TaxTMI 
TaxTMI 
2019 (8) TMI 556
X X X X Extracts X X X X
X X X X Extracts X X X X
....ss Objections in the appeals filed by the Revenue 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the income booked by the assessee for the impugned year was higher than the total cash receipts reflected in the diary thus 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ecause in many days he has not entered the amount of daily collection in his dairy and also not entered the deposit details of the receipts 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....07, 25.12.2007 06.01.2008 20.01.2008 27-01-2008, 03-02-2008, 08.02.2008 10.02.2008 19.02.2008 23-02-2008, 24-02-2008, 04.03.2008 09.03.2008 14.03.2008 15-03-2008, 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d in the bank are to the tune of Rs. 44.19 crores during the said period. This further proves the point that the diary maintained by Dr. Akhil was an incomplete diary with incomplete records since all deposits of cash/cheques/drafts are not recorded by Dr. Akhil in a proper manner." 14. Thus the Ld.Counsel for the assessee contended that it 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 c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n. The sum so deposited is reflected in the bank statement. The said annexure along with the bank statement highlighting the same amounts in the bank wasp/aced before Your Honors and the same verified. The bank accounts wherein the said cash is deposited are the banks of the assessee company which are reflected in the balance sheet. In light of the above, 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 h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cheque." 20. The Ld.Counsel for the assessee, therefore, contended that in view of the above, the Ld.CIT(A) had rightly held that there was no case for holding that the assessee had not accounted for the cash receipts to the extent of Rs. 5.45 crores noted in the diary in Annexure A-2 and deleted the addition so made by the AO. Our attention was drawn to the findings of the 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 appr....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of cash by Dr. Akhil Bhargava and deposit thereof in the bank account cannot form the basis of addition, since as discussed above, the appellant has not understated its receipts and moreover, no other corroborative material was found and seized to indicate that the receipts are understated. It is also seen that the appellant has declared more cash receipts in its books of accounts than the cash receipts 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 c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ry and in fact more was were duly accounted for in the books of the assessee. Not a single instance of cash noted as received any day in the diary has been pointed out to us as not reflected in the books of account by the assessee from the voluminous details filed to the revenue authorities. The detail filed by the assessee comparing the daily cash receipts noted in the diary and that reflected in the books of account for the entire year, the 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. Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pments and so higher rate of depreciation was allowable for the same. The Assessing Officer was not satisfied with the explanation of the assessee and restricted the depreciation to 15% on these items. 29. During appellate proceedings the Ld.Counsel for the assessee conceded its claim of depreciation @ 40% on the assets purchased up to financial year 2005-06 stating that it was cumbersome to segregate the assets upto that year. Regarding the assets purchased thereafter, 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 deprecia....
X X X X Extracts X X X X
X X X X Extracts X X X X
....requirement, therefore, to interfere in the order of the Ld.CI T(A). 32. We have heard the rival contentions and perused the orders of the authorities below. The facts relating to the case are that the AO had disallowed the claim of depreciation @ 40% on surgical equipments on the opening balance of these assets/WDV of these assets and on certain assets purchased during the year which as per him, did not qualify for the higher rate of depreciation amounting to Rs. 38,58,533/- and Rs. 10,70,314/- respectively and which added 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....92,000/- 35. The Assessing Officer questioned the assessee regarding business expediency for making these advances and also about proportionate disallowance of interest u/s 36(l)(iii) of the Act. The assessee filed a reply, the contents of which were summarized by the Ld.CIT(A) at para 3.1.1 of his order as under: (i) M/s Silver Oak Foundation is running a college under the name and style of 'Silver Oak College of Nursing', imparting medical/ nursing education to the students. The nurses trained in the college are provided to the hospital and so 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....val submissions, perused the orders of the authorities below. It is settled law that where sufficient own interest free funds are