TaxTMI 
TaxTMI 
2019 (8) TMI 556
X X X X Extracts X X X X
X X X X Extracts X X X X
....venue in quantum proceedings. 2. Brief facts leading to the present appeals are that a survey was conducted on the assessee on 21.09.2010 u/s 133A of the Act, which was converted into search u/s 132 of the Act, because cash amounting to Rs. 45,80,420/- was found. Thereafter proceedings were initiated for assessing the income of the assessee for six years prior to the year of search and for the year in which search was conducted and assessment framed u/s 153A/143(3) of the Act, making additions on various counts. The orders so passed were challenged before the Ld.CI T(A), who allowed partial relief to the assessee. Aggrieved by the same, the Revenue has come up in appeal before us in the impugned years, while the assessee has filed Cross Objections. 3. At the outset, it was pointed out that there were common issues involved in the appeals. Therefore, since the appeals arose from orders passed consequent to search action undertaken on the assessee and involved common issues, all of them were taken up together for hearing. 4. The Ld.Counsel for the assessee pointed out that the common issues arose first in A.Y 2008-09 and therefore stated that the appeal and cross objection relatin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s proving that all the cash receipts in the diary had been accounted for by the assessee. The AO was not satisfied with the reply of the assessee and held that since the assessee had failed to prove that the whole amount of cash receipts in annexure A-2 was deposited in bank and shown in the books, the cash receipts were to be treated as his income from undisclosed sources. Accordingly, the difference of the cash receipts and that deposited in the bank, as shown in document A-2, relating to the impugned year, amounting to Rs. 5.45 crores, was treated as the income of the assessee u/s 68 of the Act. 10. Before the Ld.CI T(A), the assessee reiterated his contentions by filing detailed submissions and also various details and workings to prove that the entire cash receipts reflected in the document A-2 had been accounted for in the books of the assessee. The Ld.CI T(A) on perusing the same was convinced and accordingly deleted the addition made by the AO. 11. Before us, the Ld. DR contended that the fact that the document A-2, seized from the Director of the assessee company, contained notings of cash receipts and that deposited in the bank by the Director from the business of the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ceipts banks. This reply is also not accepted because Sh. Akhil Bhargwa is the administrative Director of the Company and he has day to day watch on the company activities and on perusal of annexure-2, it is also clear that Sh. Akhil Bhargwa has maintained this dairy on regular basis. The assessee has intensely has not shown these cash receipts in his income so according the section 68 of the IT. Act, 1961, the difference amount of 5.45 Cr. will be taxed as a income in the hand of assessed company." 12 The Ld.Counsel for the assessee, on the other hand, contended that it had demonstrated before both the AO and the CIT(A) that the cash receipts reflected in the documents had been duly accounted for in the books of the assessee and also deposited in the bank account of the assessee and, therefore, the Ld.CI T(A) had rightly held that there was no reason to hold any amount of the cash receipts as unaccounted in the books of the assessee. The Ld.Counsel for the assessee at this juncture took us through various details and explanation filed to the lower authorities and placed in the form of Paper Book before us. Beginning with the document which formed the basis of the addition, being ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3-2008, 16-03-2008, 22.03.2008 23.03.2008 28.03.2008 29-03-2008, 30-03-2008, 31.03.2008 AY 2008-09 05-04-2008, 06-04-2008, 07-04-2008, 17-04-2008, 27-04-2008, 02-05-2008, 04-05-2008, 06-05-2008, 07-05-2008, 08-05-2008, 09-05-2008, 10-05-2008, 11-05-2008, 22-05-2008, 23-05-2008, 24-05-2008, 25-05-2008, 26-05-2008, 01-06-2008, 05-06-2008, 06-06-2008, 07-06-2008, 08-06-2008, 15-06-2008, 19-06-2008, 20-06-2008, 07-07-2008, 22-07-2008, 23-07-2008, 24-07-2008, 25-07-2008, 26-07-2008, 27-07-2008, 28-07-2008, 29-07-2008, 07-08-2008, 08-08-2008, 09-08-2008, 10-08-2008, 17-08-2008, 09-10-2008, 12-10-2008, 19-10-2008, 20-10-2008, 26-10-2008, 27-10-2008, 05-11-2008, 15-11-2008, 25-11-2008, 28-11-2008, 12-12-2008, 26-12-2008, 07-01-2009, 08-01-2009, 25-01-2009, 15-02-2009, AY 2009-10 07-04-2009, 06-05-2009, 07-05-2009 06-06-009 07.06.2009 08-06-2009, 09-06-2009, 10-06-009 11-06-2009 12.06.2009 13-06-2009, 14-06-2009, 15-06-2009 1-06-2009 17.06.2009 18-06-2009, 19-06-2009, 20-06-2009 21-06-2009 22.06.2009 23-06-2009, 12-07-2009, 13-08-2009 06-11-2009 07.11.2009 08-11-2009, 24-11-2009, 31-12-2009, 08-01-2010, 12-03-2010, 13-03-2010, 14-03-2010, 15-03-2010, 16-03-2010, 17-03-2010 18-03-2....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was sufficiently proved to the authorities below that the diary was an incomplete record of entries and no cognizance could therefore be taken of the same. 15. Thereafter the Ld.Counsel for the assessee contended that another document,A-116, was also found during search which was a sort of petty cash book/record maintained by the cashier who after meeting out day-to-day expenditure would transfer the balance cash to Dr.Akhil Bhargava for safe keeping and which would be noted in his diary,A-2. The correlation between entries in document A-116 and A 2, Ld.Counsel contended, was also demonstrated to the lower authorities, by matching the balance of cash at the end of select days reflected in the document A-116 by the cashier and that shown as received by Dr.Akhil Bhargava in his diary Annexure A-2 on the said date. 16. Ld.Counsel further contended that it was also demonstrated to the authorities below that the assessee had accounted cash receipts in its books far more than that reflected in the document A-2. Our attention was drawn to a statement filed to the authorities below, placed at Paper Book page Nos.102 to 108, comparing the day wise cash receipt as noted in the diary Annex....
