AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (10) TMI 2004
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....s, the AO observed that the unsecured loans of Rs. 6,16,09,875/- were outstanding as on 31.03.2007 in the names of directors showing increase of Rs. 56,25,000/- over the preceding year. The amount of Rs. 5,56,09,875/- was outstanding in the name of Dr. Dharminder Kumar Nagar and an amount of Rs. 60,00,000/- was outstanding in the name of Shri Rajender Singh. From the statement of bank account filed in the case of Dr. Dharminder Kumar Nagar, the AO noticed that there were several loan entries in his bank account before extending loan to the assessee company and the funds were actually routed through various group companies and the relatives of the directors. Based on these observations, the AO, vide order sheet entry dated 30.12.2009, asked the assessee to show cause as to why the increase in unsecured loans should not be treated as bogus and addition made on that ground. Since the assessee was not able to furnish any reply, the AO has made addition of Rs. 56,25,000/- as bogus unsecured loans. In the balance sheet, the assessee had shown outstanding patients advances of Rs. 17,22,979/ - as liability, which was included under the head sundry creditors. The AO asked for the details of....
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....s were also furnished. From the bank statement of one Director Mr. Dharmendra Kumar Nagar, the Assessing Officer noticed that there were several loan entries in his bank account, before extending loan to the assessee-company and the funds were actually routed through, various group companies and the relatives of the director. Based on these observations, the Assessing Officer vide order sheet entry dated 30th December 2009 asked the assessee to show cause as to why, the increase in unsecured loan amount should not be treated as bogus. He made an addition of Rs. 56,25,000/ - on that ground. Before the CIT(Appeals), the assessee explained the details of unsecured loans and its increase as under: Name Balance as on 31st March, 2006 Balance as on 31st March, 2007 Dr.Dharmendra Kumar Nagar Rs.5,59,84,875.30 Rs.5,56,09,875.30 Mr.Rajendra Singh Nil Rs.60,00,000.00 Rs.5,59,84,875.30 Rs.6,16,09,875.30 Increase = Rs. 56,25,000.00 The assessee explained that both the directors are income-tax assesses since last so many years. Mr. Dharmendra Kumar Nagar has PAN No. ADGPN5145E and Mr. Rajendra Singh has PAN No. AAVPN4992R. Both....
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....Ram & Sons (registered firm) of which it was a partner. After crediting the said fund in the account of Mr. Rajendra Singh, the cheque, as deposited on 16th May 2006 with the appellant-company, has been got cleared from the account of Mr. Rajendra Singh on 18th May 2006. The statement of account of Ved Ram & Sons (HUF) in the books of partnership firm M/s Ved Ram & Sons are enclosed herewith. Ved Ram & Sons (HUF) is assessed to tax by PA No. AADHV7767C and Ved Ram & Sons (Regd firm) is assessed to tax vide PA No. AABFV9507G and is assessed to tax by Additional Commissioner, Ghaziabad. 02nd June, 2006: The amount of Rs. 5,00,OOO/- was transferred from the HUF of M/s Ved Ram & Sons out of withdrawal from the firm M/s Ved Ram & Sons (registered firm) under debit to the HUF account on 1st June 2006. This cheque was credited to the account of Mr. Rajendra Singh in Citibank on 3rd June 2006 wherever the cheque issued by Mr. Rajendra Singh to the appellant-company was got cleared on 5th June 2006. 31st March, 2007: The amount of Rs. 60,00,000/- was deposited by Mr. Rajendra Singh with the appellant-company vide cheque No. 011477. This cheque was cleared from the amount of Mr. Rajend....
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.... the identity, source, capacity and genuineness of the transactions as required for Section 68 of the Act has been prima facie established. The learned DR could not controvert the finding of CIT (Appeals). He simply relied upon the order of the Assessing Officer. 5.3. Under the above circumstances, we uphold these factual findings of the Ld.CIT(A) and dismiss this ground of Revenue. 6. Ground no.2 reads as under. 2. That the CIT(A) erred in law and on facts of the case in deleting the addition of Rs. 17,22,979/- made by the AO on account of unexplained advances received from patients. 6.1. The facts relating to ground no.2 of the Revenue are as under. 6.2. The assessee runs a hospital and has IPD and OPD Divisions. In IPD, as and when a patient is admitted in the hospital for treatment, the attendants of the patient are asked to deposit some amount to cover up the intended cost of treatment. The amount deposited by the patient from time to time is credited in the patient's advance account. At the time of discharge of patient, the final bill is prepared and the advance so received from the patient from time to time is adjusted and is offered for taxation in the year i....
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....me offered in subsequent year. Otherwise it will amount to double assessment. It is not the case of the Assessing Officer that the patients' advance has not been offered for taxation at all in subsequent year. The learned DR could not controvert the finding of CIT (Appeals). He simply relied upon the order of Assessing Officer. 6.3. In view of the above discussion, we uphold the factual findings of the Ld.CIT(A), and dismiss ground no.2 of the Revenue. 7. Ground no.3 reads as under. 3. That the CIT(A) erred in law and on facts of the case in deleting the addition of Rs. 1,88,14,222/- made by the AO as the assessee failed to establish the genuineness of creditors. 7.1. The facts pertaining to the above ground are as under. 7.2. The details of Sundry Creditors amounting to Rs. 1,88,14,222/-outstanding as on 31st March 2007 as filed before the Assessing Officer and CIT (Appeals) are as under: (i) Sundry creditors for equipment - Rs. 29,01,028/- (ii) Sundry creditors for projects - Rs. 74,15,739/- (iii) Sundry creditors for expenses - Rs. 84,97,455/- Rs. 1,88,14,222/- TOTAL = Rs.1,88,14,222/- ....
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....mation from the parties, as required, were also filed before the Assessing Officer. The copies of the accounts of the parties for the year under consideration and subsequent years along with the copies of the bank statements of both the years and the confirmations as filed before the Assessing Officer in remand proceedings have also been filed before the CIT (Appeals). The Assessing Officer, in spite of such exercises of verification, has not made any adverse comment on any of the account but contrary to that has simply tried to reiterate the stand of the then Assessing Officer made in assessment order. The CIT (Appeals), after considering the evidence, held that as far as the sundry creditors for equipment amounting to Rs. 29,01,028/- and sundry creditors for projects outstanding at Rs. 74,15,739/-, the assessee had not claimed any revenue expenditure against the purchases so made for equipments and capital expenditure for projects. Therefore, in respect of sundry creditors outstanding and corresponding to purchase of assets, neither any addition can be made u/s 37 or 41(1) of the Act and at the best the issue could be looked into from the angle of misappropriation of funds ....