TaxTMI 
TaxTMI 
2023 (10) TMI 1427
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....ppeal taken by the assessee in ITA No. 139/Jodh/2022 is as under : "1. Under the facts and circumstances of the case and in law, the Ld. CIT (Appeals)-II, Udaipur has erred in affirming the order of the Ld. Assistant Commissioner of Income Tax, Central Circle-02, Udaipur, passed u/s 143(3) r.w.s. 153A of the Income Tax Act, 1961, is bad in law & illegal. 2. Under the facts and circumstances of the case and in law, Ld. CIT (Appeals)-II, Udaipur has erred in rejecting the books of account u/s 145 of the IT Act and directed to Ld. AO to work out the GP for the year under consideration by considering the average GP of last 3 years and after applying the same to total turnover. Where as in appellant's case GP is not applicable, as it is in medical profession/business, therefore action of Ld. CIT(Appeals)-II, Udaipur, is erroneous & Bad in law and liable to be deleted." 3. The appellant prays for justice and the appeal deserves to be allowed. 4. The appellant craves leave to add, alter, amend and modify any grounds of appeal on or before the date of hearing. 2.2 The grounds of appeal taken by the assessee in ITA No. 140/Jodh/2022 is as und....
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....ction of Ld. CIT(Appeals)-II, Udaipur is erroneous & bad in law and liable to be deleted. 3. The appellant prays for Justice and the appeal deserves to be allowed. 4. The appellant craves leave to add, alter, amend and modify any grounds of appeal on or before the date of hearing." 2.5 The grounds of appeal taken by the assessee in ITA No. 143/Jodh/2022 is as under : "1. Under the facts and circumstances of the case and in law, the Ld. CIT(Appeals)-II Udaipur has erred in affirming the order of the ld. Assistant Commissioner of Income, Central Circle-2, Udaipur, passed u/s 143(3) r.w.s 153A of the Income Tax Act, 1961, is bad in law & illegal. 2. Under the facts and circumstances of the case and in law, Ld. CIT(Appeals)-II Udaipur has erred in affirming the addition of Rs. 677848/- on account of commission payment to various persons in the course of business, therefore action of Ld. CIT(Appeals)-II, Udaipur, is erroneous & Bad in law and liable to be deleted. 3. Under the facts and circumstances of the case and in law, Ld. CIT(Appeals)-II Udaipur has erred in affirming the addition of Rs. 645300/- on account of anesthes....
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.... Rs. 1,60,28,120/- made on account of discount allowed on this bills of patients for treatment. The Ld. CIT (A) ignored the principle of preponderance of human probability as laid down by Hon'ble SC in the case of Sumati Dayal v. CIT (1995) 214 ITR 801(SC) & CIT v. Durga Prasad More (1971) 82 ITR 540 (SC). 3. Whether on the facts and circumstances of the case for the assessment year under consideration the ld. CIT (A) is justified in Law in deleting the addition of Rs. 30,02,385/- made on account of suppression of x-ray receipts. The Ld. CIT (A) ignored the principle of preponderance of human probability as laid down by Hon'ble SC in the case Sumati Dayal v. CIT (1995) 214 ITR 801 (SC) & CIT v. Durga Prasad More (1971) 82 ITR 540 (SC). 4. The appellant craves leave or reserves right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal." 3.1 The grounds of the appeal taken by the revenue in appeal No. 168/Jodh/2022 reads as follows: "1. The learned CIT(Appeal) has erred in law and on facts in granting relief to the assessee." 2. Whether on the fact and circumstance....
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.... account separately. The Ld. CIT (A) ignored the principle of preponderance of human probability as laid down by Hon'ble SC in the case of Sumati Dayal v. CIT(1995) 214 ITR 801(SC) & CIT v. Durga Prasad More(1971) 82 ITR 540 (SC)." 3. Whether on the facts and circumstances of the case for the assessment year under consideration the ld. CIT (A) is justified in Law in deleting the addition of Rs. 30,39,039/- made on account of suppression of x-ray receipts. The Ld. CIT (A) ignored the principle of preponderance of human probability as laid down by Hon'ble SC in the case Sumati Dayal v. CIT(1995) 214 ITR 801 (SC) & CIT v. Durga Prasad More (1971) 82 ITR 540(SC)" 4. Whether on facts and in circumstances of the case the Hon'ble ITAT is justified in deleting the addition of Rs. 15 lakh made on protective basis." 5. The appellant craves leave or reserves right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal." 4. The fact as culled out from the records is that a search and seizure operation was carried out at the residential and business premises of Mewar Hospital Grou....