X X X X Extracts X X X X
X X X X Extracts X X X X
....it is submitted that t he said annexure must be read as a whole wherein the deposits are considered to be accounted for and thus, since the total cash receipts of the assessee is more than the collection mentioned in the diary (as demonstrated in our earlier submissions dated 26.03.2013), the entire diary should be construed to be recorded accounted for in the books of account. Thus in the current circumstances, there is nothing to warrant any addition on this account." "Further, on making a total summation of the amounts in the diary it comes p a total of Rs. 25.55 crores for the various years mentioned therein. As against this, a total of Rs. 24.80 crores has been deposited in the banks as cash during the relevant period by the assessee. This goes to prove the fact that the amounts received by Dr. Akhil Bhargava has been recorded in the books of accounts since these banks form part of the balance sheet of the company. The statement reflecting the same was filed before Your Honors vide our earlier submissions dated 25/03/2013" 18. Our attention was also drawn to the detail filed before the AO reflecting the monthwise cash receipts noted in the diary and the monthwise cash....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Ld.CI T(A) at para 4.3 to 4.3.4 as under: "4.3 I have considered the submission of Ld. Counsel. At the outset, it may be mentioned that section 68 has no application to the facts of this issue as this section applies only when an amount is found credited in the books of accounts of an assessee and the assessee cannot explain the source of that credit. This section cannot be applied where a revenue receipt is omitted from the accounts as appears to be the case of the Revenue. However, that is not of importance and the basic issue is whether the amount in question is taxable in the hands of the appellant or not.- 4.3.1 I have also gone through the relevant seized material i.e. Annexures A-2 and A-116 and discussed the matter with the Assessing officer. To comprehend the issue, it would be appropriate to understand the manner in which the entries were made in Annexures A-2 and A-116. A-116 contains entries only for four months of the F.Y. 2010-11. This annexure is named as cash book and contains entries of amounts received in cash and expenses incurred in cash. As per the notings in this annexure, major portion of cash in hand at the end of the day is handed over to Dr. Akhil Bh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s recorded in Annexure A-2 and so the cash receipts are in no way understated. 4.3.4 In view of the above, it is held that the Assessing Officer was not right in treating the difference of cash collection and deposit thereof in the bank accounts as per Annexure A-2 as undisclosed income of the appellant and so the addition made on this account is deleted. Ground of appeal No. 3 is allowed." 21. We have heard the rival contentions carefully, gone through the orders of the authorities below and also the documents referred to before us. We do not find any infirmity in the order of the CIT(A). As rightly stated by the Ld.CI T(A), the AO has made the impugned addition of Rs. 5.45 crores by comparing the amounts pertaining to cash collection mentioned in Annexure A-2 with the cash shown as deposited in the bank account as per this Annexure ,treating the difference as receipts unaccounted in the Books of the assessee. The Ld.CI T(A) has held that no addition of the difference was warranted based on certain facts found by him after examining details and evidences filed by the assessee, as under: 1. that the impugned diary/document A-2, was an incomplete record of receipts and deposit ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....monthly summary of the cash receipts noted in the diary and that reflected in the books of account, all clearly show that the cash accounted for in the books was more than that reflected in the diary with the diary reflecting total cash receipts of Rs. 6.68 crores, while the books reflected cash receipts for the same period of Rs. 9.22 crores. The Revenue has neither controverted these facts, nor pointed out any anomaly in the same. This fact in itself establishes that all the cash receipts noted in the diary were duly accounted for in the books of the assessee. There is no basis, therefore, with the Revenue for holding that the cash receipts noted in the books to the extent of Rs. 5.45 crores were not recorded in the books of the assessee. The addition therefore deserves to be deleted for this reason alone. 24. But going forward from here and even considering the plea of the Revenue that the assessee has not demonstrated the deposit of entire cash receipts as noted in the diary as being deposited in the bank also, we find no strength in the same also because the facts reveal otherwise. The assessee has demonstrated the fact that against the cash receipts of Rs. 6.68 crores noted ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eafter, the assessee was asked by the Ld.CI T(A) to file the list of assets which were eligible for claim of depreciation @ 40%. The assessee accordingly file a revised claim of depreciation in all the years involved. The Ld.CIT(A) accordingly on the basis of the revised claim so filed by the assessee, disallowed depreciation relating to the impugned year restricting the depreciation to be disallowed for the impugned year to the extent of Rs. 27,71,054/-. The relevant findings of the Ld.CI T(A) at paras 5.3 to 5.3.2 of the order are as under: "5.3 1 have considered the submission of the Ld. Counsel. The appellant has decided to forego the claim of higher rate of depreciation upto F.Y. 2005-06 and so the depreciation on assets purchased upto F.Y. 2005-06 is restricted to 15%. 