ITO, Ward-1,, Nalgonda v. M. Venkat Reddy, Prop. Mayuri Wines,, Nalgonda

ITA 2016/HYD/2011 | 2008-2009
Pronouncement Date: 30-03-2012 | Result: Dismissed

Appeal Details

RSA Number 201622514 RSA 2011
Assessee PAN ABJFS5360F
Bench Hyderabad
Appeal Number ITA 2016/HYD/2011
Duration Of Justice 3 month(s) 23 day(s)
Appellant ITO, Ward-1,, Nalgonda
Respondent M. Venkat Reddy, Prop. Mayuri Wines,, Nalgonda
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 30-03-2012
Assessment Year 2008-2009
Appeal Filed On 07-12-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH HYDERABAD BEFORE SMT. ASHA VIJAYARAGHAVAN JUDICIAL MEMBER & SHRI D. KARUNAKAR RAO ACCOUNTANT MEMBER ITA NO. ASSESSMENT YEAR APPELLANT / CROSS- OBJECTOR RESPONDENT /APPELLANT - IN-APPEAL 1997/HYD/2011 C.O.NO.28/HYD/2012 THEREIN 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA M/S. LAKSHMI SRINIVASA WINES NALGONDA (PAN ABJFS 5360 F) 1998/HYD/2011 C.O.NO.70/HYD/2012 THEREIN 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA M/S. NEW NATARAJ WINES NALGONDA (PAN AACFN 8232 F) 1999/HYD/2011 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA M/S. NUTAN WINES NALGONDA (PAN AACFN 8233 F) 2000/HYD/2011 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA PROP. SHRI VAMSIDHAR REDDY M/S. VENKATA SAI WINES NALGONDA (PAN AIIPA 9220 G) 2001/HYD/2011 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA PROP. SHRI K.VENKATARAMANA REDDY. M/S. DURGA MAHA- LAKSHMI WINES NALGONDA (PAN ADUPV 2319 N) 2002 /HYD/2011 CO.46/H/2012 THEREIN 2008 - 09 INCOME - TAX OFFICER WARD-1 PROP. SHRI VISHNU K. MATYAGIRI WINES NALGONDA ITA NO.1997 & OTHERS CO.45 & OTHERS /HYD/2011 ALL WINE GROUP OF CASES NALGONDA 2 NALGONDA (PAN ARLPK5269K) 2003/HYD/2011 C.O.NO.47/HYD/2012 THEREIN 2007-08 INCOME-TAX OFFICER WARD-1 NALGONDA SHRI P.P. RAMAKRISHNA NALGONDA (PAN AMHPP7920M) 2004/HYD/2011 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA PROF. SHRI RAMAKRISHNA M/S SAI WINES NALGONDA (PAN AIOPA8963A ) 2005/HYD/2011 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA PROP. K. REDDY M/S SUPREME WINES NALGONDA (PAN ASYPK6880E) 2006/HYD/2011 C.O.NO.72/HYD/2012 THEREIN 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA PROP. SHRI SATYANARAYANA REDDY SAMA M/S SAI WINES NALGONDA (PANBHEPS5323Q ) 2007/HYD/2011 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA PROP. P. NARASIMHA M/S VIJAYA LAKSHMI WINES NALGONDA (PAN AGMPP5132E) 2008/HYD/2011 C.O.NO.48/HYD/2012 THEREIN 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA PROP. VENKAT REDDY GANTA NALGONDA (PAN AKDPG9349M) 2009/HYD/2011 2008-09 INCOME - TAX OFFICER PROP. SHRI BALARAJU ITA NO.1997 & OTHERS CO.45 & OTHERS /HYD/2011 