TaxTMI 
TaxTMI 
TaxTMI 
2015 (12) TMI 1504
X X X X Extracts X X X X
X X X X Extracts X X X X
....was in receipt of information from the Senior Post Master (HSG)- I, Mukhya Dak Ghar, Rishikesh that from the account of the assessee company maintained in the post office, payment of Rs. 11,61,30,008/- was made to Mr. R.K. Gupta, Managing Director (MD) of the assessee company and from the sister concern during the previous year. A monthly break-up of the aforesaid payment has been given by the CIT (A) in page nos.1 & 2 of the impugned order. Since there was a difference of Rs. 36,72,074/- between the two figures of receipts (i.e. that furnished by the assessee and that furnished by the Post Master), the AO asked the assessee company to explain the difference. Pursuant to the said query of the AO, the assessee replied that Dr. R.K. Gupta, the MD never received money directly from any of the customers and the medicine is dispatched as VPP and the remittance is collected by the postal authorities from the customers and deposited in the assessee's post office account and that of the sister concern; and separate receipts as issued by the Post Office (PO) daily were available with the assessee in which the name of the concern has been mentioned separately; and in order to corroborate....
X X X X Extracts X X X X
X X X X Extracts X X X X
....thus recorded had been extracted by the ld. CIT (A) in page 3 of the impugned order which reads as under :- "The information supplied by the post office to the AO must have been based on the record available at that time. As regards the discrepancy of Rs. 36,72,074/, no clarification can be given without reference to the records since a long time has passed. The old records cannot be made available now because they have been weeded out as per the departmental rules. Since the information was made available on the basis of cash book and money orders payment book, it could not be based on wrong facts. But no documentary evidence can be made available to substantiate it because the same has been weeded out." 2.3 In his report to the ld. CIT (A), the AO took note of the fact that since the financial year concerned was 2002-03 (AY 2003-04), according to him, the information might have been computerized and so the statement of the Post Master that the documents could have been weeded out was not acceptable to the AO, so he confronted the Post Master on this aspect and asked him to furnish clarification on this aspect i.e. whether the information in respect to the assessee sought for w....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... he could do so in this case. It is also noticed that the post office mentioned that the payments had been made to Mr. R.K. Gupta on behalf of said two concern In the case of B.S.Gupta Charitable society, the AO accepted the assessee's figure. In this case, the assessee's figure needs to be accepted because it is duly substantiated with reference to the daily certificates of payment from the post office. On the other hand, the information sent by the post office to the AO is not only unsubstantiated but also amorphous. In view of this, it is held that the addition made by the AO is not justified and the same it deleted. If definite evidence substantiating the information supplied to the AO is received from the post office, it should be held that the amount was received and appropriated by Mr. Gupta and should be taxed in his hands only as his income. If that situation arises, the AO may initiate proceeding u/s 147 of the I.T. Act in his case in accordance with the provision of section 150 r.w.s.153(3) of the I.T. Act. As far as this case is concerned, there no justification for the addition. In view of the discussion above, the addition is deleted." 3. Aggrieved by the sai....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... discounted rate through the society, whereas, other patients who can afford treatment are treated through the assessee company. According to the ld. AR, first the patients suffering from Epilepsy need to be thoroughly checked by the Doctors and thereafter, medicines are prescribed for 3 - 5 years which the patients have to consume without a break. Since the patients are from all around India, the medicines are sent by post through VPP and the amount collected is remitted through the post office by money orders. It was pointed out by the ld. AR that the daily receipts of money order are issued by the PO separately for the assessee and society. The assessee explained to the AO the modus operandi, as stated above, and explained that the money orders received by the assessee and the sister concern are separately accounted in its books and the same are daily certified by the Post Master. However, the AO was not satisfied with the explanation and without rejecting the audited books of accounts maintained by the assessee on the basis of the said certificate issued by the post office, the AO has made the addition of Rs. 36,72,074/-. According to him, the AO erred in making the addition of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessee company caters for patients who can afford payment for the medicines without any subsidy. Since patients are residing all around the country the medicines are sent by VPP to them and they pay the cost by money order which gets credited in the post office account and on the very same day, a certificate of the amount credited daily is certified and issued by the Post Master to the assessee company likewise to the sister concern also. We take note of the fact that the AO got the information regarding the amount credited on monthly basis whereas the assessee received the same information on daily basis and accordingly, the ld. CIT (A) asked the AO to seek clarification from the post office in this regard and accordingly, the AO recorded the statement of Shri Lalit Mohan Joshi, the Post Master on 25.02.2009 u/s 131 of the Act. We further take note the said Post Master submission that, "The information supplied by the post office to the AO must have been based on the record available at that time. As regards the discrepancy of Rs. 36,72,074/-, no clarification can be given without reference to the records since a long time has passed. The old records cannot be made available now ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the post office without being corroborated or verified cannot be accepted. We further find that from a perusal of the statement of facts filed by the AO along with the appeal, vide letter dated 17.02.2005, the post office has brought to the notice of the AO that the documents for a period from 1999 to March 2002 has been weeded out. It was clearly mentioned that documents pertaining to period from April 2003 to July 2004 comprising of 1353 pages has been taken away by the Investigation Officer, C.O. Dalanwala, Dehradun on 04.09.2004. So, from the said letter, we can safely infer that records pertaining to the relevant assessment year i.e. 2003-04 (financial year 2002-03) was available with the concerned post office. We find that the AO has not taken any pains to call for the records before he passed the assessment order dated 31.03.2006 which he could have easily done. Further, we find that pursuant to the ld. CIT (A)'s seeking remand report, the AO simply stated vide letter dated 24.11.2008 that records of FY 2002-03 are not available. When insisted by the ld. CIT (A) vide letter dated 27.02.2009 a copy of statement on oath of Shri Lalit Mohan Joshi, the Post Master was recor....