available, the presumption is that non business advances/investments have been made out of the said interest free funds. The Hon'ble Supreme Court has held so in the case of CIT (LTU) vs Reliance Industries Ltd. in Civil Appeal no.37 of 2019 dated 02-01-19. In view of the above settled law and considering the uncontroverted fact that the assessee had own interest free funds in the form of profits of the year alone amounting to Rs. 2.12 crores which were more than sufficient for making the impugned 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and that the total was less than the amount accounted for by the assessee in its books of account. The Ld.CIT(A) asked the AO to compute the total amount of receipts in Annexure A-119, who in turn conveyed to the CIT(A) that the total of Annexure A-119 was Rs. 9,39,65,366/-. The Ld.CIT(A) noted that since the assessee had shown more receipts in its books of account at Rs. 11.38 crores as compared to that reflected in Annexure A-119, the addition was wrongly made by the AO. He further noted that the entire amount received by the assessee from ECHS and CGHS was through cheques only and, therefore, held that there was no question of any understatement of the said 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in 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. 35,42,436/- Ground of appeal No.4 raised by the Revenue is dismissed. In effect the appeal of the Revenue is dismissed. We shall now take up the Cross Objection filed by the assessee for A.Y 2009-10. CO No.10/Chd/2014 (A.Y 2009-10) 56. Ground No.1 raised by the assessee reads as under: "1. That order passed u/s 250(6) of the Income Tax Act, 1961 by the Ld. Commissioner of Income Tax (Appeals), Chandigarh is against law and facts on the file in as much as he 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 m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h 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. 65. 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. 2.50 crores . The ground of appeal No.2 raised by the Revenue is therefore dismissed 66. 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. 29,46,569/- 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 equipm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ervations, probably of audit. He, also noted that for the figures mentioned in the said document which formed the basis of the addition, they were shown by the assessee to be reflecting the balances of the bank accounts as per the books of account. He, therefore, held that the addition could not be made on the basis of scribblings of some staff member since the person named in the diary Dr.Manoj Bhargava had denied noting anything in the diary. The Ld.CIT(A) held that it was probably only reconciliation of audit observation regarding bank balances by some staff and, therefore, deleted the addition made. The relevant findings of the Ld.CIT(A) at paras 6.3.1 to 6.3.3 of the CIT(A) are as under: "6.3.1 I have gone through the various pages of the impugned diary. On the first page of the diary, 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 b....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... this ann. 120, it is clear that this is a diary of Mrs. Manjari Bhargwa one of the director of the company. During the proceedings the statement has been recorded by this office dated on 25-03-13, in the statement she has said that on the diary name has been written by her only, but regarding these entries she does not know anything and these are not in her hand writing. The reply of assessee not accepted because he has not given any specific reply on this. In the absence of any satisfactory explanation these entries will be treated as income amounting to Rs. 16,92,72,410/- is added to income of the assessee company u/s 68 of the IT. Act, 1961. Penalty proceedings u/s 271(1) (c) of the Income Tax Act, 1961 are being initiated for concealing the particular of income/furnishing inaccurate particular of income." 74. The Ld.Counsel for the assessee, on the other hand, relied upon the order of the CIT(A). 75. We have heard the rival contentions carefully and perused the orders 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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. 91,69,805/- PSIDC Rs. 21,50,000/- 80. 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 Reserves for the year amounting to Rs. 6.10 crores as against the impugned advances additionally made during the year of Rs. 11 lacs, for making the advances and the presumption therefore is that the advances have been made out of own interest free funds. 81. 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 with us above, our decision rendered therein at para 41 of our order will apply to the present ground, following which we delete the disallowance of interest of Rs. 11,03,376/-. Ground of appeal No.1 raised by the assessee is allowed. 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 s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n confirming the addition of Rs. 11 lacs on account of the same is, therefore, upheld. Ground No.2 raised by the assessee is dismissed. The Cross Objection filed by the assessee is partly allowed. 