K. S. Jhaveri, J. - (1.) By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has dismissed the appeal of the department and allowed the appeal of the assessee modifying the order of the CIT(A).
(2.) This court while admitting the appeal on 16.09.2009 has framed the following substantial question of law: "(i) Whether in the facts and circumstances of the case, the Hon'ble ITAT was right in law in deleting the additions substantially without any reason inspite of being last fact finding body and have maintained the application of Section 145(3) of the Income Tax Act making the order perverse, violative of principles of natural justice and self contradictory?"
(3.) Counsel for the appellant Mr. Jain has taken us to the order of the Tribunal whereby the Tribunal while concluding the issue has observed in para 8 as under: "8. We have heard the rival contentions and perused the facts of the case. The assessee is maintaining the books of account which have been produced except the stock register. In the absence of stock register, the Ld. CIT(A) has rightly confirmed the action of the AO with regard to applicability of Section 145(3) of the Act since in the absence of stock register, the books of account cannot be said to be complete and correct income cannot be deduced therefrom. As regard estimation of income, the AO mainly has compared ratio of the expenditure as compared to the preceding years and no specific defect has been pointed out except the assessee is not maintaining the stock register. As regards the estimation of income, the assessee has declared a gross profit rate of 23.13% equal to gross profit rate declared in the immediately preceding year. Following the decision of Jurisdictional High Court in the case of CIT vs. Gottan Lime Khanij Vdyog, 2002 256 ITR 243, even if the books of account are rejected as in the present case, no addition is called for in the circumstances and facts of the case. Therefore, the addition sustained by the ld. CIT(A) is directed to be deleted. Thus ground No.1 of the Revenue is dismissed and Ground No.1 of the assessee is allowed. Ground No.2 of the assessee: The Ld. CIT(A) has erred in confirming the action of AO in treating the interest income of Rs.1,35,436/- as Income from other sources as against income from business declared by the assessee.";