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TMI Blog2011 (1) TMI 1365X X X X Extracts X X X X X X X X Extracts X X X X ..... disposed of as under: ITA No.1838/ahd/2009 with CO No.136/Ahd/2009 2. Ground No.1 in the Department s appeal challenges the deletion of addition of ₹ 6,48,000/- out of disallowance of ₹ 7,20,000/- on account of purchases from Nirav Traders ( NT for short). The assessee in the CO challenged confirmation of addition of 10% of the purchase from the same party. It is stated earlier that the addition was made on the same count, but the appeal was preferred before the Tribunal and the Tribunal vide order dated 9-1- 2009 set aside the order passed by the learned CIT(A) with direction to consider all the submissions of the assessee and pass speaking order after giving opportunity of being heard to the assessee and the AO. It is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Industries, 252 ITR 476 and M.K. Traders, 163 ITR 249. It was submitted that the books of accounts have not been rejected and the GP rate of 15.31% was not considered as low. Therefore, the addition is unjustified. The learned CIT(A) accepted the contentions of the assessee and noted that the purchase rate of cement from the above party is reasonable, as compared to the rates of other parties. Further, there were no dispute regarding genuineness of the consumption of the cement and that entire payment was made through account payee cheques. The assessee has made best efforts to produce the said party, but the party was not available. The learned CIT(A) therefore noted that no evidence brought on record that payments given to the above party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f addition of ₹ 6,80,030/- is agitated. The AO disallowed the above labour payments. In response to the letters issued under Section 133(6) to various persons, Jagdish Sathwara and Ramanbhai Prajapati did not comply with the letter and the letter issued to Ramesh Prajapati came back unserved. The assessee was given opportunity to prove the genuineness of the transaction. The assessee could file only copy of the account, the AO accordingly disallowed the above payment. It was submitted before the learned CIT(A) that copy of the account along with confirmation of the parties and complete details of the payment and tax deducted from payments made to them have been field. Copy of the bank account showing the details of the payments throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s appeal and the CO with the assessee are dismissed. ITA No.1839/Ahd/2009 8. In this Department s appeal, the Revenue challenged the deletion of penalty under Section 271(1)(c) of the Act on the additions discussed above. The learned CIT(A) following his appellate order in quantum cancelled the penalty. On consideration of the above facts, we do not find any merit in the department s appeal. On the issue of purchase made from NT , we have confirmed the order of the CIT(A) in deleting the substantial addition. On other issues, the CIT(A) deleted the entire addition and we have confirmed the view of the learned CIT(A). Therefore, merely because 10% addition is sustained on account of unexplained purchase, we do not find it to be a fit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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