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TMI Blog2016 (3) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... to be allowed. 2. Assessee is a partnership firm carrying on the business as cotton merchants and commission agents. For the Assessment year 2006-07 assessee filed its return of income on 24.10.2007 declaring the total income as Nil. On such return being selected for scrutiny assessment order came to be framed under section 143(3) on 29.12.2009 after issuing notice and hearing the assessee. The Assessing Officer found that assessee had shown sundry creditors (trade creditors) totaling to Rs. 10,37, 33,867/- in the balance sheet and as such called upon assessee to file confirmation. On account of non filing of such confirmation and on assessee's failure to furnish the postal address of such creditors for verification of the balances a sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o stock register which are duly audited under section 44AB of the Income Tax Act and concluded that differential gross profit of Rs. 5,99,101/- is to be sustained as against gross profit of Rs. 32,43,994/- made by the Assessing Officer. 4. Being aggrieved by order of CIT(Appeals) on the issue of sundry creditors, revenue filed ITA No.986/Bang/2011 and also raised a ground in the said appeal with regard to gross profit issue contending that gross profit adopted at 4% of the total turnover by the Assessing Officer was correct and modification of the same by the CIT(Appeals) was erroneous. Assessee in ITA No.956/Bang/2011 contended that CIT(Appeals) erred in sustaining the gross profit addition to an extent of Rs. 5,99,101/-. The appellate Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered by the Assessing Officer while estimating the gross profit at 4% and tribunal ought to have appreciated the details of cotton, kapas etc., mentioned in the trading account furnished along with the return is devoid of quantity stock tally and are not comparable of verification which would in itself is a discrepancy justifying the addition. On these grounds he contends that the substantial questions of law is to be framed, adjudicated and answered. 7. Per contra, Sri.V.Chandrashekar, learned counsel appearing for respondent would support the order of the tribunal and contends that findings recorded by the tribunal are all questions of fact and there is no substantial questions of law involved in these appeals and he prays for rejecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized under Annexure- A there was no dispute since the Assessing Officer himself had accepted that these creditors were genuine. Insofar as Annexure-B sundry creditors are concerned it came to be held that Assessing Officer had not issued summons under section 131 of the Act to compel their attendance and there was no break up in the remand report as to which of the creditors were served but not replied or on whom it was not served. In the factual background discussed in detail by the tribunal at paragraph 11 the said issue came to be remanded to the Assessing Officer for fresh consideration. Likewise this Annexure-C sundry creditors are concerned tribunal held that assessee had filed reconciliation of some of the accounts before the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the books of accounts. Thus, when the books of accounts are maintained by the assessee in accordance with the system of accounting, in the regular course of his business, same would form the basis for computation of income. In the instant case it is noticed that neither the Assessing Officer nor CIT(Appeals) have rejected the books of accounts maintained by the assessee in the course of the business. As such tribunal has rightly rejected or set aside the partial addition made by Assessing Officer for arriving at gross profit and sustained by the CIT(Appeals) and rightly held that entire addition made by the Assessing Officer was liable to be deleted. The said finding is based on sound appreciation of facts and it does not give rise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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