5.3.1 Regarding assets purchased in F.Y. 2006-07 and later, it was noticed by the undersigned that the appellant has claimed higher rate of depreciation on certain items which were not life savings equipments and depreciation @ 40% was not allowable. Therefore, the appellant was required to file list of assets, which were eligible for claim of depreciation @ 40% during the course of appellate proceedings an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dded upto Rs. 49,28,847/-. Admittedly, the assessee had foregone its claim of depreciation at higher rate on the WDV of assets. Therefore, there is no dispute vis-à-vis the same. It is only the depreciation at higher rate of assets purchased during the year which, in fact is in dispute. As rightly pointed out by the Ld.Counsel for the assessee, the Ld.CI T(A) had noted from the details of assets purchased during the year that certain assets did not qualify for higher rate of depreciation and accordingly asked the assessee to file a revised calculation of depreciation. The same was duly filed, gone through by the Ld.CIT(A) and no discrepancy or anomaly found in the same and excess depreciation as worked out by the assessee amounting to Rs. 27,71,054/- was upheld by the Ld.CI T(A). Before us, the Ld. DR has been unable to point out any anomaly or discrepancy in the findings of the CI T(A). The Ld. DR has been unable to point out from the revised calculation filed by the assessee to the CIT(A), any incorrectness in the claim of the assessee. IN the light of any discrepancy having not been pointed out by the Ld. DR on the facts relating to the revised computation filed by the as....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... commercial expediency stands explained. (ii) Regarding advance for purchase of land at Abhipur, the same was shown as advance, since the transaction was not complete. Later, when the registry was done, the asset was transferred to the fixed asset schedule. The land was purchased with intention to expand the hospital facility and to attract the rural clientele, but later on it was observed that the scope was not very high in that area and so the land was sold. (iii) The interest debited to the profit and loss account pertains to loans raised for specific purposes and no part of these loans were used for making these advances and so it cannot be said that the interest bearing funds were used for making these interest free advances. (iv) The ratio of the judgement of Hon'ble Punjab and Haryana High Court in the case of Abhishek Industries Ltd. (286 ITR 1) has been amplified, discussed and clarified by Hon'ble Supreme Court in the cases of M/s Core Health Care Ltd. (298 ITR 194) and M/s S.A. Builders Ltd. (288 ITR 1) and as the advances were given on the ground of commercial expediency, no disallowance is required to be made. 36. The Assessing Officer did not agree with....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ugned investments of Rs. 42.92 lakhs, we hold that no disallowance of interest u/s 36(1)(iii) of the Act was warranted in the present case, since the investments are presumed to have been made out of own interest free funds of the assessee. The disallowance so made of Rs. 5,15,190/- u/s 36(1)(iii) of the Act is, therefore, directed to be deleted. The ground raised by the assessee is therefore allowed. The Cross Objection filed by the assessee stands allowed. 42. We shall now take up the appeal of the Revenue and the assesses Cross Objection relating to A.Y 2009-10 ITA No.34/Chd/2014(A.Y.2009-10): 43. Ground Nos.1, 5 and 6 raised by the Revenue are general in nature and need no adjudication. 44. Ground No.2 raised by the Revenue reads as under: "2. The Ld CIT (A) has erred on the facts and in law in deleting addition of Rs. 3,72,00,000/- made u/s 68 of the Act since the assessee has failed to prove that the whole amount related with cash receipts in Annexure A-2 was deposited in banks and shown in the books of account." 45. It was common ground between the parties that the issue raised in ground No.2 as above was similar and in fact identical to ground No.2 raised in Revenu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... receipts. The addition therefore made by the AO on this account of Rs. 2.23 crores was deleted by the Ld.CIT(A). 50. Before us the Ld.Counsel for the assessee drew our attention to the detail, which was the copy of recalculation of the total receipts of Annexure A-119 as worked out with the Assessing Officer during remand proceedings placed at paper book page no.68-70 and which was filed to the CIT(A). It was pointed out therefrom that the total receipts in Annexure-119 on recalculation came to Rs. 9,84,64,142/- which as noted by the CIT(A) was less than that recorded in the Books of the assessee at Rs. 11.38 crores. The Ld.Counsel for the assessee contended that the CIT(A) had rightly deleted the addition made on account of surplus receipts noted in the document A-119 on finding the same to be factually incorrect. 51. The Ld. DR, on the other hand, relied upon the order of the AO. 52. We have heard the rival contentions. The issue before us relates to the addition made to the income of the assessee on account of higher receipts from ECHS and CGHS noted in a document Annexure A-119 as against that reflected in the books of the assessee by Rs. 2.23 crores. The Ld.CIT(A), w....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was not justified to arbitrarily uphold the disallowance of Rs. 11,77,700/- out of interest account by resort to provisions of section 36(1)(iii) ignoring the fact that the advance was made for the purpose of business. 57. It was common ground between the parties that the issue in the above ground was identical to that raised in ground No.1 of assesses C.O. No.9/Chd/2014, and related to disallowance of interest u/s 36(1)(iii) of the Act, in relation to purported non business advances made to the same parties as in A.Y 2008-09 as under: Silver Oak Foundation Rs. 76,64,165/- Adv. For Land Rs. 21,50,000/- 58. The Ld.Counsel for the assessee contended that his argument against the said disallowance upheld by the CIT(A) was the same as in A.Y 2008-09, that the assessee had sufficient own interest free funds, in the form of profit for the year amounting to Rs. 2.44 crores as against the impugned advances of Rs. 98.14 lacs, for making the advances and the presumption therefore is that the advances have been made out of own interest free funds. 59. Since admittedly the issue is identical to that in Ground No.1 of the assesses Cross Objection for A.Y 2008 09 in CO No.9/2014 dealt wi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....,569/- in respect of excess depreciation claimed since the assessee has failed to prove the claim of higher depreciation on life saving equipments.." 67. It was common ground that the issue raised in ground No.3 above was identical to that raised in ground No.3 of the Revenues appeal for A.Y 2008-09 in ITA No.33/Chd/2014 dealt with us above and related to excess depreciation allegedly claimed by the assessee on life saving equipments. It was pointed out that the before the CIT(A),the assessee had withdrawn its claim of excess depreciation on the WDV of assets as on 31-03-2006 and for the assets purchased thereafter had filed a revised claim of depreciation as per which accordingly the CIT(A) had restricted the disallowance to Rs. 2,22,608/- as against Rs. 31,69,177/- disallowed by the A.O. 68. Since admittedly the issue is identical to that in Ground No.3 of the Revenues appeal for A.Y 2008-09 in ITA No.33/2014 dealt with us above, our decision rendered therein at para 32 of our order will apply to the present ground, following which we uphold the order of the Ld.CIT(A) allowing relief on account depreciation claimed at higher rate on life saving equipments ,amounting to Rs. 35,4....