TMI Blog2016 (4) TMI 1086X X X X Extracts X X X X X X X X Extracts X X X X ..... s partners and in the case of assessee interest of ₹ 1,69,358/- and salary of ₹ 50,000/- has been shown to working partners and, therefore, assessee has rightly filed its return of income at NIL. We, therefore, are of the view that assessee is covered under the provisions of section 44AF of the Act and no addition was called for disallowance of purchases at ₹ 3,42,757/- and sustaining of disallowance on expenses @ 10% of ₹ 2,42,086/-, the same are deleted. - Decided in favour of assessee - ITA No.77/Ahd/2012 - - - Dated:- 18-3-2016 - Shri Rajpal Yadav, JM, Shri Manish Borad, AM. For The Appellant : Shri Jignesh N. Mehta, AR For The Respondent : Smt. Sonia Kumar, Sr. DR ORDER PER Manish Borad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as culled out from the assessment records are that the assessee is a partnership firm engaged in the business of trading of begs, suitcase and trunks of VIP Ltd. and other manufacturers. Return of income was filed on 31.3.2009 showing total income of Rs.NIL. The case was selected for scrutiny assessment and notices u/s 143(2) of the Act was issued on 27.8.2009 followed by notice u/s 142(1) of the Act, date 18.1.2010 along with detailed questionnaire calling for various details. During the course of assessment proceedings financial statements including trading and profit and loss a/c and supporting of purchase and sale were submitted by the assessee. In the computation of income assessee has opted for presumptive taxation u/s 44AF of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e firm is a small hawker type of business carried on in low price area of the society on total turnover of ₹ 11.31 lacs from retail trade business profit worked out under the provisions of sec.44AF of the Act calculated @ 5% comes to ₹ 56551/- whereas assessee firm has disclosed net profit of ₹ 2,22,214/- before deduction of interest and remuneration payable to partner(s). Ld. AR further submitted that during the course of assessment proceedings all documents relating to purchases and sales were provided to the assessing authority including the copy of sales-tax return filed for the year to support total turnover of ₹ 11,31 lacs. Complete details of purchases along with date-wise purchase register showing party-wise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bout purchases and sales effected during the year and genuineness of sales has not been questioned by the assessing authority at any stage. Ld. Assessing Officer has doubted the purchases of ₹ 13,71,028/- on which addition @ 25% has been made even when complete details of datewise purchases and names, addresses and amount of suppliers were placed on record before ld. Assessing Officer by the assessee vide his reply dated 8th July, 2010. Ld. AR also submitted that out of total purchases of ₹ 13.71 lacs, purchases of ₹ 12.69 lacs was made from Aristocate Luggage Ltd. 9. Looking to the business activities of the assessee firm we are inclined to believe that assessee is in retail trade business and special provisions for ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulated as if the assessee had claimed and had been actually allowed the deduction in respect of the depreciation for each of the relevant assessment years. (4) The provisions of sections 44AA and 44AB shall not apply in so far as they relate to the business referred to in sub-section (1) and in computing the monetary limits under those sections, the total turnover or, as the case may be, the income from the said business shall be excluded. . 11. Applying the same to the facts of the case of assessee wherein total turnover is shown at ₹ 11,31,029/- which is not doubted by the lower authorities at any stage and the purchases of the assessee are explained and the profits of ₹ 2,22,214/- shown by the assessee is much higher th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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