ALL WINE GROUP OF CASES NALGONDA 3 C.O.NO. 49 /HYD/2012 THEREIN WARD - 1 NALGONDA PALAKURTHY NALGONDA (PAN AJFPB1066K ) 2010/HYD/2011 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA PROP. ASHOK REDDY M. M/S SAI TIRUMALA WINES NALGONDA (PAN AIOPA8962 B) 2011/HYD/2011 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA PROP. A. REDDY MAYURI WINES NALGONDA (PAN ALUPM7817N ) 2012/HYD/2011 C.O.NO.50/HYD/2012 THEREIN 2008-09 INCOME - TAX OFFICER WARD-1 NALGONDA PROP. SMT. E. GUNDAGONI NAGADURGA WINES NALGONDA (PAN AAIPE7514M)) 2013/HYD/2011 2008-09 INCOME - TAX OFFICER WARD-1 NALGONDA KRISHNA REDDY DUBBAKA PROF. M/S BHARATHI WINES NALGONDA (PAN AJSPD 1629 H) 2014/HYD/2011 2008-09 INCOME - TAX OFFICER WARD-1 NALGONDA G. SRI RAMULU SAMSTHJAN NARAYANAPURAM NALGONDA (PAN AKKPG9937A ) 2015/HYD/2011 2008-09 INCOME - TAX OFFICER WARD-1 NALGONDA SHRI GOPAL REDDY ANUGULA PROP. M/S MADHU WINES NALGONDA ITA NO.1997 & OTHERS CO.45 & OTHERS /HYD/2011 ALL WINE GROUP OF CASES NALGONDA 4 (PAN AIRPA 7532 L) 2016/HYD/2011 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA SHRI VENKAT REDDY PROF. MAYURI WINES NALGONDA (PAN ANBPP 4083 G) 2017/HYD/2011 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA SRI VENKAT REDDY PROF. MAYURI WINES NALGONDA (PAN ANBPP 4083 G) 2018/HYD/2011 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA SRI VENKATESWARA WINES NALGONDA (PAN AACFV7299N ) 2019/HYD/2011 C.O.NO.71/HYD/2012 THEREIN 2007-08 INCOME-TAX OFFICER WARD-1 NALGONDA SRI NEW NATRAJ WINES NALGONDA (PAN AACFN8232F ) 2021/HYD/2011 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA SRI ANANTHA REDDY PROP. SRI SAI WINES NALGONDA (PAN AHIPA 6926 A) 2022/HYD/2011 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA SRI SRINIVAS REDDY JAKKA PROP. VIJAYA WINES NALGONDA (PAN AHNPJ 2485 Q) 2023/HYD/2011 C.O.NO.51/HYD/2012 THEREIN 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA SRI LAXMI WINES NALGONDA (PAN ABDFS1664A) ITA NO.1997 & OTHERS CO.45 & OTHERS /HYD/2011 ALL WINE GROUP OF CASES NALGONDA 5 2024/HYD/2011 C.O.NO.26/HYD/2012 THEREIN 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA SRI SIVA RAMAKRISHNA WINES NALGONDA (PAN ABGFS3113F) 2025/HYD/2011 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA SRI YANALA SEKHAR REDDY NALGONDA (PAN BHEPS5322R) 2027/HYD/2011 2007-08 INCOME-TAX OFFICER WARD-1 NALGONDA SRI SHIVA SAI WINES NALGONDA (PAN AA0FS8998R) 2028/HYD/2011 C.O.NO.11/HYD/2012 THEREIN 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA SRI SAI WINES NALGONDA (PAN AAVES4665A) 2029 2030/HYD/2011 CO.NO.27/H/2012 2007-08 & 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA SRI SHIVA SAI WINES NALGONDA (PAN AA0FS8998R) 