87. We shall now deal with Revenues appeal and assesses Cross Objection pertaining to A.Y 2011-12.We shall first take up the Revenues appeal. ITA No.36/Chd/2014(A.Y.2011-12): 88. Ground Nos.1, 9 and 10 raised by the Revenue in this appeal are general in nature and, hence need no adjudication. 89. 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. 35,00,000/- 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." 90. 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 Revenues appeal in ITA No.33/Chd/2014 for A.Y 2008-09 dealt with us above. It was pointed out that the issue arose from the difference of cash receipts and the amount of cash deposited in ba....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Annexure A-95 of the seized material." 96. Briefly stated, the AO noted from a seized document Annexure A-95 page No.84, that the cash collection reflected therein was of Rs. 10,01,05,101/-. He further noted that in the books of account the same was reflected at Rs. 9,68,66,118/- only and so the AO proposed to add the difference of Rs. 32,38,983/- (10,01,05,101 - 9,68,67,118). The assessee when confronted with the same submitted that the impugned document was a handwritten document reflecting the collection as per the collection register as on the date of search, depicting the receipts as copied from the billing software summary. It was contended that the said software had various flaws due to which the software was used only for billing purpose and not accounting purpose and, therefore, the amount reflected on the software could not be taken to be sacrosanct. The AO was not satisfied with the reply of the assessee and made an addition of Rs. 32,28,983/- on the ground that the entire receipts were not declared in the books of account. 97. Before the Ld.CIT(A) the assessee reiterated the contentions made before the AO. The Ld.CIT(A) after considering the contentions of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....otal 11,78,24,467.10 Cash : Rs. 100105101.60 Cheque : Rs. 20,1 5,258.00 Draft : Rs. 31,05,000.00 Credit Card : Rs. 80,40,853.50 TOTAL O.P.D COLLECTION ; 1672421.10 Refunds 286939.00,Net: 18928149.10 TOTAL I.P.D COLLECTION : 98425276.00 Refund 4087812.00 Net:: 9433746400 OPD Cash : Rs. 17625384.60 Cheque : Rs. 1,17,471:00 OPD Draft : Rs. 3,05,000.00 Credit Card : Rs. 8,80,893.50 IPD Cash : Rs. 824797 17.00 Cheque : Rs. 18,97,787.00 IPD Draft : Rs. 28060 000.00 Credit Card : Rs. 71,59,960.00 Amount in Abbrevations Used. C- Cash, B-Bank, D-Draft, R-Credit Card Advance Amount. :2491471,00 and Annexure-95, page 84, placed at paper book page No.39, the contents of which are reproduced as under: Total Collection Cash Rs. 10,01,05,101.60 Cheque Rs. 20,15,258 Draft Rs. 31,05,000 Credit Card Rs. 80,40,853.50 Total OPD Collection 16724217.10 Refunds 286939.00 Net 18928749.10 Total IPD Collection 98425276 Refunds 4087812 Net 94337464 100. It is evident that the summary of total receipts of the assessee as recorded in the soft....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sp;Cheque Rs. 20,15,258/- Draft Rs. 31,05,000/- Credit Card Rs. 80,40,843/- Rs. 11,32,66,202/- 103. The breakup of the aforesaid collection from OPD and IPD is given below: OPD collections cash Rs. 1,76,25,384/- Cheque Rs. 1,17,471/- Draft Rs. 3,05,000/- Credit Card Rs. 8,80,893/- Rs. 1,89,28,749/- 104. Similarly, the IPD collections are given as under: Cash Rs. 8,24,79,717/- Cheque Rs. 18,97,787/- Draft Rs. 2,98,00,000/- Credit card Rs. 71,59,960/- Total Rs. 9,43,37,461/- 105. On totaling each mode of collections from the OPD and IPD , the same tallies with the total collections for different modes as reflected above(1,89,28,749 + 9,43,37,461 = 11,32,66,210). The total of the OPD and IPD collections as aggregated above being Rs. 1,89,28,749/- and Rs. 9,43,37,464/-, we find are reflected against the TOTAL O.P.D COLLECTION Net / TOTAL I.P.D COLLECTION Net in the summary sheet as under: TOTAL O.P.D COLLECTION ; 1672421.10 Refunds 286939.00,Net: 18928149.10 TOTAL I.P.D COLLECTION : 98425276.00 Refund 4087812.00 Net:: 9433746400 In t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... findings of the CIT(A) at para 7.4 of his order are as under: "7.4 A perusal of other pages of this annexure (a note pad) reveals that these contain some entries alongwith the bills numbers and these entries are relatable to the bills issued by M/s Silver Oak Medicos, a proprietorship concern of Dr. Manjari Bhargava. However, the entries made at page No. 19 are not relatable to entries made on other pages of this annexure. This annexure was maintained by some employee, who could have explained the no tings made on this annexure, but the explanation/ statement of the person, who had made these notings, was not recorded at the time of search or post search enquiries. Be as it may, these entries are mere scribblings, whose sum has also not been correctly worked out (the total of these entries is 28.33 lacs, whereas the total on this page is mentioned as 28.50) and cannot be said to be unaccounted income/ receipt of the appellant, particularly when the entries made on other pages of this annexure are relatable to the bills issued by M/s Silver Oak Medicos. The addition made on this account is accordingly deleted. Ground of appeal No. 5(b) is allowed." 