TMI Blog2005 (5) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,29,444 GP rate 15.48% 14.34% M/s Kamdhenu Copier: Asst. yr. Asst. yr. 2001-02 2000-01 Turnover 8,47,837 8,17,945 Gross profit 3,08,326 3,30,738 GP rate 36.37% 40.43% 3. But, the AO rejected the books of account of the assessee and made trading additions. The AO also made various additions, out of which some are the subject-matter of this appeal, and those shall be discussed with the relevant facts one by one. 4. The assessee-appellant has taken as many as 21 grounds of appeal. However, ground Nos. 1, 6, 9, 11 and 14 were not pressed by learned Authorised Representative, Sh. D.C. Jain, when the case was taken up for hearing. These grounds of appeal are dismissed as not pressed. Ground Nos. 20 and 21 do not raise any effective ground of appeal and these are also dismissed. Now, will take up the other grounds one by one are as under. 5. In ground No.2, the appellant has raised the plea that learned AO has wrongly applied provisions of s. 145 of the Act and thereby made an addition of Rs. 65,461 in respect of business carried unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 and 5 and learned CIT(A) at p. 8 of their respective orders. In respect of freeze, the depreciation was disallowed as the purchase bill was in the name of Sh. Ajay Goyal but not in the business name. The AO also noted that there was no evidence for the use of this freeze at business premises. The case of the assessee is that this freeze is kept only at business premises and is used for providing cold water and cold drinks to the customers/office staff. It has been further argued that the assessee is the sole proprietor and it makes no difference if the name of the proprietor is given in the purchase bill. It is also stated that the nature of the business of the assessee is such that customers stay for longer time to watch the working of the machine, etc. learned Departmental Representative has basically relied on the assessment order, but in addition to that it has been further submitted vide written submissions that the assessee has simply claimed that the freeze was used for supplying cold water and cold drinks to the customers. 8. We have considered the rival submissions and perused the evidence on record. We have also given careful thought to the available evidence on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 insurance cover in his favour, which is invariably done by the dealer itself to facilitate the sales of the vehicles and naturally the bills of purchase are given only on the date when the money is handed over either by way of cheque or draft or even cash for that matter. We are afraid that this is not a case of putting a cart before the horse and so far as the user part of it is concerned when the vehicle is purchased and taken to the business premises, it can safely be stated to be used for the business of the assessee and nothing more nothing less. Thus, the depreciation is allowable on this vehicle. We order to allow the depreciation on this Maruti van and set aside the findings of the authorities below. This ground of appeal is accepted. 12. The next issue is raised vide ground NO.5 which relates to sustenance of an addition of Rs. 1.02,815 made on account of suppression of paper sales. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of learned Authorised Representative, that it is usual practice in his business to provide free rim to purchaser. In a bill, placed in the paper book at p. 201 where the date of sale is 7th June, 2000 and it is mentioned in the bill that the machine i.e., copier is supplied along with the standard accessories. According to learn8d Departmental Representative, the assessee did not possess any rim of paper because the rim (paper) was purchased on 20th June, 2000. According to him, the standard accessories refer to mechanical component of machine and not consumable articles with the machine. With regard to estimation of trading results and consequently no separate addition in this account is concerned, the learned Departmental Representative has also contested this plea of learned Authorised Representative. 14. We have considered the rival submissions and perused the evidence on record. 15. It is undisputed fact that the assessee sells the photocopier machine and this is the major business of the assessee. It is also not contested that the assessee sells paper in addition to photocopier also. What is disputed is the claim of the assessee that the assessee had supplied free rims ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a period of three years and thus made the impugned addition, which was confirmed by learned CIT(A) as well. 17. Learned counsel, Mr. Jain has submitted that the sale proceeds of the plot in question have been invested within a period of three years as required by law and as such no addition is called for in this regard, he has relied on the decision of this Bench in the case of Jagan Nath Singh Lodha vs. ITO in ITA No. 508/Jd/1999, dt. 15th June, 2004. In this case, the Tribunal considered the case of Bajaj Tempo Ltd. vs. CIT (1992) 104 CTR (SC) 116 : (1992) 196 ITR 188 (SC), CIT vs. Gwalior Rayon Silk Mfg. Co. Ltd. (1992) 104 CTR (SC) 243: (1992) 196 ITR 149 (SC) and M.A.C. Khaleeli vs. Dy. CIT (1993) 47 TTJ (Mad) 639 : (1994) 48 ITD 191 (Mad) and has held that the intention of the Act is that the amount should be spend in such case within stipulated time and that the intention of the assessee is also to be considered in correct perspective. On the force of the above decision, learned counsel has submitted that when the assessee had constructed the house which consisted only of ground floor before the expiry of three years from the date of the sale of the plot, the exemption un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of the house, It would be unjustified to hold that the assessee has not carried out the intention of the legislature. So, in our considered opinion the assessee is entitled to the relief as claimed for. Needless to say that we draw support from the abovesaid decision, which is relied on by learned counsel. This ground of appeal is allowed and the addition is ordered to be deleted. 