MANDAVA NAGESWARA RAO,,VISAKHAPATNAM vs. THE ITO,, VISAKHAPATNAM

The assessee has raised seven grounds of appeal in total in this case and the Ld.AR did not press Ground No.1 and 3 to 7. Hence, Ground No.1 and 3 to 7 are dismissed as not pressed.

The only ground remained for adjudication is Ground No.2 relating to the purchases of Sri Sai Durga Bar & Restaurant. During the assessment proceedings, the Assessing Officer(AO) observed that as per the information received from Andhra Pradesh Beverages Corporation Ltd.(APBCL), the assessee made purchases of liquor worth Rs.5,64,55,381/-, whereas the assessee had admitted turnover of Rs.4,46,22,154/- resulting in difference of Rs.1,18,33,227/-. The AO called for explanation from the assessee and the assessee admitted that he was also running proprietary concern in the name and style of Sri Sai Durga Restaurant & Bar for the period from 1.7.2010 to 31.03.2011 and made a turnover of Rs.97,42,047/- which was inadvertently omitted to include in the return of income. The assessee has requested the AO to include the turnover of Rs.97,42,047/- and to make addition of Rs.2,97,828/- being the net profit relating to M/s Sai Durga Bar and Restaurant. However, the AO did not accept the explanation of the assessee and made the addition of Rs.1,18,33,227/- being the difference in the turnover admitted in the P&L

Aggrieved by the order of the AO, the assessee went on appeal before the CIT(A) and the Ld.CIT(A) observed that the turnover of Mr.M.Nageswara Rao, Prop.M/s Sri Sai Durga Restaurant &Bar for the assessment year, as per the information submitted by APBCL was 1,14,84,877/-. The assessee claimed to have functioned as a proprietary concern from 1.7.2010 to 31.03.2011 and prior to this date it was functioned as AOP and there is a possibility of inclusion of purchases made during April 2010 to June 2010 in the hands of the assessee. The assessee has filed a copy of Profit & Loss account before the Ld.CIT(A) for the period from 1.4.2009 to 31.3.2010 in the status of the AOP, but, the assessee has not furnished any information as to the purchases made during the period from April 2010 to June 2010. The Ld.CIT(A) observed that there is a specific information provided by APBCL that the purchases made by Shri Sai Durga Bar and Restaurant, M.Nageswara Rao as proprietor was Rs.1,14,84,877/-. As regards estimation of income, the Ld.CIT(A) relied on the orders of the Coordinate Bench of ITAT Hyderabad in the case of M/s Mallikarjuna Bar & Restaurant in ITA No.186/Hyd/2012 dated

Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before us. During the appeal hearing, the Ld.AR furnished the copies of Form 26AS in the case of the assessee and argued that the total purchases from APBCL was Rs.5,42,42,292/- which include the purchases made for Sri Sai Durga Bar and Restaurant. Since the turnover admitted in the Sri Durga Wines was Rs.4,46,22,154/- the turnover of Sai Durga Bar and Restaurant was Rs.97,42,047/-, hence requested to accept the turnover of Sri Sai Durga Bar & Restaurant at Rs.97,42,047 instead of Rs.1,14,84,877/- determined by the Ld.CIT(A). Per contra, the Ld.DR supported the order of the Ld.CIT(A).

We have heard both the parties and perused the material available on record. In this case, the AO stated that as per the information received from APBCL, the total liquor purchases made by the assessee was Rs.5,64,55,381/- and similarly, the Ld.CIT(A) also stated that as per the specific information provided by APBCL, the purchases made by Sri SaiDurga Bar & Restaurant, proprietor, M.Nageswara Rao was Rs.1,14,84,877/-, whereas the assessee furnished Form 26AS disclosing the

In the result, appeal of the assessee is allowed for statistical purpose.