2031/HYD/2011 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA SRI ACHALU P. PROF. M/S MAATHYAGIRI WINES NALGONDA (PAN APPPP 1338E) 2032/HYD/2011 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA SRI V.REDDY K. PROP. M/S BALAJI WINES NALGONDA (PAN AGTPK 1478 K) ITA NO.1997 & OTHERS CO.45 & OTHERS /HYD/2011 ALL WINE GROUP OF CASES NALGONDA 6 2033/HYD/2011 2008-09 INCOME-TAX OFFICER WARD-1 NALGONDA SRI SRINIVASULU P. PROF. SAGAR WINES NALGONDA (PAN AGUPP 6171H) 2041/HYD/2011 CO.45/HYD/2012 THEREIN 2008-09 INCOME-TAX OFFICER SURYAPET SRI VAMANA BHASKAR RAMMANNAPET (PANABYPV8318H) 2042/HYD/2011 2008-09 INCOME-TAX OFFICER SURYAPET SRI L. SRINIVASULU GOUD CHOUTUPPAL SURYAPET (PAN ACDPL3191L) 2043/HYD/2011 2008-09 INCOME-TAX OFFICER SURYAPET SRI VIJAYA WINES SURYAPET (PANAAFFV9547C) 2044/HYD/2011 2008-09 INCOME-TAX OFFICER SURYAPET SRI MERUGU Y. NANDAN PROF. ANJALEE WINES CHOUTUPPAL NALGONDA (PAN ABDY5288Q) APPELLANT BY : SHRI V. SRINIVAS & K. VISWANA THAN RESPONDENT BY : SHRI A.V. RAGHURAM & SHRI P. VI NOD DATE OF HEARING : 15.3.2012 DATE OF PRONOUNCEMENT : 30.3.2012 ORDER PER BENCH . ITA NO.1997 & OTHERS CO.45 & OTHERS /HYD/2011 ALL WINE GROUP OF CASES NALGONDA 7 THESE APPEALS PREFERRED BY THE REVENUE AN D THE CROSS OBJECTIONS FILED BY DIFFERENT ASSESSEES ARE DIRECT ED AGAINST THE ORDER PASSED BY THE CIT(A) V HYDERABAD DATED 26.9 .2011 AND PERTAINS TO THE ASSESSMENT YEAR 2007-08 & 2008- 09. SINCE ISSUES INVOLVED IN THESE APPEALS ARE COMMON IN NATU RE THEY ARE CLUBBED HEARD AND DISPOSED OFF TOGETHER FOR THE SA KE OF CONVENIENCE. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS CARRYING ON THE BUSINESS OF RETAIL TRADE IN LIQUOR. THE ENTIRE PURCHASES OF THE ASSESSEE ARE FROM THE ANDHRA PRADESH BEVERAGES CORPORATION LTD. THE AO OBSERVED THAT AS PER THE G OMS NO.184 DATED 7.2.2005 OF THE GOVT. OF AP THE RETAILERS M ARGIN WAS FIXED AT 27% FOR ORDINARY LIQUOR ITEMS 20% FOR MEDIUM AN D PREMIUM ITEMS AND 25% FOR BEER. SINCE THE ASSESSEE WAS UNA BLE TO PRODUCE THE EVIDENCE FOR ITS TURNOVER IN THE FORM O F SALE BILLS THE AO COMPUTED THE TURNOVER BY ADOPTING THE PROFIT MAR GIN AS 27% AND ADDED THE DIFFERENCE TO THE INCOME OF THE ASSES SEE AS SUPPRESSED TURNOVER. THE ASSESSEE HAS AGITATED AGA INST THIS ESTIMATION OF SUPPRESSED SALES AND ITS ASSESSMENT A S THE ASSESSEES INCOME. 5. ON FURTHER APPEAL BEFORE THE CIT(A) THE CIT(A) FOLLOWED THE DECISION OF THE TRIBUNAL HYDERABAD BENCH IN IT A NO.591/HYD/2011 DATED 28.7.2011 IN THE CASE OF M/S KANAKA DURGA WINES AND HELD AS FOLLOWS: RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL THE AO IS DIRECTED TO ESTIMATE THE NET PROFIT AT 3% OF THE PU RCHASES OR ITA NO.1997 & OTHERS CO.45 & OTHERS /HYD/2011 ALL WINE GROUP OF CASES NALGONDA 8 STOCK PUT FOR SALE DURING THE YEAR SUBJECT TO THE ASSESSED INCOME BEING NOT LESS THAN THE RETURNED INCOME. 