21. Vide ground NO.8 the assessee has challenged the sustained addition of Rs. 1,35,000 which is stated to be an amount received in advance against the sale property. The fact relating to this issue is that the assessee had an ancestral property at Kasganj in UP, which was partitioned amongst the brothers by a settlement deed after a litigation in the civil Court in Eta. The property, which was received by assessee's father, was a joint property of three brothers including this assessee. The assessee agreed to sell his undivided share to his elder brother, Sh. Avinash Chandra for a sum of Rs. 1,85,000. The assessee received two drafts of Rs. 35,000 and Rs. 30,000 on 7th June, 2000. Later on, on 8th June, 2000, another two drafts for a total value of Rs. 70,000 were received. These drafts were depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been dismissed and having not been pressed. Vide ground No. 10, the assessee has challenged the disallowance of Rs. 9,843 out of petrol expenses. The assessee had purchased 40 litres of petrol on 16th Nov., 2000 and 55 litres of petrol on 27th Jan., 2000 in one-go and through consecutive bills from Nagar Filling Station. The AO collected 37 petrol bills filed with it and out of these only 3 of them had the vehicle numbers owned by the assessee. One bill dt. 14th Feb., 2000 bore vehicle No. 3920 which is not owned by this assessee. The other bills did not mention any vehicle number at all. 24. We have heard the rival submissions and perused the evidence available on record. Learned counsel has submitted that the assessee had purchased the petrol against the impugned bills from a reputed filling station and there is nothing wrong in case both the bills are consecutive number as it happens that when the person is in hurry he gets a slip from the pump where he regularly visits and in the evening bills are collected. It is also not unusual that if the bills are given in consecutive numbers in one-go in the evening. These bills are stated to be genuine. 25. On the other hand, the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16,257 in asst. yr. 2000-01 required consumption of Rs. 3,27,553 and in this year the receipt is at Rs. 8.47,837 and the AO has worked out consumption of paper at Rs. 2,63,804. It is further submitted that the assessee had purchased papers from Mahaveer Sales Agency, Ajmer, through M/s Marudhar Sales Agency, Jodhpur. The Marudhar Sales Agency has withheld the amount due to nonpayment to Mahaveer Sales Agency, Ajmer. 29. In the alternative, it has been argued when the AO has accepted the receipts of Rs. 8.47,837 as shown by the assessee then he ought to have allowed proper deduction on the basis of cost incurred either in preceding year or in subsequent year as without the purchase of paper, the receipt was not possible. Learned Departmental Representative has, however, submitted that these purchases are bogus and has relied on the assessment order. 30. After going through the record that when the receipts have been accepted by the AO, he must allow the corresponding use of paper on the basis of assessee's past history. Thus, we order that the corresponding relief based on the last year should be allowed to the assessee. In the result, the ground is allowed to that extent. 31. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount. The assessee had claimed payment as per bills issued by a Government agency and as such there cannot be a case of suppression of commission as alleged. It has further submitted that most of the calls are on credit basis and the bills are debited to customers account as per bills printed on machine and the payments are received by cheques and in such an event it is wrong on the part of the AO to make addition on the basis of fraction of rupee. The service charges form part of the bill and is included in the gross collection. It has vehemently contended that the allegation of retention of fraction of rupee is based on no evidence. Learned Departmental Representative has submitted that the assessee charged Rs. 2 for each call not pertaining to local Jodhpur area as service charges and charges Rs. 2 for local calls. He has further submitted that an analysis for first fortnight of the year was made where the assessee had shown cash receipt of Rs. 6,551.54 and credit receipt of Rs. 9,508.98. Total receipt thus comes to Rs. 16,070.52. However, the assessee has booked charges on STD account at Rs. 12,683.68 only. The assessee has failed to explain the underbooking for this fortnig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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