsequent actions of the Department till the bank accounts of the assessee are attached. Later on the assessee realized and made efforts to obtain the order copy of the Ld. CIT(A) and after receiving the true copy from the Department, the assessee has filed the present appeal which resulted in delay of 1528 days. This fact was not disputed by the Ld. DR. Moreover, the Pandemic situation also added to the delay in filing the appeal. Considering the peculiar facts and circumstances of the case, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the notice U/s. 142(1) of the Act along with a questionnaire, the Ld. AO observed that the assessee made total purchases at Rs. 1,64,43,051/- during the year and paid an amount of Rs. 53,35,450/- towards license fee for the AY 2011-12 but no evidence has been furnished. Further, the Ld. AO also noted that assessee has offered an amount of Rs. 3,80,132/- as his net profit from liquor business during the period relevant to the AY 2011-12 which is very low on a huge turnover of Rs. 2,21,42,500/-. In the absence of any evidence in respect of Licence Fee and offering of very low percentage of net profit, the Ld. AO proposed to adopt 20% on the total purchases as the assessee s net profit for the AY 2011-12 and added back to the income retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owards alleged unexplained license fee paid. (b) The Ld. CIT(A) ought to have given sufficient opportunity to explain the investment. (c) Without prejudice to the above, the Ld. CIT(A) ought to have granted benefit of telescoping. 5. Any other grounds may be urged at the time of hearing. 7. The Ld. AR argued that the Ld. CIT(A) has estimated the income @ 10% as against the net profit of 5%. The Ld. AR relied on the following case laws: 1. Judgment of the Hon ble Supreme Court in the case of Senior Bhosale Estate (HUF), dated 7/11/2019, Civil Appeal Nos. 6671-6676 of 2010. 2. Decision of the ITAT in the case of Majji Naga in ITA No.494/Viz/2016, dated 31/7/2018. 3. Judgment of the Hon ble High Court of Andhr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les made and hence the Ld. AO rejected the books of account and estimated the income @ 20% of the stock put to sale. The reliance placed by the Ld. AR in the decision of the Coordinate Bench of the Tribunal in the case of Majji Naga (supra) and Tangadu Jogisetty in ITA No. 96/Viz/2016 (supra) deserves consideration. Respectfully following the decisions of the Coordinate Bench of the Tribunal we hereby direct the AO to estimate the net profit @ 5% of the purchase price of the stock which was put to sale which is net of deductions. Accordingly, ground no.3 raised by the assessee is partly allowed. 10. With respect to Ground No.4 on payment of license fee of 53,35,450/- the Ld. AO has disallowed 1/3rd of the license fee amounting to Rs. 17, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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