6. FURTHER THE ASSESSEE RAISED THE FOLLOWING AD DITIONAL GROUND : THE AO ERRED IN LEVYING INTEREST U/S 234B WHEN THE ENTIRE PURCHASES ARE SUBJECT TO TCS AND NO ADVANCE TAX IS PAYABLE. 7. THE CIT(A) HELD AS FOLLOWS: AS PER EXPLANATION 1 TO SECTION 234B(1) ASSESSED T AX HAS BEEN DEFINED AS TAX DETERMINED UNDER A REGULAR ASSESSMENT AS REDUCED BY THE AMOUNT OF ANY TAX COL LECTED AT SOURCE IN ACCORDANCE WITH THE PROVISIONS OF CH.X VII ON ANY INCOME WHICH IS SUBJECT TO SUCH COLLECTION AND WHICH IS TAKEN INTO ACCOUNT IN COMPUTING SUCH TOTAL INCOME. THERE IS NO DOUBT THAT THE ASSESSEE ENGAGED AS IT IS WH OLLY IN THE BUSINESS OF LIQUOR TRADE IS SUBJECT TO COLLECTI ON OF TAX AT SOURCE. THE AO IS THEREFORE DIRECTED TO GIVE CRE DIT FOR SUCH TAX COLLECTED AT SOURCE ON THE BASIS OF FORM 27D BEFORE COMPUTING THE INTEREST LEVIABLE U/S 234B. 8. AGGRIEVED BY THE ORDER OF THE CIT(A) THE REVEN UE HAS RAISED THE FOLLOWING GROUNDS AND THE ASSESSEE HAS R AISED THE FOLLOWING CROSS OBJECTIONS: 9. THE REVENUE RAISED THE FOLLOWING COMMON GROUND S IN ALL THE APPEALS WHICH ARE AS UNDER : ITA NO.1997 & OTHERS CO.45 & OTHERS /HYD/2011 ALL WINE GROUP OF CASES NALGONDA 9 1. THE ORDER OF THE CIT(A) IS ERRONEOUS ON THE FACTS A ND IN THE CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE ESTIMAT ION OF SALES @27% OF THE COST OF LIQUOR PUT TO SALE AS PER GOVT. OF AP PROHIBITION & EXCISE GOMS 184 DATED 7.2.2005 AN D ASSESSMENT OF UNDERSTATEMENT OF SALES. 3. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT T HE TRIBUNAL IN ITS ORDER IN THE CASE OF M/S KANAKA DU RGA WINES HYDERABAD IN ITA NO.591/HYD/2011 DATED 28.7.2011 UPHELD THE ACTION OF THE AO REJECTING THE BOOKS OF ACCOUNTS U/S 145 AND ADOPTING 30% OVER THE COST OF PURCHASE TO ARRIVE AT THE UNDERSTATED SALES IN PRI NCIPLE. 4. THE LEARNED CIT(A) ERRED IN RELYING ON THE DECISION OF TRIBUNAL IN THE CASE OF M/S KANAKA DURGA WINES HYDERABAD IN AS MUCH AS IN THE CASE OF M/S KANAKA DURGA WINES HYDERABAD THE NET PROFIT HAS BEEN ESTIMATED @ 3% OF THE COST OF LIQUOR PUT TO SALE T AKING THE PREVIOUS HISTORY OF PROFIT WHERE AS THE ASSESSEE HA S NO PAST HISTORY AND THE LIQUOR TRADERS IN NALGONDA DIS TRICT ARE SELLING THE LIQUOR AS PER PRP OR EVEN MORE THAN MRP. 5. THE LEARNED CIT(A) ERRED IN RELYING UP ON THE DECIS ION OF TRIBUNAL B BENCH HYDERABAD IN THE CASE OF M/S KANA KA DURGA WINES HYDERABAD IN ITA NO.591/HYD/2011 DATED 28.7.2011 SINCE THE VOLUME OF BUSINESS LOCATION OF BUSINESS AND PROFITS IN THE CASE OF MANJIT SINGH BA GGA OR M/S KANAKA DURGA WINES HYDERABAD CANNOT BE COMPARED WITH THAT OF THE ASSESSEE AND ALSO THAT EA CH ASSESSMENT PROCEEDINGS ARE INDEPENDENT. 6. THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE UNDERSTATEMENT OF SALES DETERMINED IN THE ASSESSMEN T ORDER INSTEAD OF DIRECTING TO ESTIMATE THE NET PROF IT @3% OF COST OF LIQUOR PUT TO SALE. ITA NO.1997 & OTHERS CO.45 & OTHERS /HYD/2011 ALL WINE GROUP OF CASES NALGONDA 10 7. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF H EARING WITH THE PERMISSION OF THE BENCH. 10. THE CROSS OBJECTIONS RAISED BY THE DIFFEREN T ASSESSEES ARE AS UNDER: 1. THE CIT(A) FAILED TO APPRECIATE THAT INTEREST U/S 2 34B COULD NOT HAVE BEEN LEVIED ON THE CROSS OBJECTOR IN AS MUCH AS ENTIRE PURCHASES WERE SUBJECTED TO TCS AND THE CROSS OBJECTOR AS PER PROVISIONS OF SECTION 208 AND 209 OF IT ACT WAS NOT UNDER AN OBLIGATION TO PAY ADVANCE T AX. 2. THE CIT(A) FAILED TO APPRECIATE THE ADDITIONAL GROU ND RAISED BY THE CROSS OBJECTOR BEFORE HER AND GAVE A DIRECTION FOR GIVING CREDIT FOR THE TCS INSTEAD OF DIRECTING THE ASSESSING OFFICER TO DELETE THE ENTIRE INTEREST LEVIED U/S 234B OF THE ACT IN VIEW OF PROVISIONS OF SECTIO N 208 AND 209 OF IT ACT. 3. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 11. WE FIND THAT THE ISSUE IN THE DEPARTMENTAL APP EAL REGARDING INTIMATION OF PROFITS IS SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL IN ITA NO.591/HYD/2011 DATED 28.7.2011 IN THE CASE OF M/S KANAKA DURGA WINES ON IDENTICAL FACTS. IN THAT CASE THE CO-ORDINATE BENCH HAS DIREC TED AS UNDER: WE FIND THAT THE AO HAS RIGHTLY ADOPTED THE SALE P RI8CE AT 30% OVER THE COST OF PURCHASE TO ARRIVE AT THE UNDERSTATEMENT OF SALES OF RS.93 65 993/- BY THE AS SESSEE. ITA NO.1997 & OTHERS CO.45 & OTHERS /HYD/2011 ALL WINE GROUP OF CASES NALGONDA 11 BUT THE SAME TIME THE ENTIRE UNDERSTATEMENT OF SAL ES CANNOT BE TREATED AS UNDISCLOSED INCOME OF THE ASSE SSEE FOR THE YEAR UNDER CONSIDERATION. IT IS WELL SETTLED L AW THAT THE BEST GUIDE FOR ESTIMATION OF INCOME AFTER REJECTING THE BOOKS OF ACCOUNTS IS EITHER PAST HISTORY OF THE ASSESSEE OR ANY OTHER COMPARABLE CASES. THE LEARNED COUNSEL FOR TH E ASSESSEE CLEARLY DEMONSTRATED BEFORE US THAT THE ASSESSEES NET PROFIT IN THE PAST IS BETWEEN 0.12% TO 0.28% OF SALES. THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF MANJIR SINGH BAGGA VS. ITO IN ITA NO.371 & OTHER S DATED 30 TH SEPTEMBER 2010 HELD THAT THE ESTIMATION OF THE NET PROFIT AT 3% IS REASONABLE. IN VIEW OF THE MAT TER ENDS OF JUSTICE WOULD BE MET IF WE ESTIMATE THE NET PROF IT OF THE ASSESSEE AT 3% OF PURCHASES OR STOCK PUT FOR SALE D URING THE YEAR UNDER CONSIDERATION AS AGAINST THE ESTIMATION OF 5% MADE BY THE CIT(A). 