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TMI Blog2016 (5) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee on account of Bogus purchases from M/s Nath International, without appreciating the facts mentioned in the assessment order. 2. That the Ld. CIT(A) has erred in law and on facts by allowing relief of Rs. 91,044/- to the assessee on account of excess claim of expenses under the head of quilting without appreciating the facts mentioned in the assessment year. 3. That the Ld.CIT(A) has erred in law and on facts by allowing reliefof Rs. 11,54,211/- to the assessee on account of commission u/s 40(a)(1) without appreciating the facts mentioned in assessment order. 4. That the Ld. CIT(A) has erred in law and on facts by allowing relief of Rs. 29,157/- to the assessee on account of disallowance u/s 40A(3) without appreciati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nath International did not have stock for further sale to the assessee and the same was nothing but a cash credit in the shape of stock to inflate the purchases of M/s Narayan Overseas. Accordingly, not satisfied with the explanation tendered by the assessee, the AO made addition of the aforementioned amount of Rs. 42,35,250/-. Aggrieved, the assessee preferred an appeal before the ld. CIT(A), who deleted the addition made by the AO by holding that the assessee has sufficient stock of ready fabric actually available with Nath International out of which 94,130 meters of stock was sold to the assessee-firm. The ld. CIT(A) further categorically held that the finding of the AO that no such stock was available with the said firm was factually in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eters of stock was withdrawn by the partners and was introduced as their capital contribution in the assessee firm. The ld. CIT(A) further held that the findings of the AO that no such stock were available with the said firm is factually incorrect and in view of the above facts noted by the ld. CIT(A) the addition made by the AO cannot be held as sustainable and the first appellate authority rightly added the same. Hence we agree with the explanation tendered by the ld. AR and consequently concur with the conclusion arrived at by the ld. CIT(A). Accordingly, we uphold the impugned order of the ld. CIT(A) on this count. Ground No. 2 of the Revenue being devoid of merits is dismissed. Since the facts and circumstances of the case are exactl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheque of Rs. 1 lakh dated 10.2.20106 was cancelled and was rightly appearing in the credit side of the ledger. The AO wrongly deducted Rs. 32,528/- instead of Rs. 1,23,572/- as debit note against quilting expenses. The ld. CIT(A) was right in deleting the addition by holding that the assessee had fully explained the differences between the statement of account of the assessee and copy of ledger account in the books of the assessee. The ld. DR has not brought on record anything concrete to contradict the same. Accordingly, finding no merit in the ground of appeal raised by the Revenue, we dismiss the same. Ground No 2 stands dismissed. Ground No. 3 10. Facts in brief are that the AO noticed that the assessee had claimed commission expens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents of both the sides and carefully perused the relevant material placed on record before us. We find that the ld. CIT(A) has given a categorical finding that the AO had wrongly applied the provisions of section 40A(3) of the Act as each of the cash payments considered by the AO were below Rs. 20,000/-. The ld. CIT(A) has relied on the decision of the Orissa Hon'ble High Court in the case of Aloo Supply Company reported at 121 ITR 680 wherein it has been held that statutory limit of payment in cash applied to payment made to a party at a time. The ld. CIT(A) has also relied on the decision of the Hon'ble Allabahad High Court in the case of KA Nek Mohd & Sons Vs. CIT 135 ITR 501 in arriving at the conclusion. Therefore, we find that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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