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TMI Blog2010 (9) TMI 713X X X X Extracts X X X X X X X X Extracts X X X X ..... of capital account which is the loan and advances already given which was shown in the balance-sheet and refund from income-tax, therefore, there is no reason to make any addition - In the result, the appeals of the Department are dismissed, and the cross-objections of the assessee are allowed - I.T.A. Nos. 363/JP/2010 and I.T.A. Nos. 364 and 365/JP/2010 - - - Dated:- 28-9-2010 - R.K. Gupta, M.L. Gusia, JJ. Sanjay Kumar for the Department J.K. Ranka and Sidharth Ranka for the Assessee ORDER These are three appeals by the Department and three cross-objections by the assessee relating to two different assessees, i.e., Shri Nitesh Maheshwari and Shri Manish Maheshwari belonging to Kota. Identical facts are involved in all these appeals of the Department and the cross-objections of the assessee, therefore, they are disposed of together. One of the issues in the appeal of the Department relates to directing to allow benefit of deduction of 20 per cent, on account of application of CPWD rates instead of PWD rates adopted by the DVO for the purpose of valuation and directing to allow 12 per cent. deduction for self supervision while no such deduction was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rauto v. ITO [2002] 76 TTJ (Cuttack) 455 and many others. We further note that the learned Commissioner of Income-tax (Appeals) was justified in granting 12 per cent, deduction on account of self supervision. Nothing has been brought on record by the Department that the building was not constructed under self supervision but under supervision of outside agencies. Books of account have been prepared by the assessee and no payment has been shown to be paid or payable to any outside agencies. Merely by stating that building has been constructed in a beautiful manner and without any outside help such building cannot have constructed, cannot be the basis for drawing inference that the building was not constructed under self supervision. Even otherwise, we find that complete books of account have been maintained by the assessee and they have not been rejected either by the Assessing Officer or by the learned Commissioner of Income-tax (Appeals). Therefore, in view of the decision of the hon'ble jurisdictional Rajasthan High Court, no addition can be made in construction of the building. The hon'ble Rajasthan High Court long back in case of CIT v. Pratapsingh Amrosingh Rajendra Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t referred to in section 69 or 69B or value of any bullion, jewellery or other valuable article referred to in section 69A or section 69B is required to be made, the Assessing Officer may require the Valuation Officer to make an estimate of such value and report the same to him. We find that section 142A is not applicable on the facts of the present case because the Assessing Officer has not stated anywhere in his order that books of account prepared by the assessee and the cost of construction shown by the assessee has not been recorded in the books of account. Section 69 provides where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year. Section 69B provides that amount of investments, etc., not fully disclosed in the books of account . . . books o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ledge of the assessee. Thereafter, the assessee agreed to apply 13 per cent. gross profit rate. However, the Assessing Officer was not satisfied with the gross profit rate of 13 per cent., therefore, he applied a gross profit rate of 14 per cent. and computed the trading addition. It was submitted before the learned Commissioner of Income-tax (Appeals) that just to buy peace the assessee accepted the application of 13 per cent. rate. If he was not satisfied with the 13 per cent. rate, then he should have rejected the books of account and he should have made addition on the basis of books of account maintained by the assessee. Attention of the Bench was drawn on the order of the Assessing Officer where he has not given any finding as to why the gross profit rate of 14 per cent. is applied. It was further submitted that in the earlier year the gross profit rate shown by the assessee was 10.56 per cent. whereas he agreed to apply 13 per cent. for the year under consideration just to buy peace. After considering the submissions, the learned Commissioner of Income-tax (Appeals) found force in the argument of learned counsel for the assessee. Accordingly he directed the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee by ascertaining the factual aspects. It has been found that vehicles and telephone has been used for business purposes and, therefore, disallowance was not correct. The learned Commissioner of Income-tax (Appeals) has given a finding that ad hoc disallowance made by the Assessing Officer on account of personal use without bringing any material is not justified. The learned Commissioner of Income-tax (Appeals) further noted that the addition made on account of capital account which is the loan and advances already given which was shown in the balance-sheet and refund from income-tax, therefore, there is no reason to make any addition. The learned Commissioner of Income-tax (Appeals) has also noted that the Assessing Officer has just made an addition in a mechanical manner which is not justified. The finding of the learned Commissioner of Income-tax (Appeals) which remained uncontroverted, we see no reason to interfere in this manner. Accordingly in respect of the above deletions, we confirm the finding of the learned Commissioner of Income-tax (Appeals). In the result, the appeals of the Department are dismissed, and the cross-objections of the assessee are allowed. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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