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....RS 1,67,54,824/- respectively. Further, as per law, if any loose paper/document founds from the premise of assessee, it is presumed that it belongs to assessee and transactions appearing therein are correct and pertain to assessee unless it is proved otherwise by the assessee. In this case it is also the responsibility of assessee to prove the same (seized papers) as otherwise to rebut the presumption but assessee failed to do so. Argument of unsigned and undated and unnamed document is not acceptable since there is no dispute that contents on the seized papers pertains to the assessee company which have details of receipt of Assessee Company from FY 2008-09 to FY 2011-12. The argument of the AR that the contents of paper are projections/estimates/targets etc. is also not acceptable in absence of any supporting evidence. Argument of AR regarding formula error of excel on the basis of audit report is also not acceptable in absence of supporting evidence as well as in the light of fact that audit report is being prepared by the auditors on the basis of books/documents produced by the assessee before the auditor. In this case seized paper in question was not part of regular books of a....
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....and decided as under:- (i) The AO, on perusal of page no. 5 of Exhibit-7 seized during the course of search, observed that total turnover in the FY 2011-12 relevant to AY 2012-13 was of Rs. 10,38,94,812/- but as per ITR it was only of Rs. 8,71,39,988/- and therefore there was suppression of sale of Rs. 1,67,54,824/- made by the assessee. The argument of the Ld. AR of the assessee that the aforesaid document does not bear any signature of any director or any officer of the appellant and that the paper alongwith other anomalies is of projection and estimate only was not found acceptable by the AO. The AO observed that the issue is based on account of suppression of turnover based on seized material and the statement of Sh. Manish Chhaparwal, Director of the assessee company recorded during the course of search. He has placed reliance on question no. 8 of this statement wherein Sh. Chhaparwal has clearly admitted that all the cash/jewellery/documents etc. found at this premises belongs to them only and that neither he nor any other director of the assessee company challenged the authenticity of the seized paper. (ii) The AO observed that in the seized ....
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.... the receipts are fully verifiable and accordingly requested to delete the addition so made by the AO. (iv) I have considered the arguments of the appellant as well as the relevant findings of the AO and have also perused the order of Ld. CIT (A) for the AY 2011-12. On perusal of the seized page no. 5 of Exhibit -7 of Annexure AS vis-à-vis Profit & Loss Account statement for the period ended on 31 March, 2012, it is observed that there is suppression of gross revenue in ITR as compared to the seized papers to the extent of Rs. 1,67,54,824/-. It is observed that the seized document first notes the branch wise gross receipts for FY 2010-11 & 2011-12 and thereafter a "Total" column for FY 2008-09 to 2011-12 has been noted. The branch wise gross receipts for the FY 2010- 11 and FY 2011-12, as noted in the seized document, are tabulated below: Branch Gross receipts noted in seized document in FY 2010-11 (in Rs. ) Gross receipts noted in seized document in FY 2011-12 ( in Rs. ) Udaipur 4,28,86,921/ 7,10,44,106/- Bhilwara 1,01,70,877/- 1,49,67,947/- Modasa 29,06,036/- 73,19,547/- Neemuch - 82,81,566/- Ujjain ....
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.... by him either before the AO or before me. Further the argument of the appellant that the seized document is unsigned, undated and unnamed is also not found acceptable since the contents of the seized documents tally with the audited accounts of the appellant for the AY 2009-10 to 2011-12 which has also been admitted by the Ld. AR of the appellant. Thus the content and veracity of the seized document remains undoubted. Therefore in totality of facts, I find that the appellant has suppressed its gross receipts by Rs. 157,54,824/- for the year under consideration. (vii) However, I concur with the submissions of the appellant that the gross receipts cannot be taxed as income of the appellant. I am of the opinion that the entire gross receipts of Rs. 1,67,54,824/- could not have been added as income of the appellant for the assessment year in question but it will be appropriate to apply the gross profit rate on the aforesaid gross receipts as I find that the estimation of income out of such receipts is required to be computed as the receipts cannot, as it is, be added and it is only the profit earned /embedded in the gross receipts which needs to be taxed. (....
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....profits of a trade or business. That cannot be done without deducting the losses and the legitimate expenses of the business..." (x) In Man Mohan Sadani vs. Commissioner of Income-tax [2010] 188 Taxman 277 (Madhya Pradesh), the Hon'ble Madhya Pradesh High Court, held that "the total sales could not be regarded as the profit of the assessee. The net profit rate had to be adopted and once it was adopted it could not be said that there was perversity of approach. Whether the rate was low or high would depend upon the facts of each case." (xi) Thus, once it is established that the result declared by the appellant are not correct, provisions of Sec. 145(3) are applicable which the AO has failed to invoke. The Act provides coterminous power to CIT(A)'s as are available to the AO and by using those powers, 1 hereby invoke the provisions of Sec. 145(3) in this case and reject the trading result declared by the appellant. After rejection of the books of accounts, a fair and honest estimation of income is required to be deduced. The Hon'ble Rajasthan High Court in the case of CIT Vs. Amrapali Jewels Pvt. Ltd. 65 DTR 196 has held that it is the discretion of the ....