12. NOTHING HAS BEEN BROUGHT ON RECORD TO SHOW WHY THE RATIO OF THE AFORESAID DECISION OF THE CO-ORDINATE BENCH CANNOT BE ADOPTED IN THESE CASES ALSO. THE FACTS ARE SIMILAR. THEREFORE R ESPECTFULLY FOLLOWING THE RATIO OF THE DECISION OF THE CO-ORDINATE BENCH WE DIRECT THE AO TO ESTIMATE THE NET PROFI T AT 3% OF THE PURCHASES OR STOCK PUT FOR SALE DURING THE YEAR SU BJECT TO THE ASSESSED INCOME BEING NOT LESS THAN THE RETURNED IN COME. HENCE WE DISMISS THE REVENUES APPEALS. 13. WITH RESPECT TO THE CROSS OBJECTIONS FILED BY THE ASSESSES THE ASSESSEE RELIED ON THE DECISION OF DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) VS. MAERSK CO. LTD. AS AGE NT OF HENNING ITA NO.1997 & OTHERS CO.45 & OTHERS /HYD/2011 ALL WINE GROUP OF CASES NALGONDA 12 SKOV (HC UTTARKAND) 54 DTR 41 AND SUBMITTED THAT THE ASSESSEE IS NOT LIABLE TO PAY INTEREST U/S 234B. 14. THE ISSUE IN THE CROSS OBJECTION IS WHETHER TH E INTEREST UNDER SECTION 234B COULD BE LEVIED FOR NON PAYMENT OF ADVANCE TAX INASMUCH AS THE ENTIRE PURCHASE WAS SUBJECT TO TAX COLLECTION AT SOURCE UNDER SECTION 206C. IT IS NOT IN DISPUTE THAT WHEN THE ASSESSEE PURCHASED ALCOHOLIC LIQUOR FOR HU MAN CONSUMPTION THE SELLER IS OBLIGED TO COLLECT TAX A T SOURCE UNDER SECTION 206C OF THE IT ACT FALLING WITHIN CHAPTER XVII. THE PURPOSE OF SECTION 206C IS THAT THE SELLER WILL COL LECT TAX FROM THE PURCHASER IN RESPECT OF SALE OF ALCOHOLIC LIQUO R FOREST TIMBER TENDU LEAVES SCRAPS ETC. AT THE SPECIFIED PERCENT AGE AS TAX ON INCOME FROM DEALING WITH THESE GOODS BY THE PURCHAS ER. THIS IS SIMILAR TO DEDUCTION OF TAX AT SOURCE BY THE PAYER. SUCH TAX COLLECTION AT SOURCE IS PAID TO THE GOVERNMENT ON B EHALF OF THE PURCHASERS OF THESE GOODS SUCH AS ASSESSEE HEREIN. THEREFORE THE ASSESSEE WHEN HE PURCHASES ALCOHOLIC LIQUOR FOR HUMAN CONSUMPTION AND PAYS FOR IT IT IS THE LIABILITY OF THE SELLER OF THE ALCOHOLIC LIQUOR TO PAY 1% OF THE PURCHASE PRICE AS TAX COLLECTED FROM ASSESSEE BUYER AND PAY TO THE GOVERNMENT. SUC H TAX COLLECTED AT SOURCE IS TO BE TREATED ON PAR WITH TA X DEDUCTIBLE AT SOURCE AND THEREFORE SHOULD BE TAKEN INTO ACCOUNT W HILE COMPUTING ADVANCE TAX PAYABLE BY PURCHASER OF GOODS SPECIFIED IN SEC 206C LIKE THE ASSESSEE. 15. SECTION 209(1)(D) READ AS UNDER: THE INCOME TAX CALCULATED UNDER CLAUSE (A) OR CLA USE (B) OR CLAUSE (C) SHALL IN EACH CASE BE REDUCED BY THE AMOUNT OF INCOME TAX WHICH WOULD BE DEDUCTIBLE (OR COLLECT IBLE) AT ITA NO.1997 & OTHERS CO.45 & OTHERS /HYD/2011 ALL WINE GROUP OF CASES NALGONDA 13 SOURCE DURING THE SAID FINANCIAL YEAR UNDER ANY PRO VISIONS OF THE ACT FROM ANY INCOME (AS COMPUTED BEFORE ALLO WING ANY DEDUCTIONS ADMISSIBLE UNDER THIS ACT) WHICH HAS BEEN TAKEN INTO ACCOUNT IN COMPUTING THE CURRENT INCOME OR AS THE CASE MAY BE THE TOTAL INCOME AFORESAID AND THE AMOUNT OF INCOME TAX AS SO REDUCED SHALL BE THE ADV ANCE TAX PAYABLE. 