TaxTMI 
TaxTMI 
1996 (9) TMI 174
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....ve societies. Yarn is given to the weavers and at the time of purchase of woven clothes commission at certain percentage is deducted from the purchase price. In the accounts for the previous year relevant to the asst. yr. 1987-88, the assessee admitted a commission of Rs. 78,014 by way of adjustment from the cost of purchases. This worked out to a commission at 3% on the purchase of Rs. 26,00,483 from sundry weavers. In the course of a survey conducted in the assessee's premises under s. 133A of the IT Act. On 12th July, 1987, a statement was recorded from the managing partner of the firm. The AO noticed that the managing partner had deposed that the firm was collecting commission from sundry weavers on the purchase of the woven cloth and t....
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....epresentative filed before us a copy of the statement recorded from the managing partner on 2nd July, 1987, during the survey and pointed out that what he had stated was that the commission was 6% and not 6-1/4% and that there was also the further deposition regarding payment of 3% to brokers who brought the weavers. Shri Menon contends that the Revenue authorities were not correct in making the addition on the basis of the statement of the managing partner ignoring at the same time the statement that only the net amount was adjusted after paying brokerage at 3%. It is argued that the CIT(A) was not justified in sustaining the addition accepting part of the statement of the managing partner without believing the claim regarding the payment ....
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....t the managing partner had mentioned the commission of 6% only. But, then he has also stated about payment of brokerage of 3% to the brokers. We find force in the contention of the learned representative of the assessee that the Revenue authorities are not justified in ignoring the statement about payment of brokerage while making the addition on the basis of the statement of the managing partner. What the managing partner stated was that the assessee was deducting commission from sundry weavers at 6% and approximately 3% was paid to the brokers and only the balance of 3% would be available with the assessee. By sustaining the addition to the extent of the difference of 3%, the CIT(A) has rejected the assessee's claim of payment of brokerag....
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....of India, Cannanore, the value of the closing stock as on 30th June, 1986 was shown as under: Packing credit, Rs. Shirtings 18,000 mtrs. @Rs. 7 1,87,400 HD materials 4,700 mtrs. @Rs. 12 56,400 . 2,11,800 Other stock, . Shirtings 28,000 mtrs. @ Rs. 7, 1,96,000 HD materials 2300 mtrs. @Rs. 12 27,600 . 2,23,600 The total quantity shown before the bank was 53,000 mtrs. In view of the substantial difference in the quantity as well as the value of the stock admitted before the bank the AO did not accept the closing stock of Rs. 2,35,001 shown for income-tax purpose. Apart from the discrepancy in the quantity of clothes, the AO noticed that there were shortage of 4630 mtrs. in the quantity of HD m....