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....IT vs. Bhadani Financiers P Ltd (2021) 5 NYPCTR 771 (Delhi)  CIT vs. Deepak Kumar Agarwal (2017) 299 CTR (Bom) 62  CIT vs. SKS Ispat Power Ltd. (2017) 398 ITR 584 (Bom)  Jai Steel vs. ACCIT (2013) 259 CTR (Raj) As regards the merits the ld. AR of the assessee submitted that the addition was made on the basis of seized document at page 5 of Exhibit 7. This addition was also made in A.Y. 2011-12, in which the same was deleted, and the ITAT also approved such deletion. One document was found which contained actual figures of some years, and on the basis of the same, projected figures were also mentioned. This was just a projection. This does not even contain any name of details to which it belongs. The seized documents also contains projections and project report. The ld. CIT (A) allowed part relief in this ground and held that gross receipts cannot be taxed and only Average Gross Profit of last 3 years to be applied on suppression of receipts. There is no suppression of any receipts as such is proved and therefore even addition for Gross Profit as held by ld. CIT (A) is not justified and the entire addition may kindly be deleted. ....
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....s, merely these one page cannot ignored the systematised records maintained by the assessee for the patient and thereby recording of the receipts. The receipts for all the patients are duly recorded and there is no contrary finding of maintenance of records of the patient by the assessee. The recording of figure like 1.02E+08 suggests that there is progressive formula based estimate for the subsequent two years. The revenue did not bring any records to justify the addition before us except that the receipts are more in the two years. Whereas the records of the patient and arguments of the assessee that based on the past two years performance projection of two years were made cannot be denied and the same is support the fact that past two years data exactly tallied with the records. The revenue merely argued that the document found from the assessee the assessee has to justify the revenue receipt recorded. The arguments of the revenue has no support whereas the assessee justifies the arguments submitting that since the assessee opened up two more branch and being corporate assessee prepared projection as guideline based on the actual performance of last two year has force. During th....
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.... The question involved in the present set of appeals and review petition is answered accordingly in terms of CA No. 6580/2021 Etc. Page 56 of 59 www.taxmann.com the above and the appeals and review petition preferred by the Revenue are hereby dismissed. No costs. 5.6 Since, there is no finding in the order of the lower authority as to why the page based on which the addition is made is in the nature of incriminating material and in the absence of clear explanations of the assessee that the impugned page show the figure for the year under consideration is the estimate based on the past two year actual and against this explanation revenue failed to justify the addition. Based on the said explanation of the assessee we are of the considered view that since the page is not in the nature of incriminating material addition cannot be made considering the decision of the apex court in the case of Abhisar Buildwell (Supra). In the light of the discussion so recorded we allow ground no. 1 raised by the assessee. In the result the appeal filed by the assessee in ITA no. 139/Jodh/2022 is allowed. ITA NO. 140/Jodh/2022 6. The ground no. 1 raised in ITA No. 140/Jodh/2022 is si....
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....ally fixed on the basis of which the patients are being charged and the fact that the visiting charges of each doctor and the charges of the hospital are also fixed, I find that the Ld. AR of the appellant has neither filed any agreement with these doctors nor any other cogent evidence to justify his claim, more so, when these charges were fixed. Here it is pertinent to mention that on perusal of the sample cash vouchers produced by the Ld. AR of the appellant in relation to the anaesthesia charges, it is observed that different amounts were written on these vouchers. Therefore, the contention of the appellant that fixed charges are paid to these doctors is contrary to the facts available on record. In view of the above facts, these cash payment vouchers appear to be self-serving documents, the credibility of which is not ascertainable in absence of cogent documentary evidences as the same have not been produced by the appellant in favour of his contention. The fact also remains that the TDS was not deducted on such payments and the Managing Director of M/s Mewar Hospital Pvt. Ltd. has himself offered an amount of Rs. 4,67,100/- to be disallowed in F.Y. 2017-18 relevant to A.Y....
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....s observed that these vouchers are prepared by the same person and are stereotype and do not contain any signature of the recipient. No corroborative evidence has been filed by the appellant to justify his claim of payment of these charges in cash. I find that the Ld. AR of the appellant has neither filed any details with reference to these expenses nor any other cogent evidence to justify his claim. In view of the above facts, these cash payment vouchers appear to be self-serving documents, the credibility of which is not ascertainable in absence of cogent documentary evidences as the same have not been produced by the appellant in favour of his contention. Therefore, the expenditure of Rs. 35,79,859/- disallowed by the AO is confirmed and the Ground of Appeal No. 4 is accordingly treated as dismissed." 7.2 On the issue the bench noted that the year under consideration is completed assessment. An addition is made on the expenditure which are de hors the seized material and part of regular books of account of the assessee company. No where it is stated by the assessee that the expenditure is not genuine. As held by the bench in ground no. 1 that no addition can be made....