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Dr. Manjari Bhargava has written her name. The entries in this diary have, however, been made by some staff member, whose statement in respect of various entries made in this diary was not recorded at the time of search or in the post search inquiry. However, a perusal of the various pages of this diary reveals that the notings pertain to reminders in the form of jobs to be done, some basics about how to do the work and some other observations, probably of audit. For the sake of ready reference, relevant notings at page No.4 of the diary are reproduced below: "Package Income - ? - Misc Income * Rs. 5,78,200 - What is this Liveries and Lines - 18-12-2009 - Rs. 4,22,78,168 - 19-12-2009 - Rs. 4,16,02,105 - 20-12-2009 -Rs. 4,32,49,160 - 21-12-2009 Rs. 4,21,14,927 (1) SIDBI Term Loan Payment (Rs. 2.5 crore)-'Not Made Regular (2) Corp. Bank - 50021 Payment not regular (3) Corp. Bank not regular (4) Corp. Bank CMEDI/01/060001 not regular (5) Corp. Bank CMEDI//01/50006 not regular 6.3.2 The figures mentioned at page No. 4, which form the basis of addition, are explained to be balances of the bank accounts as per books of accounts on the respective d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of authorities below. Undoubtedly, the addition in the impugned case has been made on account of entries noted in document Annexure A-120 as under: 18-12-2009 Rs. 4,22,78,168 19-12-2009 Rs. 4,16,02,105 20-12-2009 Rs. 4,32,49,160 21-12-2009 Rs. 4,21,14,927 76. Further it is not denied that the documents mentioned the name of Dr.Manjari Bhargava on the first page but in her statement made to the AO she has denied making any entry in the same and has stated that the same may have been made by some staff member. No statement of any staff member has been recorded by the search team. The Ld.CIT(A), we find, has gone through the contents of the document, Annexure A-120, and has noted that it only contains some general notings about the reminders of the work to be done, how the work is to be done and some observation probably of audit. The Revenue has not disputed this fact by pointing out otherwise from the document. As for the figures noted in the document which were the basis of addition made, we find that before the Ld.CIT(A) the assessee had explained the same to be pertaining to balances in its various bank accounts on the said dates, had filed a reconciliation of the figure....
X X X X Extracts X X X X
X X X X Extracts X X X X
....llowed. 82. Ground No.2 raised by the assessee in Cross Objection reads as under: "2. That he was further not justified to arbitrarily add a sum of Rs. 11,00,000/- on account of difference between audited trial balance and trial balance found during the course of search as Annexure A-110." 83. The brief facts relevant to the issue are that as per provisional trial balance in Annexure A-110, gross receipts were of Rs. 21.24 crores, but as per the profit and loss account, the receipts were only of Rs. 17.93 crores and so there was a difference of Rs. 3.31 crores. The assessee had explained during the course of assessment proceedings that sale of medicines/implant of Rs. 3.20 crores was reflected separately as medicines consumed. The Assessing Officer found that even if the said receipts were accounted for, there would be difference of Rs. 11,00,000/- and so he made addition of this amount of Rs. 11,00,000/-. 84. The Ld.CIT(A) upheld the order of the AO. 85. Before us, the Ld.Counsel for the assessee reiterated the contentions made before the lower authorities that the gross receipts of Rs. 21.24 crores were mentioned in the provisional trial balances and, therefore, was a provi....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... It was pointed out that the issue arose from the difference of cash receipts and the amount of cash deposited in bank as noted in document A-2 found during search. That during the impugned year the said difference was Rs. 35 lacs which was added back to the income of the assessee u/s 68 of the Act. Both the parties contended that their pleadings were identical to that made in ground no. 2 of ITA No.33/Chd/2014 for A.Y 2008-09. 91. Since admittedly identical issue has already been dealt with by us in Revenues appeal for A.Y 2008-09 in ITA No.33/Chd/2014, our decision on the same rendered at paras 21 to 26 of our order above will apply to the present ground also, following which we uphold the order of the CIT(A) deleting the addition made of Rs. 35 lacs . The ground of appeal No.2 raised by the Revenue is therefore dismissed 92. Ground No.3 raised by the Revenue reads as under: "3. The Ld CIT (A) has erred on the facts and in law in allowing the relief of Rs. 32,30,593/- in respect of excess depreciation claimed since the assessee has failed to prove the claim of higher depreciation on life saving equipments." 93. It was common ground that the issue raised in ground No.3 abov....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntentions made before the AO. The Ld.CIT(A) after considering the contentions of the assessee and on going through the impugned document deleted the addition made on finding that the billing software summary, which was copied in the seized document, related/pertained to the preceding year i.e. year ending 31.3.2010 and, therefore, was not relevant for the impugned year at all. He further noted discrepancy in the billing software printout as having added the figure of refund to the collection made while reflecting the net collection from OPD. He, therefore, held that the data reflected in the billing software printout could not be relied upon and, thus deleted the addition made. 98. Before us the Ld. DR relied upon the order of the AO, while the Ld.Counsel for the assessee relied upon the order of the CIT(A). 99. We have heard the contentions of both the parties. The issue before us relates to difference in cash receipts as recorded in a document seized during search, numbered Annexure-95. Page 84 and that as shown in the books of account of the assessee being Rs. 10,01,05,101/- and Rs. 9,68,66,118/- respectively, resulting in a difference of Rs. 32,38,983/-. The assessee has expla....