109. Before us, the L....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ving as under: 8.3.1 The appellant has explained that for ECHS/ CGHS patients, treated by the appellant hospital, the bills are issued on various counts like OPD, surgery, room rent, medicines, dialysis, scanning etc. It is also explained that consolidated amount is received from ECHS/CGHS in respect of various patients. According to the appellant, this register (A-21) contains patientwise detail of the amounts received from ECHS/ CGHS, which had been bifurcated among various sister concerns. 8.3.2 A perusal of various pages of A-21 reveals that the explanation of the appellant is correct. This register (A-21) contains details of receipts from ECHS/ CGHS and these receipts have been bifurcated by making various columns like Med (medicines), MRI, implant, CT etc. The last column on various pages of this register is 'profit'. The entries were made by some staff member, probably for the purposes of bifurcation of receipts (from ECHS/ CGHS) among various concerns carried on by the group. This register was maintained by some employee, who could have explained the notings on this register, but the explanation/ statement of the person, who had made these notings,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....esaid factual findings of the Ld.CIT(A) have also remained uncontroverted before us. In view of the same, we do not find any reason to interfere in the order of the CIT(A) deleting the addition of Rs. 60.74 lacs. Ground of appeal No.6 is, therefore, dismissed. 118. Ground No.7 raised by the Revenue reads as under: "7. The Ld CIT (A) has erred on the facts and in law in deleting addition of Rs. 36,03,000/- made u/s 68 of the Act since the assessee has failed to explain the entries made in the Annexure A-3 of the seized material." 119. Brief facts, as stated in the CIT(A)'s order are that, this annexure (which was a register) contained details of advances received from various patients covered by ECHS/ CGHS and also the details of payments received from ECGS/ CGHS. The assessee had claimed before the Assessing Officer that the receipts were duly reflected in the books of accounts of the assessee company, but the Assessing Officer was not satisfied with the explanation of the assessee and made addition of sum total of the amount of the advances, entered in this document amounting to Rs. 36,03,000/-. 120. The Ld.CIT(A) deleted the addition holding as under....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he assessee and made addition of the amount seized of Rs. 45,17,000/-. 125. The CIT(A) deleted the addition holding as under: "11.3 I have considered the facts of the issue. The Annexure A-l16 is a petty cash book and cash is handed over to Dr. Akhil Bhargava each day for keeping the same in the currency chest. The amount given to him everyday is mentioned in A-l 16 and is relatable to the entries made by Dr.Akhil Bhargava in the diary A-2, which was also seized. Thus, the conclusion of the Assessing Officer that cash in hand reflected in A-l 16 is actual cash in hand as per the books of accounts, is not correct. 11.3.1 The accounts of the appellant are maintained on computerised accounting system Tally' and it is noticed that as on the date of search i.e. 21.09.2010, the entries had been made in tally accounts only upto 01.09.2010. As per these computerized accounts, cash in hand as on 01.09.2010 was of Rs. 62,80,060/-. The appellant has prepared its cash book after this date by importing the entries made in the daily cash book i.e. A-116 and cash in hand as per this cash book as on 21.09.2010 is of Rs. 61,85,666/-, which should have been compared by the A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t account by resort to provisions of section 36(1)(iii) ignoring the fact that the advance was made for the purpose of business." 131. 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. 91,69,805/- PSIDC Rs. 25,00,000/- 132. 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 advances were the same as in preceding year except additional advance given to PSIDC of 3.50 lacs, that the assessee had sufficient own interest free funds ,in the form of Reserves for the year amounting to Rs. 7.72 crores and the presumption therefore is that the advances have been made out of own interest free funds. 133. 