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....e and bench does not feel to repeat the related facts and findings. Based on these observations the appeal filed by the assessee in ITA No. 142/Jodh/2022 is allowed. ITA NO. 143/Jodh/2022 9. Apropos to the ground no. 1 the bench observed that the assessment year under consideration is A.Y. 2017-18. The assessee has filed the return of income for the year on 28.08.2017 and as on the date of search time limit to issue the notice u/s. 143(2) was not expired and therefore, ground no. 1 raised by the assessee challenging the validity of the assessment is not sustainable and thus, the ground no. 1 is dismissed. 9.1 As regards the ground no. 2.1, the assessee has challenged the addition of Rs. 6,77,848/- made on account of commission payment to various persons in the course of business or profession in which the assessee is engaged. Apropos to this issue the finding of the ld. CIT (A) is as under : "(vi) I have considered the arguments of the Ld. AR and the assessment order passed by the AO. It is observed that the appellant has not been able to prove the identity of the persons receiving the commission payment either before the AO or before me since no cogent ....
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.... not in dispute. Only on the basis of statements recorded during search the addition made. Even in the statement it was clarified that the expenses are being incurred and the purpose was also explained. Based on those arguments the ld. AR of the assessee supported the claim of expenses. 9.3 On the other hand the ld. DR relied upon the finding of the lower authority and supported the finding recorded therein. 9.4 We have heard the rival contentions and perused the material placed on record. The ld. AO in the assessment proceedings based on the records in the form of voucher found that the records maintained by the assessee unsatisfactory and the assessee failed to prove the genuineness of the expenditure. The ld. AO also noted that the commission made to medical professional or related parties to soliciting patients is inadmissible expenditure. The director in the statement offered to disallow the expenditure. On the other hand, we found that the ld. CIT (A) confirmed the finding of the ld. AO. Whereas the ld. AR of the assessee submitted that the commission payment is being made to certain drivers and other persons who bring patients to the hospital from the accident site so ....
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.... expenses claimed by the appellant but has only disallowed the cash payment of more than Rs. 20,000/- upon which there was no deduction of any TDS and therefore, these payments of Rs. 6,45,300/- were disallowed as per provisions of section 40(a)(ia) and 40A(3) of IT Act, 1961 during the year under consideration. (v) For the sake of clarity, Section 40(a)(in) of the Act is reproduced as under: "Section 40. Notwithstanding anything to the contrary in Sections 30 to 38, the following amounts shall not be deducted in computing the income chargeable under the head "Profit and gains of business or profession" (a) in the case of any assessee-A) any interest, commission or brokerage, fees for professional series or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply of labour for carrying out any work), on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid during the previous year, or in the subsequent year before the expiry of the time prescribed under sub-section (1) of Se....
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....s not deduct, or does not pay, or after so deducting fails to pay, the whole or any part of the tar, as required by or under this Act, then, such person, shall without prejudice to any other consequences which he may incur, be deemed to be an assessee default in respect of such tax : Provided that any person, including the principal officer of a company, who fads to deduct the whole or any part of the ice instance with the pros of this Chapter on the mum pat to a resident or on the sum credited to the account of a resident shall not be deemed to be an assessee in default in respect of such tax if such resident- (i) has furnished his return of income under Section 139; (ii) has taken into account such sum for computing income in such return of income; and (ii) has paid the tax due on the income declared by him in such return of income, and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed: (ix) However, in the instant case of the appellant, no such certificate from the accountant was furnished by the appellant either before the AO or before me in the appellate proceedings. Therefore, th....
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....he collection from patients for surgery carried out by a group of doctors is in fiduciary capacity and is being paid to them as an agent of the patient. TDS is only one mode of recovery, and even if the same is not deducted the payee has to pay his tax on his income. Where tax is paid directly by payee the assessee cannot be held even assessee in default. Reliance is placed on Hindustan Coco Cola Beverages P. Ltd. vs. CIT 293 ITR (SC) 226. Section 40 starts with non obstante clause and refers to only section 30 to 38. The deduction of these expenses is under section 28 only where the income is to be taken. Application of section 40 will be only to expenses covered u/s 30 to 38. Based on that submission the ld. AR of the assessee prayed to delete the disallowance. 9.7 On the other hand ld. DR relied upon the detailed finding recorded in the order of the lower authorities. 9.8 We have heard the rival contentions and pursued the material placed on record. The bench noted that the apple of discord in making the addition of Rs. 6,45,300/- in this case is that the assessee has paid the payment in cash to the doctor who are experts in giving Anesthesia. The assessee expert doct....