X X X X Extracts X X X X
X X X X Extracts X X X X
....see had shown receipts in its books of Rs. 9.68 crores only and on account of absence of any plausible explanation added back the difference as unrecorded cash receipts. 101. On going through the order of the Ld.CIT(A) deleting the addition made, we find that one of the reason for deleting the addition was the fact noted by the CIT(A) that the billing software summary related to the period ending 31.3.2010 pertaining to assessment year 2010-11 and thus did not pertain to the impugned year i.e. 2011-12. The findings of the Ld.CIT(A) at para 6.3.1 of his order are as under: "6.3.1 I have perused the relevant page of Annexure A-95, which is a handwritten page, on which cash collection of Rs. 10,01,05,101.60 is mentioned and 'net' has been worked out at Rs. 9,43,37,464/-. The appellant has explained that the figures mentioned on this page have been imported from the printout of the billing software. The printout of the billing software was submitted before the Assessing Officer also and a perusal of this printout reveals that the printout pertains to the year ending on 31.03.2010 and so none of the figures mentioned on this page are relevant to the year under consideration i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ting cash, cheque, draft, etc. recorded in Annexure -95, page 84 are inclusive of these refunds ,which have to be reduced, therefore, to arrive at the net cash collection. The refunds so reflected in the summary sheet amount to approximately Rs. 42 lacs(OPD 2lacs + IPD 40lacs) and difference between the cash collected as recorded in the document/summary sheet and that recorded in the books of account is approximately Rs. 32 lacs and, therefore, what emerges, therefore, is that there is no short collections in cash recorded in the books of the assessee, in fact, higher cash collection recorded and for this reason also, there is no need for making any addition on account of unaccounted cash collections made from OPD/IPD. The order of the CIT(A), therefore, deleting the addition is upheld. Ground of appeal No.4 raised by the Revenue is dismissed. 106. Ground of appeal No.5 raised by the Revenue reads as under: "5. The Ld CIT (A) has erred on the facts and in law in deleting addition of Rs. 28,33,000/- made u/s 68 of the Act since the assessee has failed to explain the entries made on Page 19 of the Annexure A-127 of the seized material." 107. Brief facts relevant to the issue ar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gs on other pages of the impugned Annexure A-127, were relatable to certain bills issued by the proprietorship concern of Dr.Manjari Bhargava, the entries made on the impugned document i.e. page 19 of Annexure A-127, were neither relatable to the entries made on other pages of the document, nor did the figures depict anything ,with the total also not tallying. The CIT(A) has found that this Annexure was maintained by some employees whose statement was not recorded during search or post search and since nothing can be derived from these entries, he treated the same as mere scribbling. 111. The above findings of the CIT(A) have not been controverted by the Revenue before us. The Revenue has not been able to give any meaning to the notings made in the said document, nor has it been able to relate it to any other page of the impugned document. The order of the CIT(A) ,therefore, deleting the addition so made of Rs. 28.33 lacs, treating them as rough notings ,we hold, calls for no interference on our part. Ground No.5 raised by the Revenue is, therefore, dismissed. 112 Ground of appeal No.6 raised by the Revenue reads as under: "6. The Ld CIT (A) has erred on the facts and in law i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is not known, but even if the impugned amount (total of the 'profit' column) is taken as profit, the profit declared in M/s Anvit Enterprises and M/s Silver Oak Medicos itself is more than this amount of Rs. 60,74,000/- and so no addition is called for. The contention of the Ld. Counsel in this regard is correct, since the profit declared by M/s Anvit Enterprises and M/s Silver Oak Medicos is Rs. 28,77,590/- and Rs. 48,18,545/- respectively during the year in question. Be as it may, the Assessing Officer is not right in making this addition particularly because the amounts are received through cheques from ECHS/ CGHS and so cannot remain unaccounted and also because these are mere bifurcation of receipts among various concerns of the group. Moreover, the claim of the appellant that these amounts are duly reflected in the books of accounts of the appellant or sister concerns of the appellant, has not been controverted by the Assessing Officer. In view of this discussion, addition made on this account is deleted. Ground of appeal No. 5(c) is allowed." 115. Before us the Ld. DR relied upon the order of the AO and the Ld.Counsel for the assessee relied upon the order of the CIT(A). 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oreover, the claim of the appellant that the amounts are duly reflected in the books of accounts has not been controverted by the Assessing Officer. The addition made on this account is accordingly deleted. Ground of appeal No. 5(d) is allowed." 121. The Ld. DR relied upon the order of the AO, while the Ld.Counsel for the assessee relied upon the order of the CIT(A). 122. We have heard the rival contentions and gone through the orders of authorities below. The factual findings of the Ld.CIT(A) that the Annexure revealed advances received from ECHS/CGHS patients which were received by way of cheques, has not been controverted by the Revenue. The Ld.CIT(A) has noted the assessee's claim that the amounts were duly reflected books of account has remained uncontroverted by the AO. The Ld. DR was unable to point out any infirmity in the order of the CIT(A), nor he was able to controvert the factual findings of the CIT(A). We, therefore, find no reason to interfere in the order of the CIT(A). Ground of appeal No.7 raised by the Revenue is dismissed. 123. Ground of appeal NO.8 raised by the Revenue is as under: "8. The Ld CIT (A) has erred on the facts and in law in deleting addition....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted. Hence, it is held that the Assessing Officer was not right in making the addition of the seized cash and so the addition made on this account is deleted. Ground of appeal No. 7 is allowed." 126. Before us Ld.DR relied on the order of the AO, while the Ld.Counsel for the assessee relied on the order of the CIT(A) 127. We have considered the rival contentions and gone through the order of the authorities below. The Ld.CIT(A) has given factual findings after going through the documents before him that the impugned document ,A 116,was petty cash book, the cash reflected in which was handed over to Dr.Akhil Bhargava and was relatable to entries made in a diary maintained by him, Annexure A-2. This finding has not been controverted by the Revenue before us. 128. The Ld.CIT(A) has also found that the cash found was far less than the cash reflected in the Books of the assessee on the said date. The Revenue has not controverted these findings of the Ld.CIT(A), nor pointed any infirmity in the same. 129. In view of the uncontroverted factual findings of the Ld.CIT(A),that the document A-116, which formed the basis of addition was only a petty cash book not reflecting the cash balanc....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Revenue and the Cross Objection of the assessee relating to A.Y 2005-06 in ITA No.30/Chd/14 and CO No.40& 43/Chd/16 respectively ITA No.30/Chd/2014(A.Y.2005-06): 136. The sole issue raised in the present appeal relates to addition made on account of share capital introduced during the year amounting to Rs. 90 lacs remaining unexplained. 137. Brief facts relating to the issue are that the assessee had received share application money of Rs. 90 lacs during the year from the following persons: Sh. Amandeep Singh Sidhu Rs. 40,00,000/- Sh. Bhupinder Baidwan Rs. 10,00,000/- Sh. Arjinder Bains Rs. 30,00,000/- Arjinder Bains (HUF) Rs. 10,00,000/- Total Rs. 90,00,000/- The Assessing Officer asked the appellant to produce the income tax returns, bank statements and confirmations in respect of receipt of the share application money from the above persons. The assessee filed PANs and addresses of these persons, but could not file the returns of income and bank statements and the reason given was that these persons were unable to locate their returns and bank statements at short notice. Confirmations from Sh.Amardeep Singh Sidhu and Sh. Bhupinder Baidwan were also filed. The....
