TMI Blog2005 (5) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... parable case. The past history, of the assessee takes preference over a comparable case. In this case, the past history of the assessee is available. In comparison to this year's declared GP rate, the last year's GP rate is less. Meaning thereby, the results declared in this year are better than the last year. There are no very other specific reasons, which can impel a prudent man from taking a different and separate path. In the result, the trading results are accepted and the trading addition of Rs. 65.461 is ordered to be deleted. Ground NO.2 of the appeal is accepted. In view of this finding, ground NO.3 does not survive and hence dismissed. Disallowances of depreciation on freeze - No dispute regarding the ownership of the vehicle, but the dispute hinges the user part of allowability of the vehicle under this Act. In a way, the insurance of the vehicle being dt. 29th March, 2001 supports the case of the assessee because it happens in day to day dealings that a purchaser intends to purchase a special type of vehicle from a dealer and conveys his intention in this regard, by any means of communication available in these days, and he directs the dealer to get the insuranc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fraction of rupee - There seems to be some error in the calculation of the AO. Learned AO has not provided any analysis as claimed in the assessment order and learned DR has also not provided any reasonable basis in his written submissions. So, in the interest of justice, we may at best restore this issue to the file of the learned AO with a direction to decide this issue afresh after hearing the assessee. This issue may be treated as allowed for statistical purpose. In the result, the appeal is partly allowed. - HON'BLE R.S. SYAL, A.M. AND HARI OM MARATHA, J.M. For the Appellant : U.C. Jain, Adv. For the Respondent : Joginder Singh, Adv. ORDER Hari Om Maratha, J.M.: 1. This is an appeal of the assessee for asst. yr. 2001-02, which is directed against the order of CIT(A), dt. 31st Aug., 2004. 2. Briefly stated, the facts of the case are that the assessee deals in trading of photocopy machines, DG sets, etc. and also does photocopy job-work in addition to running STD booths. The assessee is a proprietor of two concerns namely M/s Kamdhenu Enterprises, Jodhpur and M/s Kamdhenu Copiers. He filed returns of income for asst. yr. 2001-02 on 31st Oct., 2001 declaring the total inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate in this year is better than the immediately preceding year in the concern M/s Kamdhenu Enterprises. In this year, the GP rate is declared as 15.48 per cent whereas, in the last year it was 14.34 per cent. In this regard, the position of law is well-settled by now by catena of decision including that of the Hon'ble jurisdictional High Court. The best guide for estimation of the trading results after rejecting the books is either the past history of the assessee or any other comparable case. The past history, of the assessee takes preference over a comparable case. In this case, the past history of the assessee is available. In comparison to this year's declared GP rate, the last year's GP rate is less. Meaning thereby, the results declared in this year are better than the last year. There are no very other specific reasons, which can impel a prudent man from taking a different and separate path. In the result, the trading results are accepted and the trading addition of Rs. 65.461 is ordered to be deleted. Ground NO.2 of the appeal is accepted. In view of this finding, ground NO.3 does not survive and hence dismissed. 7. In ground No.4, the appellant has challenged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2001 for the purpose of the business of the assessee, the AO did not allow the same and the disallowance was confirmed by the CIT(A). learned Authorised Representative, Sh. D.C. Jain counsel has submitted that this vehicle is owned by the assessee and was purchased on 31st March, 2001 and its insurance was got issued on 29th March, 2001. According to learned Authorised Representative, the vehicle was ready for use during the relevant period and actually it was used when it was taken from Kota to the business place in Jodhpur on the same day. 10. On the other hand, learned Departmental Representative Sh. Joginder Singh has vehemently contested this and has submitted that how a vehicle purchased two days later could be got insured on 29th March, 2001. It has been further submitted that the assessee could only prove that the Kota dealer issued sale paper in his name on that day so the vehicle was not ready for use in business at Jodhpur within the year. The cases relied on by the assessee in his favour, according to learned Departmental Representative, do not support his case. 11. We have given our thoughtful consideration to this issue. There is no dispute regarding the ownership o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and trading additions have been made then the AO is debarred from making a separate addition on account of unrecorded sales. For that matter reliance has been placed on the decision of the Jodhpur Bench in the case of ITO vs. Smt. Kalu Devi in ITA No. 89/Jp/1999 dt. 10th Jan., 2005. 13. The learned Departmental Representative, on the other hand, has submitted that the AO had found purchase of papers at Rs. 1,77,250 and sales at Rs. 1,10,793 and there was no closing stock. The AO applied GP rate of 17 per cent and computed the sales at Rs. 2,13,554 and added the difference of the above two figures. He has further submitted that two versions emerged from the explanation of the assessee, one being that when the actual business of the assessee consists of sale of copier machines and the paper purchased from the market are supplied at no cost to the purchaser of these machine and some papers are used for demonstration work and repair work, but at the same time, the assessee has claimed to have sold 280 rims out of total purchased at 870 rims and the second version that emerges from p. 216 of the paper book is that he purchased 1614 rims and sold 908 rims and there was nil closing stoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lu Devi to support our above finding. On both these counts the assessee succeeds, the ground of appeal is allowed and the impugned addition is ordered to be deleted. 