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....the ground no. 4 raised by the assessee the relevant finding of the ld. CIT (A) is reproduced here in below : "(iv) I have considered the facts of the case and the submissions of the appellant and it is observed that there is no dispute in the amount of payment made to third parties by the appellant company. It is also observed that the Ld. AR of the appellant has not been able to produce any cogent documentary evidence as regards to his contention that these payments have been made to the close relatives of the said doctors. Infact the Ld. AR of the appellant has also not been able to justify even the purpose of payment to these third parties. Once a claim of deduction has been made by the appellant company then the burden of proving the same lies on it which has not been discharged. No proof of TDS on such payments could be provided by the appellant either before the AO or before me to prove his contention. (v) Further during the search proceedings, the issue of payment to third parties was confronted to Sh. Manish Chhaparwal, M.D. of Mewar Hospital Pvt. Ltd., who, it is observed did not raise any objection on this aspect as referred above by the AO. In view of ....
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....sment years 2016-17, 2017-18 and 2018-19 in ITA No. 167,168 & 169/Jodh/2022. In all three appeals ground no 1 is general in nature and no specific arguments were raised. Therefore, on the said ground no 1 no adjudication is required. 12. Ground no. 2 raised by the revenue in all the three years is relating to the deletion of addition made on account of discount allowed on the bills of patient for treatment. Since issue is similar in all three appeals of the revenue, the Bench decided to deal with the ground No. 2 as common for all these years. For discussing the facts relating the addition and finding of the lower authority is taken up from the folder in ITA No. 167/Jodh/2022. 12.1 The fact related to the dispute is that the ld. Assessing Officer noted that during the search action u/s 132 of the Act, some bills related to the treatment of the patient were found. In those bills, discount on billed amount allowed by the hospital in favor of the patients. Excel Sheets regarding bill payment containing discount amount (concession amount) were also found and seized and made annexure as Exhibit 41, 42, and 43 of Annexure-AS. On verification on phone by the search te....
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....ounting to Rs. 1,71,15,498/-. On that basis, details of discount were calculated by the AO on the basis of turnover for various years including the current year under consideration. (ii) The claim of the assessee that the discount was calculated only on estimate basis and infact no discount has been claimed by the assessee during the year in audited accounts and the fact that a few persons admitted that discount was allowed was not found acceptable by the AO. The AO observed that at the time of search, evidences of discount amount on the bills were found and seized for FY 2016-17 and 2017-18 relevant to A.Y. 2017-18 and 2018-19. It was also observed by the AO that the assessee has shown discount expenses in his Profit & Loss Account statement separately in the AY 2017-18 & 2018-19 only and that in the earlier years, no separate discount expenses were claimed. In view of the above, the AO held that in earlier years, the gross receipts shown by the assessee were net off of discount but when search team found direct evidences for discount for AY 2017-18 & 2018-19, the assessee changed his accounting practice by showing gross receipts including the s called discount and c....
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....st approved by such agencies. The assessee had submitted details of all the bills, account statement and giving the justification of the discount given. There is no other material to suggest any such discount which is not genuine. (vi) I have considered the arguments of the Ld. AR and the relevant findings of the Hon'ble ITAT in the case of the appellant for the AY 2011- 12, wherein the issue of discount has been dealt which is based on the findings and the seized documents found during the course of search in the case of the appellant. The relevant findings of the Hon'ble ITAT are reproduced as under:- "8. We also observed that there is no claim of discount as such, and the addition was based on estimated discounts. In case there is no claim of such discounts the question of disallowance of any addition is uncalled for. There is no case of suppression of receipts by showing lesser receipts. Further if the receipts are shown net of discount the same cannot be said to be not verifiable as the same is directly linked to the corresponding receipts. The addition being made only on the basis of suspicion, therefore, we direct to delete the same." (vii)....
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.....60.28.120/- is deleted and the Ground of Appeal No. 2 is treated as allowed." 12.3 Feeling dissatisfied with the order of the ld. CIT(A), revenue challenged the findings of the ld. CIT (A) in ground No. 2. In support of the ground so raised the ld. DR heavily relied upon the findings of the ld. Assessing Officer recorded in the order of assessment. The ld. DR also submitted that the addition has been made considering wrong claim and for that verification on test check was carried out by the ld. AO of the bills upon which the claim of discount was made. The result of the test check was not satisfactory. Therefore, the claim of the assessee rightly disbelieved. The fact in the earlier year the assessee was showing the receipt net (Reducing discount from gross). Whereas in this year the assessee has separately claimed, such expenditure so the fact of previous year which that of these years are different. Even the finding of the ITAT related to the showing income of net of discount. Therefore, the relief granted by the ld. CIT(A), considering the judgments of the Bench in assessment year 2011-12 is wrongly applied on facts in the year under consideration. In the year unde....
