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2016 (3) TMI 1226 - ITAT CHANDIGARHDisallowance on account the depreciation claimed on building - Held that:- During the course of assessment proceedings for the year 2007-08, the assessee admitted in his letter dated 27.11.2009 that the building in question is a residential house and one floor of which was sold during the year and the proceeds from the sale were invested in construction of other floors of the building. The Assessing Officer disallowed a sum of ₹ 1,09,873/- on account of depreciation claimed on the building in question. There is no evidence on record to show that there was a change in the user of building. It is also clear that the assessee has accepted the order passed by the Income Tax Authorities for the assessment year 2007-08. Considering the entire facts and circumstances of the present case, we do not find any merit in this ground of appeal and accordingly, the same is dismissed. Profit on sale of immovable properties - treated as income from business and profession - estimating the profit on sale of flats @ 30% of the sales value - Held that:- A profit rate of 21% will meet the ends of justice in this case. It is relevant to observe here that the assessee failed to give his past tax history. The assessee has also not shown any profit on sale of immovable properties. It is evident from the record that the assessee is executing contract work and is also engaged in the construction of building and selling the same regularly. We may also observe there that the gross profit rate cannot be uniform in all the years and the profit rate depends on many factors. Therefore, the gross profit rate of 21% for the year under consideration should not be guiding factor in other years. Accordingly, we direct the Assessing Officer to apply a profit rate of 21% as against 30% applied by the revenue authorities. The Assessing Officer should give a relief to the assessee accordingly. Addition under section 69C - Held that:- The entire expenditure has been routed through the books of account of the assessee and the copy of the building account and copies of the cash book on various dates, on which the expenditure was booked were placed on record as a proof of the source of expenditure in question. The Assessing Officer has accepted the books of account. It is true that the expenditure in question also appears in the Balance Sheet, relevant to assessment year under consideration. In our opinion, the entire expenditure has been booked through the books of account and, therefore, there was no question arises for assessing the same under section 69C of the Act. It appears that the addition has been made just for the sake of making addition and the same is not sustainable in law. Accordingly, we delete the addition of ₹ 5,01,860/- made under section 69C of the Act by the Assessing Officer and confirmed by the learned CIT (Appeals). Addition u/s 68 - Held that:- There is no material on record to controvert the above contention of the learned counsel for the assessee. The Revenue has also not proved that the assessee had received more than the sale consideration mentioned in the sale deed and, therefore, on this score also, no addition can be made. Considering the facts and circumstances of the present case, we delete the addition made by the Assessing Officer and confirmed by the learned CIT (Appeals). Addition u/s 68 - Held that:- According to the learned counsel for the assessee, this amount was available for depositing in Account No. 09250110004692 with UCO bank, Ram Bazar, Shimla in the name of assessee’s minor child Sanchit. There is no evidence on record to controvert the above contention of the learned counsel for the assessee. The amount received on the maturity of FDR was available for making deposits. This is not a case of the Revenue that the amount received on maturity of FDR was invested somewhere else. In the absence of such evidence, there is no reason to disbelieve the version of the assessee. Accordingly, we delete the addition made by the Assessing Officer and confirmed by the learned CIT (Appeals). This ground of appeal stands allowed.
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