TaxTMI 
TaxTMI 
TaxTMI 
2016 (4) TMI 75
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....e disallowance in respect of purchase of X-ray films amounting to Rs. 24,919/-. 3. That on the facts and in the circumstances of the case and in law, the ld CIT(A) grossly erred in sustaining an addition of Rs. 59,700/- U/s 68 on account of various trade creditors outstanding at the balance sheet date as under:- S.No. Name of the Trade Creditor Outstanding balance at the yearend added by A.O. & sustained by CIT(A) Rs. 1. M.K. Surgical Suppliers 22,786 2. Rajputana Biotech Pvt. Ltd. 1,248 3. Santosh Battery Service 6,200 4. Shree Laxmi Medicose 4,345 5. Surgimed 25,139 59,700 2. The assessee has income from running of hospitals. He filed return for A.Y. 2009-10 on 25/09/2009 at Rs. 16,56,920/- and agricultural income of Rs. 42,500/- had also been declared. The case was scrutinized U/s 143(3) of the Income Tax Act, 1961. The first ground of the assessee's appeal is against making addition on account of bogus purchases. The ld Assessing Officer has observed that on verification of books of account, it was found that no proper system/record for maintaining purchase and sale has been followed by the assessee. The assessee had shown to....
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....s. It is also undisputed fact that the AO has required the assessee to produce the responsible persons / owners of the concerns for examining the genuineness of the purchases and that the appellant has failed to produce such person before the AO. It may be mentioned that the purchases are shown by the assessee and therefore the onus was on the assessee to prove genuineness of the purchases. Simply filing of purchase bills etc. may not prove the genuineness of the purchases. In these circumstances the AO has rightly disallowed such claim and has made addition of Rs. 422209/-. As regards purchases from Bhargava Hi Tech Surgimed Co. Pvt. Ltd. amounting to Rs. 201894/- where the AO has disallowed 20% of claim it is noted that the Marketing Manager of the concern admitted to have made such sales. As regards some challans though which some goods were received by the assessee which were subsequently returned to the seller party, proper system as to how such returned items were accounted for and revised invoice was issued accordingly was stated before the AO. It is not a case where either the purchases were not made or the purchases were not related to the business and in this background t....
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....s better N.P. rate in the year under consideration compared to preceding year. It is not necessary that in each and every case, the addition is necessary as held by the Hon'ble Jurisdictional High Court in the case of CIT Vs. Gotan Lime Khanij Udyog (2002) 256 ITR 243. He further argued that on bogus purchases, a reasonable profit can be estimated as held by the Hon'ble ITAT, Jaipur Bench in the case of Anuj Kumar Varshney & Ors. Vs. ITO decided on 22/10/2014 wherein 15% disallowance held reasonable N.P. 5. At the outset, the ld DR has vehemently supported the order of the ld CIT(A) and argued that the ld Assessing Officer issued summons to the suppliers. The supplier parties have not responded. The assessee is also not able to produce the parties for verification, therefore, order of the ld CIT(A) may please be confirmed. 6. We have heard the rival contentions of both the parties and perused the material available on the record. It is undisputed fact that in response to notice U/s 131 of the Act, both the parties were not responded against the notice of the Assessing Officer. The assessee has debited purchases as expense, therefore, it is a burden cast on the assessee to prove t....
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....ness of the transactions and creditworthiness of the creditors. He also issued summons U/s 131 of the Act, but which cannot be served on Devi Distributors & Surgicare, Karni Enterprises, Prabhat Infotech, Shree Ji Enterprises and Shree Laxmi Medicose. Thus the Assessing Officer made addition of Rs. 3,98,355/- in the income of the assessee U/s 68 of the Act, which was challenged by the assessee before the ld CIT(A) but the ld CIT(A) found cash creditor explained in case of M/s Bhargava Hi Tech Surgimed Co. Pvt. Ltd.. In case of Devi Distributors and Surgicare amounting to Rs. 41,227/- and M/s Karni Enterprises amounting to Rs. 3,80,982/- had been confirmed by the ld CIT(A) against the bogus purchases, which found double addition by the ld CIT(A). In case of M/s Prabhat Infotech, he found the Assessing Officer's finding contradictory, therefore, he accepted the cash creditor as genuine. In case of purchase made from Shree Ji Enterprises, which was pertained to earlier year, which cannot be added during the year under consideration. As regards the remaining creditors namely M/s M.K. Surgicals Suppliers amounting to Rs. 22768/-, M/s Rajputana Biotech Pvt. Ltd. amounting to Rs. 1248/-, ....