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....he expenditure claimed cannot be disallowed. The claim is supported by the bill, treatment taken and various aspect of the scheme framed by the assessee the same is given to the patient. Therefore, the claim is duly supported by the regular books of account and there is no such incriminating documents found in relation to the claim of expenditure. Hence in the search related assessment except the issue related to incriminating material no other issue can be taken up. The ld. AR of the assessee placed reliance on the following decision:- * Hindustan Coca Cola Beverages P. Ltd. vs. CIT (2018) 402 ITR 539. * CIT vs. Devayhi Beverages Ltd. (2008) 296 ITR 41 (Del) 12.5 We have heard the rival contention, perused the material available on record and gone through the judgment relied upon by both the parties to drive home to their respective contentions advanced before us. The Bench noted that the assessee is a corporate serving the medical services and health related to services to the patient at various locations. The assessee is an approved hospital for various treatment under the medical insurance coverage and also undertake treatment on various scheme of governmen....
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....cannot be said to be not verifiable as the same is directly linked to the corresponding receipts. The addition being made only on the basis of suspicion, therefore, we direct to delete the same." Thus, considering that fact that the assessee has given discount to the patient based on the treatment, duration of treatment of patient, the scheme of the various treatment adopted by the assessee. All these receipts are duly accounted in the books of account. The respective services bills raised by the assessee is not under dispute and thus, there is no reason to disbelieve the related discount expenses claimed by the assessee based on the systematic approach as per corporate scheme of the assessee given to the patient from whom receipt is already accounted. The bench noted that in the case of the assessee's own case the bench noted that the following observations of the bench "There is no case of suppression of receipts by showing lesser receipts. Further if the receipts are shown net of discount the same cannot be said to be not verifiable as the same is directly linked to the corresponding receipts. The addition being made only on the basis of suspicion, therefore, we dire....
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....that finding, the ld. AO made an addition of Rs. 33,02,385/- as suppression of receipts by the assessee. 13.1 Aggrieved from the order of the Assessing Officer, assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT (A) is reiterated here in below:- "6.2 I have considered the facts of the case and written submissions of the 2 appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- (i) The AO observed that during the course of search action in the case of the appellant, day-to-day X-ray register was found and seized as Exhibit-4 of Annexure-AS wherein details of X-rays done during the period of 4 months from October 2016 to January 2017 were noted. On perusal of the details of total X-rays done during the period worked out to 3839, including IPD & OPD, whereas on perusal of the register produced by the X-ray department of the hospital, the AO observed that the total %- ray films used during the period worked out to 4530. Accordingly, the AD opined ....
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.... the contention of the assessee is that the entire basis for addition was not justified. Based on the X-rays done during the 4 months period from October, 2016 to January, 2017, cannot be any basis for the addition in the year. Even various factors of wastages had not been considered, error of technician, package charges, scheme charges etc. has not been considered. Sometimes films are wasted due to calibration & technical issues and even repeat X-Rays are done, if the same is not done properly. The assessee also relied upon some judicial decisions in support that the estimated addition cannot be made. 5. We also observe that the addition is not based upon any material or evidence for the year under consideration and even during search nothing has been found related to the year. There is no basis for estimation of suppression of X-Rays. Even the technician during the search proceedings had stated that in every bundle certain X-Rays gets damaged, and further there are various other reasons by which X-Rays films can get damaged. There is no allegation that some X-Rays having been done, and there is no receipts issued or there is any suppression of receipts. Therefore, in vie....
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....ssibility of human probability decided by the apex court in the case of Sumati Dayal vs. CIT (1995) 214 ITR 801 shall squarely covered the case of the assessee. The ld. DR submitted the detailed finding of the ld. AO recorded in the assessment order be confirmed. The ld. DR also submitted that the addition has been made based on the details submitted by the assessee and the same is not disputed. The ld. AO has also considered the damage receipts and at the same tiem assessee did not provide the details to support the damage receipt claim. Thus, the addition made by the AO is based on the detailed investigations of the records and the suppression of receipt estimated by the ld AO is purely based on the data submitted by the assessee. Therefore, the ld. DR prayed to sustained the addition. 13.3 On the other hand, the ld. AR appearing on behalf of the assessee supported the order of the ld. CIT (A) which based on decision of ITAT in assessee's own case where in the similar addition was deleted by the Coordinate Bench in assessment year 2011-12. The fact of that year and the year under consideration being similar the judicial consistency should followed in this year also. The additi....
