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Income Tax Officer Versus Shri Satinder Kumar

Rejection of books of accounts - estimating the net profit @5% of the turnover - CIT(A) deleted addition - Held that:- CIT(A) rightly held that the rejection of books of accounts by the AO was not sustainable and the action of the AO in estimating the net profit at 5% as per section 44AF of the Income Tax Act, 1961 (for short the Act) was misplaced and misconceived as this provision relates to retail business having turnover of less than ₹ 40 lakh per annum. The CIT(A) also noted that the .....

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e of his business and answer to this question can be gathered only when the issues of fuel, drivers and cleaners salary and other wear and tear expenses on the truck after purchase i.e. after 20.8.2009 is examined and verified at the end of the AO.The issue of registered owner prior to purchase and subsequent to purchase is also relevant to proper determination and evaluation of transaction of purchase of truck which also requires verification and examination at the end of the AO. Thus, we find .....

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See Chura Ram Versus Income-tax Officer, Ward 3, Panchkula [2010 (9)411 - ITAT, CHANDIGARH] - Decided against revenue. - ITA No. 4415/Del/2013 - Dated:- 8-5-2015 - Shri S. V. Mehrotra And Shri Chandra Mohan Garg,JJ. For the Appellant : Shri B.R.R. Kumar Sr. DR For the Respondent : Shri Gautam Jain, Adv. & Piyush Kumar, Adv. ORDER Per Chandra Mohan Garg, Judicial Member This appeal by the revenue has been directed against the order of the CIT(A), Rohtak dated 1.5.2013 in Appeal No. 547/RTK/12 .....

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On the facts and in the circumstances of the case the Ld. CIT(A) has erred in law and in facts in deleting the addition of ₹ 6,41,287/- made by the A.O. on account of Capital Gain' on the sale of truck as the assessee could not produce any sustainable documentary evidence in respect of purchase/sale of truck during assessment proceedings. 3. On the facts and in the circumstances of the case the Ld. CIT(A) has erred in law and in facts in deleting the addition of ₹ 11,54,243/- mad .....

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uce any relevant details of opening and closing stock and also any sustainable evidence in support of the entries contained in the books of accounts. Replying to the above, ld. Counsel of the assessee supported the impugned order and submitted that the AO rejected the books of accounts of the assessee without any good and reasonable cause as the assessee was maintaining regular books of accounts which were duly audited by the statutory auditors. Ld. Counsel pointed out that no defects or discrep .....

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ooks of accounts of the assessee. Ld. DR has not disputed this fact that the details filed at page 40 to 47 of the Paper book of the assessee were very well before the AO during assessment proceedings. This fact has also been noted by the CIT(A) in para 5 of the impugned order while demolishing the conclusion of the AO on rejection of books of accounts. 3. From operative part in para 5 at page 3 of the impugned order, we further observe that the CIT(A) rightly held that the rejection of books of .....

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herefore, we are unable to see any valid reason to interfere with the impugned order on this issue and we uphold the same. Finally, ground no. 1 of the revenue being devoid of merits is dismissed. Ground No.2 4. Apropos ground no.2, ld. DR submitted that the CIT(A) has erred in law and in facts in deleting the addition of ₹ 6,41,287/- made by the A.O. on account of Capital Gain' on the sale of truck as the assessee could not produce any sustainable documentary evidence in respect of pu .....

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0.8.2009 amounting to ₹ 7,05,000 and during more than 8 months of the relevant financial year, the assessee did not get it transferred and registered in his name, therefore, said transaction of purchase of truck is a sham transaction which was rightly rejected by the AO. Ld. DR vehemently contended that the CIT(A) deleted the addition without any sustainable reason and by wrongly mentioning that the AO has not disputed the price paid for the truck. Ld. DR also contended that the reasons re .....

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as the truck was purchased from the concern in which the assessee had beneficial interest, therefore, it was not considered necessary to get it transferred in the name of the assessee immediately after purchase and merely because the truck was purchased from the concern in which the assessee is interested cannot fortify the conclusion that the transaction is suspicious or doubtful. The ld. Counsel also pointed out that the AO has allowed depreciation on the truck, hence, its purchase canto be he .....

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.2009 itself. Merely because the truck was purchased from a concern in which the assessee has beneficial interest cannot lead to the conclusion that the transaction is suspicious. It is worthwhile to note that the AO has not disputed the price paid for the truck. One of the reasons given by the AO of cash receipt having not been witnessed by any person is devoid of any merit, as no such stipulation /regulation exists. It is well settled law that change of name In the RC is not compulsory/ mandat .....

