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2010 (7) TMI 490 - AT - Income TaxEstimation of profit - Application of section 145(3) - Held that: - the returning of a lower profit, which is itself a relative term, cannot by itself form a reason for the rejection of account - However, Rejection (non acceptation) of books of account on the ground of booking of a substantial portion of the expenses through self-vouchers sustained. Estimation of income of the business would arise only where the finding of the books of account not yielding correct income due to their being not correct or complete, is upheld - When the quantum or estimate itself is in dispute, making claims, sons any basis, is of no moment; the law, in fect, only requiring the assessing authority to be not arbitrary and make the estimated an objective, reasonable manner; in short, fairly - Decided in the favour of the assessee by way remand to CIT(A) for passing a speaking order in the matter, and after allowing proper opportunity of hearing to both the parties Income from other sources or capital gain - Trees rooted to the land, by definition, are a part of land (refer: Transfer of Property Act), even as clarified by the apex court per inter alia the cited decisions - Thus, though an erstwhile constituent thereof, and not mainland itself, it would nevertheless, where severed from the land and realized as such, stand to be categorized as a capital asset in specie - The gains on the sale of trees, decidedly a capital asset u/s, 2(14), would therefore stand to be assessed as 'capital gains' u/s. 45 of the Act Regarding cost of acquisition - Plants and trees arise out of the womb of the land without any organised effort or activity, which is what essentially the term 'spontaneous growth signifies - The assessee, however, in the computation of its income under the said head would be entitled to a reduction toward the decline in the value of the land on account of removal of such trees, and which would be independent and irrespective of whether the roots stood sold to the same purchaser, or stood not sold by the assessee, being unrealisable or otherwise; it being not the Revenue's case that the roots stood sold to somebody else - Decided in the favour of the assessee by way of remand - In the result, the assessee's appeal is partly allowed and partly allowed for statistical purposes
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