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2014 (12) TMI 67 - AT - Income TaxEstimation of profits @ 10% of GP – Held that:- When the assessee has not produced its books of accounts or bills and vouchers in support of claim of expenditure, the AO could not have pointed out any defect or discrepancy in the books of accounts or inadmissibility of any particular expenditure in the absence of books of accounts, bills, vouchers or even break-up of the expenditure – the contention of the assessee cannot be accepted that it has produced all the relevant material before the AO - regular assessment in case of the assessee has not been made prior to the search – the AO retains the original jurisdiction as well as jurisdiction conferred on him u/s 153A for assessing the income - unless the assessee produces its books of accounts and other evidences in support of the claim made in the return of income, the AO would be handicapped in computing the income, hence would be forced to estimate the profit - This fact has not been properly appreciated by the first appellate authority - thus, the matter is to be remitted back to the AO for fresh consideration – Decided in favour of assessee. Addition of rental income and interest income as income from other sources – Held that:- When the assessee itself is treating the lease rental income and interest income as income from ‘other sources’ in the subsequent AY i.e., AY 2009-10, then it becomes very much clear that it is not temporary exploitation of business asset - Rather it demonstrates that the assessee himself no longer treats the asset leased out as business asset but in the nature of exploitation of property by an owner – the contention of the revenue is accepted that the amount being lease rental and interest have to be treated as income from ‘other sources’ – the order of the CIT(A) is set aside and the matter is remitted back to the AO – Decided in favour of revenue. Allowability of exemption u/s 54F – Held that:- In case of capital gains arising from transfer of any long term capital asset not being a residential house, if the assessee, within the period of one year before or two years after the date on which the transfer took place had purchased a residential house or within the period of three years, has constructed a residential house, then there will be exemption of capital gains - the assessee will not be entitled to avail exemption u/s 54F(1) if he owns more than one residential house other than the new asset on the date of transfer of original asset or purchases any other residential house other than the new asset within period of one year after the date of the transfer of original asset or constructs any residential house other than the new asset within the period of three years after the date of transfer of the original asset - the assessee has invested the capital gains in construction of an additional floor as claimed by the assessee over an already existing house property. Whether the additional floor stated to have been constructed can be considered to be a distinct and separate house independent of existing house property – Held that:- More than one flat purchased by an assessee on the same building on the same floor or different floor have to be considered as one unit - it cannot be treated as a new asset as per the provisions of section 54F of the Act – thus, the order of the CIT(A) is set aside – Decided in favour of revenue. Addition made by CIT(A) deleted – Whether there is an excess of jewellery to the extent of ₹ 1,27,60,063/- as determined by the Assessing Officer - Held that:- So far as value of jewellery stated to have been declared in the wealth-tax return of Sri Krishna Kumar HUF amounting to ₹ 60,36,175/- does not appear in the assessment order wherein the AO has considered the jewellery declared in the case of the assessee and other family members - the CIT(A) before accepting the contention of the assessee should have given an opportunity to the AO to put forth his opinion on the issue – thus, the matter is remitted back to the AO for verification. Examination of fresh information under Rule 46A – Held that:- The AO has clearly mentioned that in absence of the details regarding disbursement of loan as well as sanction letter from HDFC or any statement from the bank to substantiate the disbursement of the loan he did not accept the claim of ₹ 24 lakh - Nothing has been produced before us to show that the details of disbursement of loan from HDFC were submitted before the AO to substantiate its claim of availing loan for construction of the property - the CIT (A) also has not allowed the AO to have his view on the evidences/information submitted by the assessee during appellate proceedings - thus, the matter is remitted back to the AO for fresh consideration – Decided in favour of revenue.
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