X X X X Extracts X X X X
X X X X Extracts X X X X
....had duly discharged its onus of proving genuineness of the transaction and it was for the Department to make further enquiries, if they had any doubt. Accordingly, he deleted the addition made of Rs. 90 lacs. The relevant findings of the Ld.CIT(A) at paras 3.3 to 3.3.8 of his order are as under: 3.3 I have considered the submission of the Ld. Counsel and report of the Assessing Officer. I have also perused the records of the case. It is correct that the appellant was asked to file confirmations regarding share application money, for the first time only on 15.03.2013 and the appellant could not file confirmations from Sh. Arjinder Bains and Arjinder Bains (HUF) due to paucity of time and as per the version of the appellant, also because of the strained relationship with Sh. Arjinder Bains. On the facts of the case, it is evident that the appellant company was prevented by sufficient cause from furnishing the confirmations before the Assessing Officer and so the additional evidences produced by the appellant are admitted. The objection raised by the Assessing Officer that the confirmations are on plain piece of paper, are an afterthought and that the payments were for some underlyi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Act, the identity of the creditor, capacity of the creditor and genuineness of transaction is to be proved. The appellant has submitted PANs and details of cheques, which have been duly credited to the account of the appellant company and so the identity and genuineness of transaction is proved. The appellant has discharged its onus and the onus was shifted to the Department. If the Assessing Officer had any doubt about creditworthiness, he should have made due enquiries. 3.3.5 The Hon'ble Delhi High Court has held in the case of M/s Steller Investment Ltd. (supra) as under: "It is evident that even if it be assumed that the subscribers to the increased share capital were not genuine, nevertheless, under no circumstances, can the amount of share capital be regarded as undisclosed income of the assessee. It may be that there are some bogus shareholders in whose names shares had been issued and the money may have been provided by some other persons. If the assessment of the persons who are alleged to have really advanced the money is sought to be reopened, that would have made some sense but we fail to understand as to how this amount of increased share capital can be as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t applicable to the case of the appellant. . 3.3.8 In view of the above discussion, it is held that the Assessing Officer was not right in making addition on account of share application money received of Rs. 90,00,000/-. The addition made on this account is accordingly deleted. Ground of appeal No. 2 is allowed." 139. Against the same the Revenue has come up in appeal before us raising the following effective ground: "1.The Ld.CIT(A) has erred on the facts and in law in allowing the relief Rs. 90,00,000/- to the assessee in respect of addition of Rs. 90,00,000/u/s 68 of the Income Tax Act,1961 since the assessee has failed to prove the creditworthiness and genuineness of transactions" 140. Before us, the Ld. DR relied upon the order of the AO, while the Ld.Counsel for the assessee relied upon the order of the Ld.CIT(A). 141. We have heard rival contentions and have carefully gone through the orders of authorities below. We do not find any reason to interfere in the order of the Ld.CIT(A).The admission of additional evidence by the Ld.CIT(A) has not been challenged by the Department before us. The Revenue has not controverted the factual findings of the Ld.CIT(A) that Confir....