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 with us above, our decision rendered therein at pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t Ltd. (251 ITR 263), affirming the judgement of Hon'ble Delhi High Court (192 ITR 287). The Assessing Officer was not satisfied with the explanation of the appellant and held that the creditworthiness and genuineness of transaction was not proved. He accordingly, made addition of entire amount of Rs. 90 lacs. 138. During appellate proceedings before the CIT(A), the assessee submitted additional evidence by way of confirmation of the parties which after considering the objection of the AO was duly admitted by the CIT(A). The Ld.CIT(A) thereafter, after considering all the evidences on record found that the contention of the AO that the cheques shown to be given to the assessee and that deposited in the bank did not tally, was factually incorrect. He found that the cheques received from Shri Arjinder Bains and Shri Arjinder Bains(HUF) matched with the cheque number mentioned in the bank statement of the assessee company. He further found that even with regards to the cheque received from Shri Amardeep Singh Sandhu and Shri Bhupinder Baidwan, there was no mismatch, with the cheques having been duly credited in the bank account of the assessee. The Ld.CIT(A) further noted that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....orrect. All the share application money received from all the persons have been credited to the bank account of the appellant company. The appellant has provided sufficient evidence in the form of cheques received from Sh. Arjinder Bains and Arjinder Bains (HUF) and the cheque numbers match with the cheque numbers mentioned in the bank statement of the appellant company. The Assessing Officer has also contended that the entries regarding share application money in the bank statement of Sh. Amardeep Singh Sidhu and Sh. Bhupinder Baidwan are not proper and do not correlate with the entries of the bank statement of the appellant company, but the contention of the Assessing Officer in this regard is not correct. The share application money received through cheques has been duly credited in the bank account of the appellant company. 3.3.2 The appellant had submitted before the Assessing Officer in the assessment proceedings to issue summons to Sh.Arjinder Bains for confirming the investment in share application money. In fact, in the report of the Assessing Officer filed in the appellate proceedings, it has been mentioned that the summons have been issued to, Sh.Arjinder Bains ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s register, share application forms, share transfer register, etc. it would constitute acceptable proof or acceptable explanation by the assessee; (5) the Department would not be justified in drawing an adverse inference only because the creditor/ subscriber fails or neglects to respond to its notices; (6) the onus would not stand discharged if the creditor/ subscriber denies or repudiates the transaction set up by the assessee nor should the AO take such repudiation at face value and construe it, without more, against the assessee; (7) the AO is dutybound to investigate the creditworthiness of the creditor/ subscriber, the genuineness of the transaction and the veracity of the repudiation. In the case of private placement the legal regime would not be the same. A delicate balance must be maintained while walking the tightrope of ss. 68 and 69 of the IT Act. The burden of proof can seldom be discharged to the hilt by the assessee; if the AO harbours doubts of the legitimacy of any subscription he is empowered, nay dutybound, to carry out thorough investigations. But if the AO fails to unearth any wrong or illegal dealings, fie cannot obdurately adhere to his suspicions and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....our notice by the Ld.DR casting any doubt on the genuineness of the transaction. The Ld.CIT(A) has also given a finding that share application money received from two persons was returned subsequently, which also has not been controverted by the Revenue before us. We therefore agree with the Ld.CIT(A) that the assessee had duly discharged its onus of proving the genuineness of the transaction and with the Revenue not pointing out any reason to doubt the same, there remains no basis for treating the share capital as unexplained . In view of the above, we uphold the order of the CIT(A), deleting the addition made of Rs. 90 lacs on account of unexplained share application money. The ground of appeal raised by the Revenue is dismissed. In effect the appeal of the Revenue is dismissed. C.O. NOs. 40 & 43/Chd/2016: 142. The assessee has filed two Cross Objections before us raising identical ground vis-à-vis the validity of the assessment framed as under: "That the order passed u/s 153A read with Section 143(3) of the Income Tax Act, 1961 by the Ld. Assessing Officer is against law and factys on the file in as much as he was not justified to hold that even....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r attention was drawn to the decision of the ITAT Chandigarh Bench in the case of Mala Builders Pvt. Ltd. vs ACIT reported in 51 ITR (Trib) 272 pointing out therefrom the reference made to several decisions of the Hon'ble High Courts holding so. 146. The Ld.DR was unable to bring to our notice any incriminating material found during search which was the basis of the addition made, though at the same time he vehemently argued that various high courts had ruled otherwise also holding that addition need not be confined and based only to material found during search. 