16. The next ground of the assessee taken vide ground NO.7 relates to an addition of Rs. 2,54,083 by disallowing claim of assessee under s. 54F of the Act. The assessee had sold his plot for a sum of Rs. 4,27,500 by registered sale deed dt. 9th Oct., 2000. This sold plot had been purchased for a sum of Rs. 85,000. Out of the sale proceed, the assessee purchased a plot on 7th Dec., 2000 for Rs. 3,25,000 and also paid a stamp duty of Rs. 20,000. The assessee started construction of a house on this plot and completed ground floor by investing a sum of Rs. 7,11,000 before 9th Oct., 2003. On a portion of the plot purchased by his wife, which was adjacent to his plot, he started construction of first floor and further invested a sum of Rs. 5,55,000 within a period from 9th Jan., 2004 to 10th Feb., 2004 and his wife also invested a sum of Rs. 5,95;000 in the construction of ground floor. The ground floor of the assessee's house is stated to have been completed before the expiry of three years from the date of the transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the sale proceed is appropriated towards the purchase of a plot and aiso towards construction of a residential house thereon, the aggregate cost should be considered for determining the quantum of deduction under s. 54/54F of the Act, provided that the acquisition of the plot and also the construction thereon are completed within the period specified in section. The Department seems to have been misled by the word completion used in section. That is why reference has been made to various loan amounts which were drawn after the expiry of three years and the completion certificate dt. 10th Feb., 2004 and the date on which Grah Pravesh took place. The intention of the legislatures is the sale proceed should be invested in the completion of the house within stipulated time when in cases like this, the assessee had spent the amount of sale proceed towards the purchase/construction of the house but he needed more funds to complete the house in a particular manner, in such eventuality the utilisation of that amount is complete. The Department has stretched the definition of word complete too far and has tried to correlate with technical completion. We are of the considered opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich is written in Hindi is a copy of settlement which was arrived at in a Court of law. There is nothing abnormal in such agreements when a dispute reaches up to a Court. Actually this is not an application but a settlement arrived at between the parties. The amount has been received through drafts for a sale agreement, the registration is optional. it is not always necessary that the sale agreement should be witnessed or it should be witnessed from outside witnesses. Such sale agreements are agreements, which aim at completion of the subject-matter thereof by sale deed later on and, any advance which is received towards the sale consideration in advance has to be accounted at the time of execution of sale. So in our opinion, there is nothing unusual in this regard. Even if Sh. Avinash Chandra was not produced before AO, it does not mean that the claim of the assessee is false. So far as the question of registration of the final sale deed is concerned, even if it does not take place the assessee is not in loss because till such time legally he would be taken as the owner of the property as per his share. In our considered opinion, the legal provisions have been construed and appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of petrol got filled and keeping in view the other doubts raised by the Department in the interest of justice, we sustain an addition of Rs. 2,000 and delete the remaining addition. This ground is partly allowed. 27. The next issue is raised vide ground Nos. 12 and 13 which relates to rejection of books of account of M/s Kamdhenu Copiers and addition of Rs. 1 lakh on account of non-genuine purchases of papers. In this business of the assessee, the AO rejected the books of account on the ground that assessee had not kept proper records for photocopies and also did not maintain daily receipt register with regard to STD and PCO booth business. The OP rate in this business a fall of 4 per cent was declared as compared to last year. This was attributed to the increase in the cost of the papers by 3.5 per cent. Learned AO made impugned addition as per his calculations given at p. 22 of his order, holding that the purchase of papers worth Rs. 1 lakh from M/s Mahaveer Sales, Ajmer, is not genuine. The AO has based his findings on his inquiries made from sales-tax Authorities at Ajmer. 28. Learned counsel submitted that in asst. yr. 2000-01, the expenditure on papers that was 40.12 per ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this, ground is dismissed and the addition is sustained. 34. The next ground pertains to a sustained addition of Rs. 12,160, which was added in respect of payment of STD bills relevant to period 16th March, 2000 to 31st March, 2000. The Postage and Telegraph Department issues the bills in respect of PCO fortnightly and the above bills were received in the month of April and thus paid in that month only. The AO however, disallowed this claim and CIT(A) also confirmed the same. 35. After considering the submissions of both the parties and perused evidence available on record, we are of the opinion that this expenditure does not relate to the assessment year under consideration. However, this expenditure is allowable in the relevant assessment year. Consequently, this ground of appeal is dismissed. 36. The next ground pertains to an addition of Rs. 73,844 made on account of service charges and retention of fraction of rupee. The AO has discussed these issues at page Nos. 25 and 26 and learned CIT(A) has discussed this issue at page No. 29. Learned Authorised Representative Sh. Jain has contended in respect of STD, PCO, the commission is fixed by Postage and Telegraph Department an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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