X X X X Extracts X X X X
X X X X Extracts X X X X
....II in August 2016 holding that in the absence of any incriminating material found during search, no assessment could be framed. Noting that the facts of the present case were identical and the assessee's case would succeed even on the legal ground, it accordingly filed Cross Objection thereafter in 2016 resulting in the impugned delay. 144. Considering the explanation given by the assessee in its application for condonation of delay, we find that there was reasonable cause for the delay in filing the impugned Cross Objection. Moreover we find that the grounds raised in the Cross Objection are legal, which the assessee in any case, could have raised before us during the course of hearing of the appeal of the Revenue also without raising the same by way of a Cross Objection. In view of the same therefore, we consider it fit to adjudicate the ground raised by the assessee in is Cross Objection. 145. The Ld.Counsel for the assessee pointed out that the assessment in the present assessee was framed u/s 153A r.w.s. 143(3) of the Act consequent to search proceedings conducted on the assessee on 21.9.2010. It was pointed out that in the assessment framed, the sole addition made was of Rs....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n view of this, we do not find any justification on the part of the lower authorities for making addition on account of share application money for the year under consideration. Both the Cross Objections of the assessee are accordingly allowed. 149. We shall now deal with the appeals relating to the issue of penalty levied u/s 271(1)(c) of the Act for the assessment years as under: ITA No.1218/Chd/2017: A.Y 2007-08 ITA No.1219/Chd/2017: A.Y 2008-09 ITA No.1220/Chd/2017: A.Y 2009-10 ITA No.723/Chd/2017: A.Y 2009-10 ITA No.1221/Chd/2017: A.Y 2010-11 ITA No.724/Chd/2017: A.Y 2010-11 ITA No.1222/Chd/2017: A.Y 2011-12 ITA No.725/Chd/2017: A.Y 2011-12 150. The Revenue's appeals relate to five years, i.e. for A.Ys 2007-08 to A.Y 2011-12. The challenge of the Revenue in all the appeals, we find, is against deletion by the CIT(A) of penalty levied on additions confirmed in quantum proceedings by the CIT(A) as under: 1) Disallowance of interest u/s 36(1)(iii) of the Act. 2) Disallowance of excess depreciation claimed on equipments. 151. The Revenue has raised identical grounds in all its appeals. For the sake of convenience we are reproducing the ground raised in the Re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) Advance for land Rs. 21,50,000/- Total Rs. 34,35,951/- for the reason that the assessee was not able to establish business expediency for giving these loans and advances and further relying on the decision of the CIT Vs. Abhishek Industries Ltd., 286 ITR 1(SC) for the proposition that where the assessee has borrowed funds or interest and certain amounts had been advanced for non business purposes, the interest to the extent of such advances had to be disallowed u/s 36(1)(iii) of the Act. The CIT(A) upheld the same. The AO thereafter levied penalty on the said addition. The CIT(A) deleted the penalty levied holding at para 4.3 to 4.6 of his order as under: 4.3 I have carefully considered the appellant's submissions. It is a trite law that assessment proceedings and penalty proceedings are two separate proceedings. Merely because addition has been made to returned income does not mean that penalty is also leviable. The addition made in the instant case is on account of disallowance of interest. The appellant had claimed that the same is allowable, whereas, the AO has held that in the instant case there is no commercial expediency and therefore it is not allowable....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... been confirmed by the Hon'bleP unjab and Haryana High Court. The head notes of this decision read as under: "Commissioner of Income-tax -III, Ludhiana v. Trident Infotech Corpn. Ltd.(2013)34 taxmann.com 132 (Punjab & Haryana) I. Section 271(l)(c), read with section 36(l)(iii), of the Income-tax Act, 1961 - Penalty - For concealment of income [Bonafide claim] - Assessment year 200-1-05 - Assessee had given interest- free advances and borrowed interest bearing loan - On basis of judgment of High Con ft, Assessing Officer disallowed interest on borrowings under section 36(l)(iii) and made addition to income of assessee - Further, he imposed penalty - Whether since additions were made on basis of decision of High Court, it did not establish that assessee had either concealed its income or furnished inaccurate particulars of income and, therefore, penalty was to be deleted - Held, yes [in favour of assessee] [Para 3] 4.6 The facts in the appellant's case are identical to the facts in the case of M/s Trident Infotech. Corporation Ltd. (supra). The penalty imposed by the AO is accordingly cancelled. This ground of appeal is allowed. 155. Before us the Ld. DR relied upon t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ical equipments at two different rates i.e. 15% and 40%. The AO had disallowed part of the claim of depreciation @ 40% on the ground that the surgical equipments on which the depreciation was claimed @ 40% was not life saving equipment. The appellant's contention was that the surgical equipments on which the depreciation was claimed @ 40% was life saving equipment. The only issue to be considered here is whether making of such claim by the appellant in the return of income led to concealment of income or furnishing inaccurate particulars of income, so as to invite the provisions of section 271(l)(c ). Penalty in this case has been levied for concealment of income. The relevant portion of the penalty order reads as under:- "In view of the above, it is held that the assessee had intentionally concealed income of Rs. 62,34,100/-. This fact came to light only during the course of assessment proceedings when the assessee was asked to produce corroborative documentary evidences to establish its claim. Had the case of the assessee not been taken up for scrutiny, the true facts would have never come to light and the assessee would have managed to evade tax. Thus, it is a clear case o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... tantamount to furnishing inaccurate particulars." 5.6 Reference in this regard is also made to the following case laws; (i) Kanchenjunga Advertising Pvt. Ltd ITA No.944 of 2011 The Hon'ble Delhi High Court in this case, observed as under: - "It is a well settled position that assessment proceedings and penalty proceedings are different in nature and that the findings given in the assessment proceedings, though may constitute good evidence, cannot constitute conclusive evidence for the purposes of levying penalty, (please see CIT v. Anwar All (1970) 76 ITR 696, CIT v. Khoday Eswarsa and Sons ( 1970) 83 ITR 369, and Anantharam Veerasinghaiam & Co. v. CIT (1980)123 ITR 457). It is also well settled that for the purpose of Section 271(l)(c) of the Act, the mere making of an incorrect claim does not amount to furnishing of inaccurate particulars of income. Where the assessee has submitted all the material and relevant facts relating to the claim and has made a complete disclosure, but takes a legal contention or position that a particular receipt is not taxable as income or that a particular expenditure or loss is allowable as deduction, the mere fact that the Assessing Of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....see had claimed deductions on account of set off of unabsorbed business losses against the income from the capital gains, which was held not to be mala fide. However, the Assessing Officer imposed penalty on the assessee. The Tribunal held that making an incorrect claim would not tantamount to furnishing of inaccurate particulars unless it was established that the assessee had acted with a mala fide intention or had claimed deductions being aware of the well settled legal position. The Tribunal had observed in plain words that the assessee had disclosed all the particulars along with the return of income and it was not a fit case for levy of penalty. The Tribunal deleted the penalty. Held that the appellant could not show that the above findings of the Tribunal were illegal or perverse in any manner so as to persuade this court to interfere therewith. Hence, the deleted of penalty was justified." 