TMI Blog2013 (8) TMI 989X X X X Extracts X X X X X X X X Extracts X X X X ..... id estimates were without any basis or comparable case. It is also an admitted fact that in such type of cases, past history or comparable case is to be considered to estimate the income, but preference is to be given to the past history of the assessee’s own case. In the instant case, it is noticed that the NP rate shown by the assessee for the year under consideration was at 3.26% in comparison to 3.08% in the immediately preceding year. Therefore, keeping in view the past history of the assessee’ own case, it can be said that the NP rate shown by the assessee was progressive, so, no addition was called for even after rejecting the books of accounts. Addition made by treating the FDR interest as income from other sources - Held that:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO by treating the FDR interest as income from other sources. 3. That the petitioner may kindly be permitted to raise any additional or alternative ground at or before the time of hearing. 4. The petitioner prays for justice relief. 2 The grounds No.3 4 are general in nature, so do not require any comment on our part. While ground No.1 relates to NP rate sustained at 7% subject to the depreciation and interest to the third parties. 3. Facts related to this issue in brief are that assessee filed return of income on 30/09/2009 declaring total income of ₹ 79,36,130/-, which was processed under Section 143(1) of the IT Act 1961 (hereinafter referred to as Act , for short) on 05/08/2010. Later on, the case was selected for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Sindhuja Foods Pvt. Ltd. (16 DTR 278). The ld. CIT (A) after considering the submissions of the assessee observed that specific details called for by the AO to support the financial results shown by the assessee were not furnished and the assessee conceded non-production of supportive details. He, therefore, held that the books of accounts were rightly rejected by the AO. Ld. CIT(A) was of the view that the best guide for estimation of the trading results after rejecting the books is either the past history of the assessee or any other comparable case and the past history of the assessee takes preference over a comparable case. He further stated that the assessee had shown NP rate of 3.92% in the current year as against 3.50% in the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e through the material available on record. In the present case, it is an admitted fact that certain discrepancies were pointed out by the AO in the books of accounts maintained by the assessee in his regular course of business. Therefore, the provisions of Section 145(3) of the Act were applicable and the books were liable to be rejected. When the books were rejected, the only way left to determine the income is estimation by applying the GP rate or NP rate. In the present case, the AO applied NP rate of 12.5%, which was reduced to 7% by the ld. CIT(A). The said estimates were without any basis or comparable case. It is also an admitted fact that in such type of cases, past history or comparable case is to be considered to estimate the inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (237 ITR 579). 2) Padian Chemicals Vs. CIT (262 ITR 278) 3) Tuti Courin Alkalies and Fertilizer Ltd. Vs. CIT (227 ITR 172). Ld. counsel for the assessee submitted that FDRs were purchased for the purpose of business i.e for obtaining contract work from PHED authorities. Therefore, the interest income earned on such FDRs was part and parcel of the business income. The reliance was placed on the decision of this bench of the tribunal dated 07/03/2013 in ITA No. 191/JU/2012 for the assessment year 2008-09 in the case of Lal Chand Choudhary Vs. ACIT, Circle-1, Barmer and dated 09/12/2011 in ITA No.537/JU/2009 for the A.Y. 2006-07 in the case of M/s. jain Construction Co. Vs. DCIT, Barmer. A reliance was also placed in the case of CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any surplus share capital money which is lying idle has been deposited in the bank for the purpose of earning interest. The deposit of money in the present case is directly linked with the purchase of plant and machinery. Hence, any income earned on such deposit is incidental to the acquisition of assets for the setting up of the plant and machinery. 10. In the present case also, it is not the case of the department that the FDRs were purchased by the assessee from surplus money, which was lying idle and had been deposited in the bank for the purpose of earning interest. On the contrary, the FDRs were purchased from out of money, which were necessary to get bank guarantee which was assessed to get the contract and there was a direct li ..... X X X X Extracts X X X X X X X X Extracts X X X X
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