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his cash receipt, there is signature of seller Mohinder and the column of the witness is blank. No other document supporting the transaction of purchase of Truck No. HR69/6516 has been submitted before us. Even we are unable to see any document to show that the said truck was originally registered in the name of Mohinder who has signed on the cash receipt as seller. On the specific query from the Bench, ld. Counsel of the assessee could not assist us why the payment was made in cash and what was .....

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profit and loss account for the year ending on 31.3.2001, the assessee made a claim of depreciation on the purchased truck which was allowed by the AO and in this situation, the AO cannot deny the transaction. 8. On careful consideration of above, we are of the view that the purchase of truck cannot be held as suspicious or bogus only because the truck has been purchased in cash from the concern wherein the assessee is beneficiary and only because the registration was not transferred in the name .....

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ck after purchase i.e. after 20.8.2009 is examined and verified at the end of the AO. 9. The issue of registered owner prior to purchase and subsequent to purchase is also relevant to proper determination and evaluation of transaction of purchase of truck which also requires verification and examination at the end of the AO. Thus, we find it just and proper to restore this issue to the file of the AO for proper examination and verification in the light of aforesaid observations after affording d .....

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f the Incometax Act, 1961 as the assessee could not produce any sustainable documentary evidence in support of his claim during assessment proceedings. 11. Ld. DR supporting the assessment order submitted that the assessee received impugned amount during the assessment year under consideration on account of further enhanced compensation on compulsory acquisition of his agricultural land in Village Jamalpur Khurd, Sonepat. Ld. DR further submitted that the said agricultural land is a capital asse .....

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ssessee supported the impugned order and submitted a copy of the judgment of ITAT, Chandigarh B Bench in the case of Chura Ram vs ITO (2011) 10 taxmann.com 34 (Chd.) and submitted that it is not in dispute that the assessee had received enhanced compensation during the year under consideration after 1.4.2005, therefore, the enhanced compensation in respect of compulsorily acquired agricultural land is exempted u/s 10(37) of the Act. 13. On careful consideration of above submissions, we note that .....

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to be appreciated that in order to charge tax on Capital Gains accruing on a property acquired under the Land Acquisition Act, 1894 the date of transfer has to be reckoned in terms of section 16 of the Land Acquisition Act, 1894. Where a property is acquired under the Land Acquisition Act, 1894 the title to the lands vests in the Government under section 16 of the said Act on taking of possession of land by the Land Acquisition Collector in pursuance to the Award. The above proposition is suppor .....

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ns, the date of transfer corresponds to the dates of the two Awards. Therefore, for the purposes of section 10(37)(ii) of the Act, the date of transfer is to be taken as the dates of the Awards. Now, in order to examine the condition prescribed in clause (ii) of section 10(37), it has to be established that during the period of two years immediately preceding such dates of transfer, the land was being used for agricultural purposes by the assessee or a parent of his. The plea of the assessee for .....

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dawri cannot be construed as fatal to the contents of Kharsa Girdawri, which reveal the growing of crops, thus proving the agricultural use of the land. On this aspect the Id. Counsel explained that the land was self-irrigated. 9. On this aspect, a reference to the judgment of the Hon'ble jurisdictional High Court in the case of CIT v. Smt. Savita Rani [2004] 270 ITR 402(Punj. & Har.) is note worthy. The Hon'ble High Court, in the context of section 54B of the Act was examining wheth .....

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ace of the khasra girdawri of the land produced by the assessee. As per the Hon 'ble High Court, khasra girdawri produced by the assessee showed that agricultural operations were being carried on by the assessee and merely because the land was located in a commercial area or land was having partial utilization for non-agricultural purposes were not the relevant considerations. Even in the case before us, khasra girdawri produced by the assessee clearly shows that during the period of two yea .....

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evant period, relied upon by the assessee it can be said that in the period of two years immediately preceding the date of transfer the lands in question were used for agricultural purposes, and accordingly assessee satisfies the conditions mentioned in section 10(37)(ii) of the Act. Merely because the land was adjoining a developed area would not take away the agricultural use of the land portrayed by the khasra girdawris. Therefore, our conclusion that use of the land for agricultural purposes .....

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ed, there is no dispute that enhanced compensation has been received by the assessee during the year in pursuance of an acquisition by the State Government under the provisions of the Land Acquisition Act, 1894. 11. Clause (iv) of section 10(37) provides that the compensation or. consideration considered exempt should be received by the assessee on or after first day of April, 2004. The impugned compensation has been clearly received by the assessee after the aforesaid date and is therefore, eli .....

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