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TMI Blog2012 (7) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... llant." At the outset the ld. Counsel for assessee fairly conceded that he under the instruction of assessee is not pressing this issue. Hence this is dismissed as not pressed. 3. The second, third and fourth grounds raised in this appeal of assessee is common in regard to addition made by AO on the ground of cessation of liability of sundry creditors at Rs.2,78,261/- in the first issue, in the second issue addition of Rs.95,610/- on account of M/s.ARC Infotech (P) Ltd and in the third issue the liability of Shri Narendra Kumar Duggar of Rs.54,918/-. For this, assessee has raised following ground nos.2, 3 and 4: "2. That the learned CIT(A) erred in law in confirming addition of representing Sundry Creditors totaling Rs.2,78,261/- on the ground cessation of liability arose during the accounting year. 3. That the learned CIT(A) erred in law in confirming addition of Rs.95,610/- received by cheque during the year from M/s. ARC Infotech (P) Ltd. 4. That the learned CIT(A) erred in law in holding that the liability of Rs.54,918/- representing commission payable to Shri Narendra Kumar Duggar since financial year 1997-98 ceased during the year." 4. We have heard the rival contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs in its books of accounts, the amounts cannot be treated as cessation of liability u/s. 41(1) of the Act. Hence, we allow this issue of assessee's appeal. 5. Similar are the circumstances in the case of cessation of liability of M/s.ARC Infotech Private Limited amounting to Rs.95,610/-. As the assessee could not substantiate the sundry creditor ARC Infotech Private Limited which was outstanding as on 31.03.2002 the AO made the addition but assessee has never made any write off of this liability in its books of account. Similar are the facts in the present issue as in the above issue of sundry creditors, hence taking a consistent view we delete this addition. 6. As regards to the liability of Rs.54,918/- on account of commission payable to Shri Narendra Kumar Duggar, it is also a fact that this liability is outstanding and it pertains to financial year 1997-98 relevant to A.Yr.1998-99 and this liability does not pertain to the relevant assessment year 2002-03. The facts are exactly identical to the facts of the first issue of sundry creditors. Hence taking a consistent view, we delete this addition. 7. The next issue in this appeal is against the confirmation of disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no where doubted that any amount as given by assessee simply giving net profit to the assessee. Hence we are of the view that the lower authorities erred in estimating the profit rate on the receipt which has never given any profit to assessee. Hence we delete the addition and reverse the orders of the revenue authorities on this issue. 11. The next issue in this appeal of assessee is against the order of CIT(A) confirming the action of AO in restricting the depreciation allowance at Rs.63,565/- as against the claim of Rs.69,527/-. 12. We have heard the rival contentions and gone through facts and circumstances of the case. We find that assessee has purchased a new car on 22.03.2002 and it was used for six months, the admissible depreciation was only 50% of the WDV as on 31.03.2002. According to AO the assessee's calculations are not correct but he has not given any basis for the same. The CIT(A) simply narrated the auditors report. According to assessee, it had claimed deprecation of Rs.67,656/- whether it is within the permissible limits of 50% of the WDV on car as the car was purchased as on 21.03.2002. The same should have been allowed as per rules. Hence for verification of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see during the previous year. The income from such transfer or transfers shall be deemed to be. short-term capital gains." 15. The ld. Counsel for assessee also drew our attention to examples given in CBDT Circular No.469 dated 23rd September, 1986 for computation of sale consideration for the purposes of section 50C of the Act, which are as under :- "Presuming that during the financial year 1987-88, the assessee sold item I for a consideration of Rs.2,00,000 and bought a new item (item 4) falling in the same block of assets during the said financial year for a consideration of Rs.2,50,000, the depreciation to be allowed in respect of the assessment year 1988-89 will be as follows : Rs. (i) Aggregate WDV of the block at the beginning of the Previous year. 5,52,500 (ii) The actual cost of the new acquired during the previous year 2,50,000 8,02,500 (iii)Less : Sale proceeds in respect of the assets sold 2,00,000 WDV of the block for the assessment year 1988-89 6,02,000 Depreciation for the assessment year 1988-89 at 33-1/3% of Rs.6,02,000/- 2,00,667 WDV for the assessment year 1989-90 4,01,333" Similar are the facts here that assessee has purchased a new car as narrated by AO ..... X X X X Extracts X X X X X X X X Extracts X X X X
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