147. We have considered the contention of the Ld.Counsel for the assessee. We agree that it has been time and again been held by the various High Courts that if no incriminating material is found during the search action, the addition in the case of already concluded assessment cannot be made while framing assessment u/s 153A of the Act. Reliance in this respect can be placed in the case of 'CIT Vs. Continental Warehousing Corporation' ITA No. 523 of 2013 reported in (2015) 279 CTR 0389 (Bombay) and of the Hon'ble Delhi High Court in the case of 'CIT Vs. Kabul Chawla' 234 Taxman 300 (Delhi). The aforesaid decisio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....shed inaccurate particulars of income. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the penalty of Rs. 19,78,824/- on the confirmed addition on account of excess depreciation claimed u/s 32 as the assessee had furnished inaccurate particulars of income by claiming incorrect depreciation. 4. It is prayed that the order of the Ld. CIT(A) be cancelled and that of the assessing officer may be restored. 5. The appellant craves leave to add or amend any grounds of appeal before the appeal is heard or is disposed off." 152. The issue relating to disallowance of interest u/s 36(1)(iii) of the Act was raised before us in the Cross Objections filed by the assessee for A.Y 2008-09 to A.Y 2011-12 in CO Nos.9 to 12/2014, which has been dealt in earlier part of our order, wherein we have deleted the addition so made at paras 41, 59, 81 and 133 of our order above. No justification remains therefore for the levy of penalty on the same. We therefore do not find any reason to interfere in the order of the Ld.CIT(A) deleting the penalty levied on the disallowance of interest u/s 36(1)(iii) of the Act for A.Y 2008-09 to A.Y 20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sue had been levied by the AO. The Hon'ble I.T.A.T. vide its order in ITA No 1298/Chandi/2009 dated 26.03.2012 held as under:- "We have heard the rival contentions and perused the record. The issue arising in the present appeal is in relation of the penalty levied u/s 27l(l)(c) of the Act, The assessee during the year under consideration had claimed interest expenditure on the borrowed funds in its Profit & Los:, Account. The AO noted the assessee to have made interest free advances on which no interest was charged by the assessee and in view of the ratio laid down by the Jurisdictional High Court in M/s Abhishek Industries Ltd. (supra) the Assessing Officer computed the disallowance u/s 36(1; (Hi) of the Act. The assessee was held to be liable for le\y of penalty u/s 271(l)(c) of the Act on the aforesaid addition of Rs. 45,14,373/-. The aforesaid addition made on account of application of the judicial ratio laid down by the Jurisdictional High Court in the case of M/s Abhishek Industries Ltd. (supra), does not establish the case of the Revenue for the assessee to have eithei concealed its income or furnished inaccurate particulars of income. In the absence of nonfulfi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Hon'ble Jurisdictional High Court in the case of Trident Infotech(supra) wherein penalty levied on identical disallowance of interest u/s 36(1)(iii) was deleted holding that mere disallowance of interest following decision of the Court in the case of Abhishek Industries(supra) does not establish that the assessee had concealed /furnished inaccurate particulars of income, particularly when all particulars relating to the claim had been duly disclosed. The facts leading to the disallowance of interest in the present case are identical. The Revenue has not been able to distinguish the said decision before us. We therefore uphold the order of the Ld.CIT(A) deleting the penalty levied on disallowance of interest u/s 36(1)(iii) of the Act for A.Y 2007-08. In effect penalty levied on disallowance of interest u/s 36(1)(iii) of the Act for A.Y 2007-08 to A.Y 2011-12 , is held to be rightly deleted by the Ld.CIT(A). 158. As for the penalty levied on disallowance of excess depreciation, the same relates to depreciation claimed at higher rates on WDV of assets as on 01-04-06 , which the assessee had conceded before the Ld.CIT(A) stating that it would be difficult to bifurcate the open....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sh the particulars of his income. The complete facts regarding the claim of depreciation had been mentioned in the depreciation chart filed with return of income and nothing had been concealed therein. Therefore, it cannot be held that the appellant had concealed the particulars of income. 