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.... well below the industry norm Please note that all the medical equipments in hospitals are daily required to be calibrated in order to check their standard output accuracy. Such exercise is done daily morning at all centers. g. Your goodself had obtained a copy of x-ray films revenue for last 9 months and also taken evidences of x-ray technician Jayant Dhariwal & reflected 18% revenue suppression based on the films consumed & the closing stock. Please note that for the above period after verifying our records we found 1006 patients from Government Scheme (BSBY/ESIC/Rajasthan Servants) which were counted for x-ray film consumption but no bill was produced from the system as it is a part of package given by the Govt./ESIC/BSBY. Please find the policy attached as annexure 18. h. We are also attaching sample bills for the same period to substantiate our above point at annexure 19. i. The total number of patients which are from the excluded list and were still consuming x-ray films & not a part of receipt is attached at annexure 20. On an average every patient undergoes 3-4 x-rays during common orthopedic procedure, whereas in trauma this can go up to 15-16 x-....
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....ences the addition made purely on the said information of consumption of X-ray sheet is not sustainable. The Similar view is taken in this case of the assessee by the Coordinate Bench in the assessment year 2011-12 and the relevant observation on this issue is reiterated here in below:- "3. Ground No. 3 of the appeal relates to part addition sustained on account of X-Ray receipts. We have heard the rival contentions and carefully gone through the orders of the authorities below and found from the record that the AO made addition for Rs. 3,87,730/- which was sustained at Rs. 3,12,338/- and relief was allowed at Rs. 75,392/- by the ld. CIT(A). The AO observed that during the course of search, X-ray done during the period of 4 months from October, 2016 to January, 2017 it was found that X-Ray receipts were for 3839 whereas X-Ray consumed was 4530, and as such there was excess consumption of 691 films. On these hypothesis it was observed that Xrays receipt in total was 3.87%. On these facts for the search year for financial year 2017-18 suppression of receipts was estimated at Rs. 3,87,7301-. The CIT (A) allowed deduction for 3% on account of wastages ....
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....there is no fault in the detailed finding of the ld. CIT(A). Based on these observations ground No. 3 raised by the Revenue is dismissed in ITA no. 167/Jodh/2022. 14. The revenue has taken similar ground no 3 in ITA No. 168 & 169/Jodh/2022 as that in ITA no. 167/Jodh/2022. Therefore, bench feels that it is not imperative to repeat facts, grounds and finding of the bench again in ITA no. 168 & 169/Jodh/2022 and the decision taken by the bench in ITA no. 167/Jodh/2002 shall apply mutatis mutandis in the appeal of the Revenue in ITA No. 168 & 169/Jodh/2022 being on the similar facts and grounds of the case (supra). In the light of these facts ground no. 3 of the revenue taken in ITA No. 168 & 169/Jodh/2022 shall stands dismissed. 15. In ground No. 4 raised by the Revenue in ITA No. 168/Jodh/2022 is on account of alleged unaccounted cash deposit during demonetization period for an amount of Rs. 1,84,36,500/-. The fact related to this addition emerges from the assessment order is that in the assessment proceedings the ld. AO noted that the assessee company has deposited cash of Rs. 1,84,36,500/- in Axis Bank in A/C No. 912020060853932 d....
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....iable evidence. Based on these observation the ld. AO made an addition of Rs. 1,84,36,500/- as unaccounted of cash in the income of the assessee. 15.1 Aggrieved with the above addition, the assessee preferred an appeal before the ld. CIT (A) and on this issue the relevant findings of the ld. CIT (A) is reiterated here in below:- "9.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- (i) The brief facts related to the issue are that during the search action u/s 132 of the Act, on perusal of cash book, it was found that cash balance as on 08.11.2016 was at Rs. 61,80,111/- whereas the assessee company has deposited cash of Rs. 1,84,36,500/- in Axis Bank during the period 10.11.2016 to 30.12.2016. It was further observed that 6113 number of notes of 1000 denomination notes amounting to Rs. 61,13,000/- and 24647 number of notes of 500 denomination notes amounting to Rs. 1,23,23,500/- totaling to Rs. 1,84,36,500/- wer....
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....2015-16 FY 2016-17 Cash Sales 453.7 mn 428.6 mn Cash deposited 384.4mn 388.9mn Cash used for business 69.2mn 39.7mn Thus, on analysis of the above chart, I find that the cash sales during the demonetized period vis-à-vis cash sales in the earlier year has rather decreased in the year under consideration. Further, though the cash deposited during the demonetization period is slightly higher than the previous year, but it cannot be considered as being exceptionally high to be alarming. Lastly, the cash used for business has also decreased during the year under consideration when compared to the previous year. Accordingly, the contention of the AO that these cash sales are not real sales and the assessee has tried to introduce his own unaccounted money in the garb of cash sales does not appear to be justified. (xv) Further, I find that the assessee has furnished complete details of the patients alongwith their complete identity in the form of PAN and Aadhar Card. The assessee has also submitted the Circular issued by the Government of India to the AO wherein the Pharmacies were allowed to accept the specified bank notes upto 24.11....