5.7 Reference in particular may be made to the decision of the Hon'ble Delhi ITAT in the case of Lala Harbhagwan Dass Memorial and Doctor Prem Hospital Pvt Ltd. V/s ITO (2012) 23 taxman.com 32. In this case, the facts were similar the facts in the case of the appellant. In this cas....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l/surgical equipment falls within the category of life saving equipment or not is always a debatable issue. Moreover, the total deprecation allowable on an asset is only 100% and the claim of deprecation @ 40% or @ 15% in particular year would only imply that the claim of depreciation would be spread over a longer period. Thus, if excess deprecation claimed in the current year is disallowed, the same can be claimed in the subsequent years and as such the whole exercise of claim of deprecation @ 15% or 40% would broadly be revenue netural. As seen from the order of the CIT(A), the appellant had foregone the claim of depreciation @ 40% on account of this issue. The relevant part of the order of the CIT(A) is reproduced below "During the course of appellate proceedings, the Ld. Counsel for the appellant has, inter-alia, submitted that since it is cumbersome to segregate the assets purchased upto FY 2005-06, on which depreciation is allowable @ 40% and also because even if depreciation is claimed @ 15%, the same can be claimed in subsequent years and so he would like to forego the higher rate of claim of deprecation for assets purchased upto FY 2005-06." 160. Before us, the Ld. DR rel....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the order of the CIT(A) deleting the penalty levied on disallowance of interest and excess depreciation for A.Ys 2007-08 to A.Y 2011-12 is, therefore, dismissed. All the appeals of the Revenue are therefore dismissed. 164. We shall now take up assesses appeals against confirmation of levy of penalty. ITA Nos.723 to 725/Chd/2017(A.Ys.2009-10 to 2011-12): 165. These appeal of the assessee against the order passed by the Ld.CIT(A) confirming the levy of penalty u/s 271(1)(c) of the Act, relate to assessment years 2009-10, 2010-11 and 2011-12 respectively. The assessee has challenged the order of the CIT(A) confirming the levy of penalty on the disallowance of consultancy charges in assessment years 2009-10 and 2011-12, while in assessment year 2010-11 the assessee has challenged the confirmation of penalty levied on disallowance of Rs. 11 lacs being difference of the audited figures and the figures shown in the provisional trial balance reflecting receipts of the assessee. Vis-à-vis the issue of penalty levied on disallowance of commission expenses of Rs. 15 lacs, the facts as noted in the order of the CIT(A) are that the AO had claimed expenses of Rs. 15 lacs as consulta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r inaccurate particulars has been submitted as the details were duly disclosed in the audited statements. Disallowance of claim by the assessee does not mean concealment of income nor furnishing inaccurate particulars of income. Reliance may be placed on the following judgments:- - CIT v Reliance Petroproducts Pvt. Ltd. (2010) 322 ITR 158 (SC) - Where it was held that mere making of a claim which is not sustainable in law, by itself, does not amount to concealment of particulars of income or furnishing inaccurate particulars. - National Textiles v. CIT (2001) 249 ITR 125 (Guj) - Where it was held that though the Department was justified in treating the cash credits as income of the assessee there was nothing to lead to a reasonable and positive inference that the assessee's explanation was false - circumstances do not justify imposition or penalty even by taking recourse to Explanation. 1 to s. 271(1)(c). Chandrayal Bassa v Income tax Appellate Tribunal (2003) 261ITR 67 (Raj.) - & Devsons P. Ltd v CIT(2011) 196 Taxman 21 (Del)- Where it was held that no penalty is leviable if the facts of the transactions are disclosed. -CIT v. Traders And Traders. 244 ITR....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... imposing penalty u/s 271(l)(c ) against this addition. The penalty imposed on this disallowance is confirmed. The appeal of the appellant is partly allowed." 169. Having heard the rival contentions we are not in agreement with the Ld.CIT(A). Undisputedly all particulars relating to the claim had been duly disclosed and the disallowance made for want of evidence to prove the rendering of services by the said consultant. It is also a fact on record that the payment was made through banking channels and even TDS deducted on the same. Clearly ,it is not the case that the claim of the assessee was found to be wholly false by the Revenue. We therefore hold that though it may be a fit case for making disallowance of expenses,but definitely the assessee cannot be charged with having concealed/furnished inaccurate particulars of income relating to the same. We therefore direct that the penalty levied on the disallowance of consultancy charges of Rs. 15 lacs be deleted. Grounds of appeal raised by the assessee in ITA Nos.723 & 725/Chd/2017 are, therefore, allowed. The appeals of the assessee in ITA Nos.723 & 725/Chd/2017 are allowed. 170. As far the appeal filed by the assessee relati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ced on the following judgments :- - CIT vs. Sangrur Vanasvati Mills Ltd. (2008) 303 ITR 53 (P&H) Where it was held that there is no penalty u/s 271(l)(c) is imposable on estimated addition if there is no evidence of concealment of income. - CIT vs. Ravail Singh & Co. (2002} 254 ITR 191 (P&H)- Where it was held that penalty u/s 271(l)(c) is not leviable where the additions was made on the basis of estimate and not on any concrete evidence of concealment of any transaction or furnishing of inaccurate particulars. - Pr. CIT Vs Pragati Industries Whether when at the time of making addition on account of undisclosed net profit, there is no other material available with AO except provisional P&L account, which too was subsequently explained by assessee, no such addition is mandated - YES: HC . CIT v. Traders And Traders. 244 ITR 367 (Madras High Court) & Woodward Governor India (P) Ltd. v CIT (2002) 253 ITR 475 (Del.) - & CIT v Dharam Chand L. Shah (1993) 204 ITR 462(Bom)- Where it was held that the fact certain additions were made in the assessment proceedings would not automatically justify the Revenue to impose penalty u/s 271 (l)(c). In view of the above....