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TMI Blog2016 (12) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... n contract receipts of the assessee subject to interest & depreciation but subject to income declared by the assessee 3. That the lower authorities grossly erred in law and on the facts in treating the gross interest received on FDR & NSC of Rs. 29,29,387/- as income from other sources instead of business receipts. 4. That on the facts and circumstances of the case the ld. CIT(A) grossly erred in disallowing a sum of Rs. 1,37,870/- on account of sales and administrative expenses incurred at the petrol pumps of the assessee. AY. 673/JP/2013 - Revenue -A.Y. 2009-10 ''On the facts and in the circumstances of the case, the ld. CIT(A) has erred in:- (i) directing to allow depreciation and interest out of net profit rate adopted at 9.75% on the gross contract receipts when the same have been claimed as per the profit and loss account and already allowed in the computation of income, as per the assessment order. (ii) deleting the trading addition of Rs. 1,40,660/- in the petrol pump account made by the AO by applying the gross profit rate of 1.67% by following comparable case of Shri Om Prakash Sharma (iii) restricting the disallowance out of sales and administrative expenses to 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he matter traveled upto this Tribunal in ITA No. 524 & 525/JP/2010 pertaining to assessment year 2005-06 and 2007-08. The Coordinate Bench was pleased to uphold the net profit rate of 9.75% subject to depreciation and interest. He submitted that facts are identical in this case and the issue is squarely covered by the decision of Jaipur Bench. 3.6 On the contrary, the ld. DR has opposed the submission of the ld. Counsel for the assessee and supported the orders of the authorities below. 3.7 We have heard the rival contentions and gone through the orders of the authorities below. We find that the Coordinate Bench in para has decided the similar issue as under:- ''9. Considering the fact that Tribunal for both the preceding and succeeding assessment years has upheld the net profit rate of 9.75% subject to depreciation and interest and the Revenue has not filed appeals against order of ld. CIT(A) for assessment year 2004-05 and 06-07, we feel that ld. CIT(A) was justified in directing to apply a net profit rate of 9.75% subject to depreciation and interest..'' The ld. CIT(A) has not given any finding as to how the facts in the present case are different. Therefore, we modify the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that event, no relief would be granted. Thus Ground No. 3 of the assessee is allowed for statistical purposes. 5.1 The Ground No. 4 of the assessee is against confirming the disallowance of Rs. 1,37,870/- on account of sales and administrative expenses incurred at the petrol pump of the assessee. 5.2 The ld. Counsel for the assessee reiterated the submissions as made in the brief note. The ld. Counsel for the assessee stated that only expenses are verifiable from the books of account maintained by the assessee. He further submitted that the expenses are to the tune of 0.73% and 0.59% of the total turnover of the assessee. 5.3 The ld. DR relied on the orders of the AO. 5.4 We have heard the rival contentions and gone through the orders of the authorities below. It is noted from the assessment order that the assessee had debited the following sales and administrative expenses from its two Petrol Pumps. (i) Pipaliay Filling Station Rs. 10,08,674/- (ii) Suket Filing Station Rs. 3,70,026/- Total Rs. 13,78,700/- The AO did not produce the relevant bills and vouchers as to the above sales and administrative expenses. Hence, the AO disallowed 20% of total expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supported the order of the AO and submitted that the ld. CIT(A) was not justified in deleting the addition. 10.3 On the contrary, the ld. Counsel for the assessee supported the order of the ld. CIT(A). 10.4 We have heard the rival contentions and gone through the orders of the authorities below. We find that the ld. CIT(A) has deleted the addition by observing as under:- '' 4.6.2...... I have verified the details and the contention of the assessee was found to be correct. The Assessing Officer is therefore, directed to delete the addition of Rs. 2,44,645/-. This ground of appeal is therefore, allowed.'' The AO has made this addition on the ground that the assessee was required to furnish the details of expenditure incurred for building construction during the year under consideration. The AO observed that the case of the assessee has been referred to the Valuation Cell in the preceding year. The Valuation Officer for the year under consideration has determined the value at Rs. 8,44,645/- as against Rs. 6,00,000/- declared by the assessee. We find that the order of the ld. CIT(A) is cryptic and non-speaking. Therefore, the order of the ld. CIT(A) is set aside and the finding of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the interest income as income from other sources instead of business income as declared by the assessee. 3. Without prejudice to above, the ld. CIT(A) erred in law as well as on the facts of the present case in not allowing set off of interest expenses out of interest income. 4. The ld. CIT(A) erred in law as well as on the facts of the preset case in sustaining treatment of the sales tax refund amounting to Rs. 1,89,225/- as income from other sources as against business income. (Modified ground vide letter dated 21-04-2016 as under:- ''The ld. CIT(A) erred in law as well as on the facts of the present case in directing to assess the sales tax refund separately under the head of income from business as remission of liability u/s 41(1).'' 13.1 Briefly stated the facts that the case of the assessee was picked up for scrutiny assessment and assessment u/s 143(3) of the I.T. Act, 1961 (hereinafter referred to as 'Act') was framed by the AO vide order dated - 06-03-2013. While framing the assessment, the AO made trading addition by rejecting the books of account and applying the net profit rate at 9.75% and also made addition in respect of interest receipts as income form o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O to verify whether the FDRs receipts made by the assessee were out of commercial expediency. The AO observed that the assessee was required to make the FDRs with the banker for getting the performance guarantee/ bank guarantee as to the contract executed by the assessee. Thus he would treat interest as income from business receipt if the assessee fails to establish the nexus between the contract and the FDRs. In that event, no relief would be granted. Thus Ground No. 3 of the assessee is allowed for statistical purposes'' Hence, the AO is directed to comply with the same direction as made in the assessee's own case for the assessment year 2009-10 (supra). Thus Ground No. 2 and 3 of the assessee are allowed for statistical purposes. 15.1 The Ground No. 4 of the assessee is that the ld. CIT(A) has erred in directing to assess the sale tax refund separately under the head of income from business as remission of liability u/s 41(1). 15.2 During the course of hearing, the ld. Counsel for the assessee filed the following written submission on the issue in question. ''Brief Facts: During the year under consideration, the assessee has shown receipts of Rs. 189225/- on account of s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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