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....ount. Infact the AO did not even reject the books of accounts of the appellant under the provision of section 145(3) of the Act. (ix) Thus the Ld. AO has not brought any material on record to establish that the cash deposited in the bank in demonetized currency was unexplained. I find that merely giving some finding that no confirmation of such patients was furnished by the appellant is not alone sufficient to justify the addition. There cannot be any reason for disbelieving the genuineness of the cash received from the patients by the appellant on the above reason. Further, I also find that cash receipts in the year under consideration is not of abnormal amount and is found to be commensurate with the past trends. I am of the view that the initial burden cast on the appellant is discharged and therefore it cannot be disputed that the appellant does not have all the necessary documents to prove the genuineness of cash deposits, and therefore, the income so assessed is not tenable in the eyes of law. (x) In view of the facts of the case, it is evident that the appellant has duly substantiated its claim from the documentary evidence and also with the facts which are....
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.... double taxation one as receipt and other uncounted receipt. The ld. AO failed to appreciate that aspect of the case. The ld. AR of the assessee thus relied on the reasoning given before the AO as well as the finding of the ld. CIT (A) and detailed submission given before the lower authorities. The ld. AR summarily submitted that the cash receipts accounted during the demonetization period if compared to earlier year and the cash used in business decrease compared to last year. There are no observation of the ld. AO that the assessee has deposited the cash without placing on the record the relevant records and cash deposited is duly supported by the evidences. There are no observation of the high ratio of profit thereby it can be presumed that the cash deposited by the assessee is unaccounted cash. There is no defect pointed out in the records and books produced by the assessee. The cash receipts accounted in the books is not under disputed then double addition cannot be made. The details relating to the treatment given read with the identity proof of the patients were submitted. Even the bills for pharmacy raised were also submitted that it is not under dispute that the assessee r....
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.... of the facts we are of the considered view that the amount deposited in the bank account though SBNs addition cannot be sustained also from the record that the books of account of the assessee are maintained and audited in the regular course of profession and in the absence of any default on this books addition is not sustainable. The Bench also noted that the ld. AO did not bring on record any concrete and conclusive evidence of back dating of entries of cash receipts or bogus receipt and not disclosing of the identity and treatment so offered. The Bench also noted that the books of account are regularly audited under the Company Act under the Income Tax Act. There is no adverse observation in the audit report and this audited of books of account had not been rejected u/s 145(3) of the Act. Therefore, we hold that the assessee has already discharged this burden and proved in the cash deposited in the bank account in the form of demonetization currency was received and explained the cash receipt for which the same has already been accepted by the Revenue while finalizing the assessment of books of account without mentioning any default and the assessment has been completed u/s 143....
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....ed to be related to Mewar Hospital Pvt. Ltd., by Sh. Manish Chhaparwal in his statement recorded during the course of search, against outsourcing of medical shop at Mandsaur Centre(M.P.). On this issue, an appropriate addition has been made by the AO in the case of Sh. Manish Chhaparwal on substantive basis and in order to protect the interest of revenue, addition to the extent of Rs. 15,00,000/- which was claimed to be related to Mewar Hospital Pvt. Ltd. has been made in the case of the assessee company. (ii) Before me, the Ld. AR of the assessee has contended that the addition so made is on protective basis only and this addition has been also made in the hands of the Director, Sh. Manish Chhaparwal and therefore, this addition may be deleted here. The assessee has also furnished his submissions on merit in the foregone paras. (iii) I have duly considered the submissions of the Ld. AR of the assessee and the facts available on record and it is observed that the assessee has not been able to explain the source of cash and has failed to reconcile it with the books of accounts. Further during the course of search, the branches of the hospital of the assessee g....
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....tice. 16.3 On the other hand, the ld. AR appearing on behalf of the assessee submitted that no such addition can be made and sustained on protective basis at this stage. Once the same has already been considered in the case of Shri Manish Chhaparwal by the ld. CIT (A) and there is no reason to sustain the addition on protective basis in the hands of the assessee so the action of the ld. CIT (A) in deleting the addition is purely on considering all aspects of the case in the hands of the assessee. Based on these argument ld. AR supported the order of the ld. CIT(A). 16.4 We have heard the rival contention and perused the material available on record. The Bench noted that the addition under dispute is made on account of cash seized at the residence of the assessee for an amount of Rs. 24,91,000/- out of that addition to the extent of Rs. 15,00,000/- was made in the case of the assessee on protective basis, considering the fact that Shri Manish Chhaparwal has claimed that it relates to the outsourcing of medical shop at Mandsair Centre (MP). Even though based on the explanation the same has been considered in the case of Shri Manish Chhaparwal as unexplained. To protec....