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2011 (5) TMI 821 - HC - Income TaxWhether Tribunal was justified in reversing the order passed by the Commissioner of Income-tax (Appeals) in upholding the assessment order when the Assessing Officer himself rejected the books of account of the assessee after holding that the transaction shown in the names of the sundry creditors were not genuine yet the Assessing Officer instead of proceeding to determine the assessment under section 144 proceeded to add the sundry creditors amount in the income of the assessee under section 68 of the Income-tax Act – Held that:- Assessing Officer has committed an error of law by adding that amount under section 68 of the Act of 1961 straight-away merely because of the reason that the genuineness of the transaction shown in the heading of the sundry creditors was not found genuine. In view of the above reasons, following section 145(3) the Assessing Officer should have proceeded under section 144 and should have followed the procedure of assessment of the tax, Tribunal and the Assessing Officer though recorded finding of fact correctly that the transaction of sundry creditors were not genuine but so far as the assessment order is concerned that deserved to be set aside and the Assessing Officer should assess the income afresh under section 145(3), matter is remanded back to the Assessing Officer
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