TMI Blog2005 (10) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... he issue afresh by applying the reasonable net profit rate. AO had not pointed out as to which expenses were not verifiable. The above facts had not been disputed. Since the AO did not carry out the directions of the learned CIT(A), as delineated above, the learned CIT(A) cannot be said to have erred in directing the AO to adopt the same basis as that taken for asst. yr. 1996-97. Therefore, ground No. 3 is also found to be devoid of force. It is rejected. Interest on FDRs - Again, the Department has not been able to overturn the factual findings recorded by the learned CIT(A). Since the FDRs have been found to be utilized for business purposes, interest thereon has to be considered as a business receipt of the assessee. Hence the grievance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of labour expenses ignoring the facts, detailed reasons discussed by the AO in assessment order. Therefore, the learned CIT(A) is not justified in allowing the above relief to the assessee on the facts and circumstances of the case. (3) The learned CIT(A) has erred in law and on facts in directing the AO to adopt the same basis as has been adopted for the same year as per order dt. 25th March, 1999. The learned CIT(A) vide earlier order dt. 25th March, 1999 set aside the matter. Now the learned CIT(A) has no such power. Therefore, the learned CIT(A) is not justified in setting aside the issue, on the facts and circumstances of the case. (4) The learned CIT(A) has erred in law and on facts in partly allowing the relief against addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... check. It was not pinpointed that which item of expenditure was not verifiable. Accordingly, the (deletion of) disallowance in question was correctly ordered. We hold so. Ground No. 2 is rejected. 5. Ground No. 3 relates to additions made by the AO under the head of truck hire charges, machinery hire charges and roller hire charges. The AO observed that the assessee had not maintained separate accounts for these earnings. It was held that the assessee had not been able to establish as to whether the truck hire charges and the machinery hire charges were gross. It was also held that the assessee had failed to file any evidence like agreement, etc., to the effect that for earning the aforesaid hire charges, the assessee would incur any expend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led order, the learned CIT(A) has observed that the FDRs on which the interest was earned, were purchased by the assessee for the purpose of purchasing overdraft and getting bank guarantee. It was found that the bank guarantee as well as overdraft had been utilized for business expenses of the assessee. It was in this view that the interest earned on the FDRs was considered as a business receipt. Pertinently, the learned CIT(A) found one FDR for Rs. 70 lakhs purchased on 17th Jan., 1996, to be in the hands of the assessee on being not utilized for obtaining a bank guarantee and overdraft. Accordingly, interest earned on this FDR for the period 17th Jan., 1996 to 31st March, 1996 was considered not to be business income. This finding of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had set aside this issue to the file of the AO. We, while dealing with ITA No. 3009 in the preceding paras, have upheld the subsequent order of the learned CIT(A) in this regard. Regarding the issue of disallowance out of labour expenses, we have decided this matter in favour of the assessee. The deletion of addition has been upheld. So far as regards the addition on account of unverifiable expenses amounting to Rs. 8,03,873, the learned CIT(A) has held while deciding (sic-deleting) the addition. in this regard, that on verification of the impounded books of, account of the assessee, all the items of expenses were found fully vouched. This finding of the learned CIT(A) has not been challenged by the Department. It has, thus, become final. C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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