16. THEREFORE UNDER SECTION 209 WHILE COMPUTING ADVANCE TAX PAYABLE BY THE ASSESSEE THE AMOUNT OF TAX WHICH IS COLLECTIBLE U/S.206C SHOULD BE REDUCED FROM THE TAX COMPUTED O N THE ESTIMATED INCOME FOR THE PURPOSE OF DETERMINING THE ADVANCE TAX PAYABLE. THUS THE CIT(A) HAS RIGHTLY HELD IN COMPU TING THE ADVANCE TAX PAYABLE TAX COLLECTIBLE U/S.206C SHOUL D BE REDUCED BY OBSERVING AS UNDER:- THERE IS NO DOUBT THAT THE ASSESSEE ENGAGED AS I T IS WHOLLY IN THE BUSINESS OF LIQUOR TRADE IS SUBJECT T O COLLECTION OF TAX AT SOURCE. THE AO IS THEREFORE DIRECTED TO GIVE CREDIT FOR SUCH TAX COLLECTED AT SOURCE ON THE BASIS OF FORM NO.27D BEFORE COMPUTING THE INTEREST LEVIA BLE U/S 234B. 17. THE ASSESSEE RELIED ON THE DECISION OF DIT VS M ARESK CO LTD REPORTED IN 54 DTR 1 (UTTARKHAND). BUT IT IS DI STINGUISHABLE AS IT IS A CASE OF AN EMPLOYEE. IN THE CASE OF AN EMPLOYEE THE EMPLOYER IS REQUIRED TO WITHHOLD TAX WHICH WILL BE EQUIVALENT TO THE TOTAL TAX PAYABLE BY THE EMPLOYEE UNDER THE INC OME TAX ACT. IN THOSE CIRCUMSTANCES TAX DEDUCTIBLE WILL BE EQUI VALENT TO THE TAX PAYABLE BY THE RECIPIENT AND HENCE IF TAX DEDUC TIBLE IS GIVEN CREDIT TO IT WILL RESULT IN NO FURTHER TAX PAYABLE. HENCE UNDER THOSE CIRCUMSTANCES IT WAS HELD THAT INTEREST U/S. 234B IS NOT ITA NO.1997 & OTHERS CO.45 & OTHERS /HYD/2011 ALL WINE GROUP OF CASES NALGONDA 14 LEVIABLE. SIMILAR IS THE CASE OF NON RESIDENTS. H OWEVER IN THE PRESENT CASE THE RATE OF TAX COLLECTIBLE MAY OR MAY NOT BE EQUIVALENT TO TAX WHICH IS ULTIMATELY PAYABLE BY TH E PURCHASER. THE PURCHASER HAS TO PAY ADVANCE TAX TO MAKE UP FOR THIS DIFFERENCE HENCE AS PER THE PROVISIONS OF SECTION 2 09 READ WITH SECTION 234B THE CIT(A) RIGHTLY DIRECTED THE AO TO GIVE CREDIT TO THE TAX COLLECTIBLE U/S.206C FROM THE TAX ON THE A SSESSED INCOME AND COMPUTE THE SHORT FALL IN PAYMENT OF ADV ANCE TAX. 20. IN THE RESULT THE CROSS OBJECTIONS FILED BY THE ASS ESSEES ARE DISMISSED. 21. IN THE RESULT ALL THE APPEALS OF THE REVENUE ARE DISMISSED AND THE CROSS OBJECTIONS RAISED BY THE ASSESSEES A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT O N: 30.3.2012 SD/- SD/- (D. KARUNAKAR RAO) ACCOUNTANT MEMBER (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER DATED THE 30 TH MARCH 2012 COPY FORWARDED TO: 1 THE ITO WARD NO.1 NEAR RAILWAY UNDER BRIDGE HYDERABAD ROAD MARRIGUDA POST NALGONDA-508 001 2 1. M/S SRI LAKSHMI SRINIVASA WINES 270 VENKATEDADRI PALEM NALGONDA DISTRICT. 