TMI Blog2015 (5) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 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observations - Decided in favour of revenue for statistical purposes Exemption claimed by the assessee u/s 10(37) withdrawn - enhanced compensation - Held that:- The issue is squarely covered in favour of the assessee and the CIT(A) was right in granting relief for the assessee and we have no reason to interfere with the conclusion of CIT(A) on this issue. See Chura Ram Versus Income-tax Officer, Ward 3, Panchkula [2010 (9) TMI 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ening and closing stock have not been furnished. Ld. Counsel has drawn our attention towards paper book page no. 40 to 47 and submitted that detail of stock statement along with opening statement as on 1.4.2009 and closing stock as on 31.3.2010 were submitted before the AO which were totally ignored while rejecting the books 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 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 estimation of profit at 5% of total turnover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cern 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 held as suspicious or bogus. 6. On careful consideration of above submissions, at the very outset, we note that the CIT(A) has granted relief for the assessee with following conclusion:- 7. I have considered the issue and the submissions made by the AR. It is not in dispute that the sale of truck has been recorded in the books of accounts of M/s Haryana Logistics, which is assessed to tax separately. As per the cash receipt, the possession of the truck has been handed over to the assessee on 20.08.2009 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness 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. 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 due opportunity of hearing for the assessee and without being prejudiced by earlier assessment and impugned order and our observations in this order. Accordingly, ground no. 2 of the revenue is deemed to be allowed for statistical purposes in the manner as indicated above. Ground No.3 10. Apropos ground no. 3, ld. DR submitted that CIT(A) has erred in law and in facts in deleting the addition of ₹ 11,54,243/- made by the A.O. by withdrawing the exemption claimed by the assessee u/s 10(37) of the Incometax Act, 1961 as the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector in pursuance to the Award. The above proposition is supported by the judgment of the Hon'ble Karnataka High Court in the case of Buddaiah v. CIT [1985] 155 ITR 277. In this connection, we have perused the Awards rendered by the Land Acquisition Collector, Panchkula on 1-10-1999 and 10-12-2002. In terms of the stated Awards, the possession has been taken over immediately and therefore, the title vested in the Government in terms of section 16 of the Land Acquisition Act, 1894 from the said dates. Accordingly, for the purposes of charging capital gains, 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 agricultural use of land is based on copies of Khasra Girdawri which clearly shows growing of crops in the relevant period. The objecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee 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 stands proved. It may be mentioned that the Id. Counsel for the assessee conceded that the lands mentioned in girdawri at Khasra Nos. 420 and 421 have not been put to use for agricultural purposes as certain buildings were constructed, thereon, as evidence by the Khasra Girdawri. Therefore the corresponding enhanced compensation received this year shall not be eligible for exemption under section 10(37) of the Act. 10. Insofar as condition prescribed in clause (iii) of section 10(37) is concerned, 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 ..... 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