5.5 As regards, furnishing of inaccurate particulars, if is an undisputed position in the present case that no information given in the Return was found to be, incorrect or inaccurate. In this case, there is no finding that any details supplied by die appellant in its return were found to be incorrect or erroneous or false. The only issue in dispute is that appellant had claimed depreciation on certain surgical equipments at a rate of 40% on the ground that these equipments were life saving. The AO has held that some of these equipments were not life saving and reduced the depreciation claimed on these equipments to 15%. Whether a particular surgical equipment is life saving or not is a debatable issue. This by itself therefore cannot be held to be furnishing of inaccurate particulars of income. A mere making of the claim, which is not sustainable in law, by itself, will not amount to fu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....risdictional High Court has held that penalty under sec. 271(l)(c) is not leviable in respect of deductions which are debatable and no concealment of income is involved. (iii} Commissioner of Income Tax Vs Lakhani India Ltd [2009] 17 DTK 307 (T&H); [2010] 324 ITR 73. Penalty under sec.271(l)(c) - Concealment - excess claim for deduction under sec. 80HHC - In view of concurrent finding recorded by the CIT(A) and the Tribunal that there was no concealment or misrepresentation by the assessee, impugned order setting aside the levy of penalty under sec.271(l)(c) cannot be held to be erroneous - no substantial question of law arises. (iv) Commissioner of Income-tax-I, Ludhiana v. Eastman International f20141 41 taxmann.com 239 (Punjab & Haryana) Section 271(l)(c), read with section 37(1) of the Income-tax Act, 1961 - Penalty - For concealment of income [Disallowance of claim, effect of] - Assessment year 2005-06 - During assessment proceedings, Assessing Officer rejected assessee's claim for certain expenses being prior period expenses - Commissioner (Appeals) as well as Tribunal confirmed said disallowance - Thereupon, Assessing Officer passed a ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sidered as concealment of income or furnishing inaccurate particulars, especially when the relevant particulars were disclosed before the AO. 5.8 The AO has relied upon the case of M/s Zoom Communication Pvt. Ltd. 327 ITR 510. In that case, the Hon'ble Delhi High Court had held as under:- "It is true that mere submitting a claim which is correct in law would not amount to giving inaccurate particulars of income of the assessee, but it cannot be disputed that the claim made by the assessee needs to be bonafide. If the claim besides being incorrect in law is malafide. Explanation 1 to section 271(1) would come into play and work to the disadvantage of the assessee." 5.9 Thus the Hon'ble Delhi High Court had drawn the distinction between bonafide claim and malafide claim, Applying this test in the present case it cannot be said by any stretch of imagination that the claim of the appellant was malafide. 5.10 As submitted by the appellant, the transaction of claim of depreciation was fully disclosed in the audited accounts and the income tax return filed by the company. It is not the AO's case that the claim of deprecation was not genuine ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he other hand, relied upon the order of the CIT(A). 162. We have gone through the order of the CIT(A). We do not find any infirmity in the same. The Ld.CIT(A), we find, has deleted the penalty noting that the assessee had not concealed any particulars regarding the claim of depreciation on the surgical equipments, having disclosed all facts relating to the same in the depreciation chart filed. No detail filed by the assessee was found to be incorrect or erroneous. The Ld.CIT(A) has further noted that the disallowance was only on account of rate at which the depreciation was to be claimed on the surgical equipments with the assessee claiming 40%, while the AO restricted it to 15% stating that the asset did not qualify surgical equipments. The CIT(A) noted that whether particular equipment was a life saving equipment, qualifying for depreciation @ 40%, was a debatable issue and claim of the assessee could not be clearly unsustainable in law . He, therefore, held that the claim of the assessee was not malafide and the assessee therefore could not be said to have concealed or furnished inaccurate particulars of income. He further noted that the assessee had foregone this claim for t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... order of the AO holding that the assessee had not filed any evidence regarding the services rendered even by electronic mode like email, video conferencing etc. provided by Shri Rajneesh Ramitra. Thereafter the AO imposed penalty on this disallowance @ 100% on tax sought to be evaded. The Ld.CIT(A) upheld the penalty so levied holding that in the absence of substantiation of the genuineness of the claim by the assessee, the expenditure was claimed only with a view to reduce the tax leviable and, therefore, penalty had been justifiably levied on the disallowance so made. 166. Before us, the Ld.Counsel for the assessee relied on the submissions filed before the Ld.CIT(A) during appellate proceedings, reproduced at para 9.4 of the order as under: "9.4 AR of the appellant vide written submissions dated 02/03/2017 submitted as under:- "Without prejudice to the submission as per Ground of Appeal No.-l, It is further submitted that the Ld. Assessing officer has erred in imposing the penalty u/s 271(l)(c) of Income Tax Act as the disallowance u/s 37 of Income Tax Act amounting to Rs. 1500000/- is already under appeal before Hon'ble IT AT, Chandigarh. When bonafide....