2. M/S NEW NATRAJ WINES 6-3-1376 NEAR SAVARKAR STATUE RAMGIRI NALGONDA 3. M/S NUTAN WINES 4-103/E DEVARAKONDA ROAD NALGONDA. 4. SHRI A. VAMSIDHAR REDDY PROP. VENKATA SAI WINES 4-1-2025 MARRIGUDA (V) MARRIGUDA MANDAL NALGONDA DISTT. 5. SRI KUNDUR VENKAT RAMANA REDDY PROP. DURGA ITA NO.1997 & OTHERS CO.45 & OTHERS /HYD/2011 ALL WINE GROUP OF CASES NALGONDA 15 MAHALAKSHMI WINES ARJA;ABABI(V) NALGONDA DISTT. 6. SHRI VISHNU KARANTI PROP. MATHYAGIRI WINES H.NO.6- 2-744 SRINAGAR COLONY NALGONDA 7. SHRI P. RAMAKRISHNA NARKETPALLY (V) & (M) NALGONDA DISTT. 8. RAMAKRISHNA ALE PROP. M/S SAI WINES H.NO.18-82 DEVARAKONDA NALGONDA DISTT. 9. SHRI KONDAL REDDY PROP. M/S SUPREME WINES SHOP NO.20-432/5/374 DEVARAKONDA NALGONDA DISTT. 10. SHRI. SATYANARAYANA REDDY SAMA PROP. M/S SAI WINES NARLRELKAL NALGONDA DISTT. 11. SHRI P. NARASIMHLA P. PROP. VIJAYALAKSHMI WINES H.NO.19 MAIN ROAD DEVARAKONDA NALGONDA DISTT. 12. SHRI VENKAT REDDY GANTA PROP. H.NO.7-18 VELLA NKI (V) NALETPALLY (M) NALGONDA DISTT.) 13.SHRI BALARAJU PALAKURTHY PROP. M/S MAYURI WINES H.NO.4-10305 DVK ROAD NALGONDA 14.M/S SAI TIRUMALA WINES SHRI A.R. MUDIREDDY PRO P. NAKREKAL NALGONDA 15.15. SHRI ASHOK REDDY MADDI PROP. MAYURI WINES NALGONDA 16.16. SMT. E. GUNDAGONI PROP. M/S NAGADURGA WINES H.NO.4-10395 DVK ROAD NALGONDA 17. KRISHNA REDDY DUBBAKA PROP. M/S BHARATHI WINES H NO.1-38 2-31 CHITYAL NALGONDA 18.SHRI RAMULU SAMSTHJAN NARAYANPURAM NALGONDA DISTT. 19.SHRI GOPAL REDDY ANUGULA PROP. M/S MADHU WINES AMMABABOLE (V) NARKRETPALLY (M) NALGONDA 20.SHRI VEMLAT REDDY PROP. MAYURI WINES NASLGONDA 21.M/S VENKATESWARA WINES 6-2-628/4 NALGONDA 22.SHRI ANANTHA REDDY S. PROP. SRI SAI WINES NAKREKAL NALGONDA 23.SRI SRINIVAS REDDY JAKKA PROP. VIJAYA WINES NALGONDA 24.SRI LAXMI WINES NAMPALLY VILLAGE 508 373 NAMPALLY MANDAL NALGONDA. 25.M/S SRI SIVA RAMAKRISHNA WINES 2-23 NEAR GANMDHI PARK HUZUR NAGAR NALGONDA ITA NO.1997 & OTHERS CO.45 & OTHERS /HYD/2011 ALL WINE GROUP OF CASES NALGONDA 16 26. SHRI YANALA SEKHAR REDDY NELLIBANDA VILLAGE NAKREKAL NALGONDA 27.SHRI SHIVA SAI WINES 8-2-136 BUS STAND ROAD NALGONDA 28.SRI SAI WINES SY.NO.412 GUDUR VILLAGE MIRYALAGUDA MANDAL NALGONDA DISTT. 29.SHIVA SAI WINES 1-1211 KATTANGUR-508205 NALGONDA 30.SHRI ACHALU P. PROP. MAATHYAGIRI WINES PLOT N O.17 CHITYALA NALGONDA DISTT. 31.SHRI VENKAT REDDY KANDALA PROP. M/S BALAJI WINE S H NO.12-72 NAKREL NALGONDA DISTT. 32.SRI SRINIVASULU POLA PROP. M/S SAGAR WINES NALGONDA 33.SHRI SHIVA SAI WINES NALGONDA 34.SHRI VANAMA BHASKAR S/O ANJAIAH PROP. M/S RENUKA YELLAMMA WINES RAMANNAPET-508113. 35. SRI L. SRINIVASULU GOUD S/O YELLAIAH PROP. M/ S ANJALEE SREE WINES D.NO.3-401 CHOUTUPPAL 36.M/S VIJAYA WINES D.NO. 6-64/15 KUKUDA (VIII)- 508207 SURYAPET SRI MERUGU Y. S/O