2011 (9) TMI 1110

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....RDER PER R.K. GUPTA, J.M. This is an appeal by department and cross objection by assessee against the order of ld. CIT (A) relating to assessment year 2000-01. 2. The department is objecting in deleting the addition of Rs. 7,76,829/- made by AO under section 40A(3) and deleting the addition of Rs. 5,58,120/- made by AO under section 37(1) of the I.T. Act. 3. The assessee derives income....

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....efore ld. CIT (A) that AO was not justified in making addition. It was submitted that payment were not made to any one person/party in a day as all the payments were made either through employees of the firm or through the business associates for onward payments to labourers/cottage/village raw material producers at sites which are not served by the bank also. Sometimes payments were made on holid....

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....in writing. However, a detailed explanation was filed during the assessment proceedings. It was further submitted that N.P. rate shown by assessee at 7.25% is better than declared in earlier year. It was submitted that for assessment year 1998-99 the ld. CIT (A) had applied N.P. rate of 8%. It was further submitted that in case of M/s. Vijay Builders, the Tribunal has reduced the net profit to 5%.....

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....the IT Act. 5. Now the department is objecting in deleting the separate addition made by AO and assessee is objecting in applying the net profit of 9.5% as against 7.25% declared by the assessee. 6. After considering the submissions and perusing the material on record, we find that there is no substance in the appeal of the department whereas assessee deserves to succeed in part. The ld. CIT....