2020 (3) TMI 1476 - AT - Income Tax

Part addition sustained on account of X-Ray receipts - suppression of receipts - HELD THAT - 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 view of the above facts and circumstances of the case we find no merit in the addition sustained by the ld CIT(A) hence we direct the A.O. to delete the same. Addition for discounts - AO made addition on the ground that in the search year it was found that the appellant had claimed certain discounts which could not be verified - CIT(A) sustained disallowance @ 25% - HELD 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. Appeal of the assessee is allowed.

Summary

Issues involved:
1. Challenge to the order of Ld. CIT(A)-II, Udaipur for the assessment year 2011-12.

Analysis:
1. The appeal raised various grounds challenging the order of Ld. CIT(A)-II, Udaipur. Grounds 1 and 2 were not pressed during the hearing and were dismissed. Ground 3 related to the part addition sustained on account of X-Ray receipts. The AO made an addition of Rs. 3,87,730, which was reduced to Rs. 3,12,338 by CIT(A), granting relief of Rs. 75,392. The appellant argued that the entire basis for the addition was unjustified, citing factors like wastages, errors, and judicial decisions supporting their stance.

2. The Tribunal found that the addition lacked a proper basis for the year under consideration, as no material or evidence was presented. The estimation of suppression of X-Rays was deemed unsubstantiated, with no allegations of receipts suppression. The Tribunal directed the AO to delete the sustained addition of Rs. 3,12,338.

3. The next issue concerned the addition for discounts. The AO added Rs. 18,81,845 for discounts, partially upheld by CIT(A) at Rs. 4,70,461. The AO's rationale was that claimed discounts were unverifiable, estimated based on the search findings. However, the Tribunal noted that no discount claims were made during the year, and the addition was solely based on estimations.

4. The Tribunal observed that the absence of discount claims rendered the addition unjustified. The addition was made on suspicion alone, without evidence of receipts suppression. As discounts were linked to corresponding receipts, the Tribunal directed the deletion of the addition. Consequently, the appeal of the assessee was allowed, with the order pronounced on 20/03/2020.