X X X X Extracts X X X X
X X X X Extracts X X X X
....act 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 facts of the case and judgements, it is prayed that appropriate relief may kindly be allowed to the assessee on the grounds of appeal and the penalty imposed may kindly be cancelled. " 167. Referring to the same the Ld.Counsel for the assessee contended that Shri Rajneesh Ramitra was a technocraft and had provided consultancy services to the assessee in Healthcare System Procedure and day-to-day administration and the service had been provided by way of health workshop in the hospital and via email, teleconferencing, video conferencing, etc.. It was pointed out that the payment had been made as per the agreement entered into with him and TDS also had been deducted on the same. It was further contended that evidences by way of copy of his passport, income tax returns, PAN and address had been duly filed. It was, therefore, contended that mere disallowance of claim would not lead to levy of penalty when otherwise, all particulars relating to the claim had been duly disclosed by the assessee. 168. The Ld. DR, on....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he order of the CIT(A) at para 11.3 of his order are as under: 11.2 As regards, the penalty on addition of Rs. 11 lakhs u/s 37 is concerned, it is seen from the assessment order that during the assessment proceedings, the AO noted that as per the seized material, the receipts shown were Rs. 21.24 crores whereas in the P&L account the receipts shown were only Rs. 17.93 crores. The appellant was able to explain the difference of 3.20 cores but could not explain the difference of Rs. 11 lakhs. The AO accordingly held that this amount of Rs. 11 lakhs is unaccounted of the appellant and added the same to the total income of the appellant. The filed an appeal before the CIT(A). The CIT(A) held that the appellant had not been able to explain the reasons for the difference and therefore the same was to be treated as unacounted receipts. The AO thereafter levied penalty on this addition @ 100% of tax sought to be evaded." 171. The Ld.CIT(A) on finding that the assessee was unable to controvert the findings of the Ld.CIT(A) in quantum proceedings that Rs. 11 lacs represented unaccounted receipts of the assessee, upheld the penalty levied. 172. Before us, the Ld.Counsel for the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d that appropriate relief may kindly be allowed to the assessee on the grounds of appeal and the penalty imposed may kindly be cancelled. " 173. Referring to the same the Ld. Counsel for the assessee contended that the difference related to the figures of receipts reflected in the provisional trial balance found during the course of search and that reflected in the books of account of the assessee, which the assessee was unable to explain. It was contended that being provisional figures they were just estimates and, therefore, it could not be said categorically that the assessee had concealed the income to the extent of Rs. 11 lacs. 174. The Ld. DR, on the other hand, relied upon the order of the CIT(A). He drew our attention to para 11.5 of the order of CIT(A) as under: "11.5 I have carefully considered the appellant's submissions. It is an admitted fact on record that there was a difference in the receipts shown in the P&L account and the receipts shown in the seized documents. It is also an admitted fact on record that the appellant had failed to explain the difference in the receipts. The CIT(A) has categorically held that the difference of Rs. 11 lakhs was t....