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TMI Blog2020 (1) TMI 604X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee but without any other corroborative and substantive evidence. At the same time, as we have already observed that both the documents as relied on by the authorities below, contains mentioning of payment of ₹ 70 lakhs but it has been stated therein that ₹ 70 lakhs has been paid afterwards and there is no positive evidence or material to establish that on which date or by whom this payment was made by the assessee or on behalf of the assessee to the seller (IPSAR). Therefore, in absence of such substantive evidence, we are compelled to hold that there was no over and above payment of ₹ 70 lakhs by the assessee to the seller. In this situation, when Dr. J.K.Mishra, Director of IPSAR (seller) in his statement before the AO categorically denied having received the amount of ₹ 70 lakhs over and above and there is no action against the seller by the department in this regard disbelieving his statement, thus, the socalled receivable of over and above money is denied having received the impugned amount. Hence, the action of AO loses its legs to stand on the platform of justified and reasonable cause for making addition. We have no hesitation t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012-2013 14.07.2017 153A 11.03.2019 4. 39/CTK/19 M/s Cuttack Hospital Pvt. Ltd. 2013-2014 14.07.2017 153A 11.03.2019 5. 40/CTK/19 M/s Cuttack Hospital Pvt. Ltd. 2014-2015 14.07.2017 153A 11.03.2019 6. 41/CTK/19 M/s Cuttack Hospital Pvt. Ltd. 2015-2016 14.07.2017 153A 11.03.2019 7. 42/CTK/19 M/s Cuttack Hospital Pvt. Ltd. 2016-2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rent Salary Total (In Rs.) Addition Made (In Rs.) 2010-11 7,80,000 0 7,80,000 5,46,000 2011-12 8,22,000 13,68,000 21,90,000 15,33,000 2012-13 1,08,000 1,98,000 3,06,000 2,14,200 2013-14 1,57,500 2,70,000 4,27,500 2,99,250 2015-16 19,20,000 11,34,000 30,54,000 21,37,800 2016-17 11,46,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,800 9,16,200 12,21,600 2016-17 32,43,600 22,70,600 9,73,080 12,97,5201 Total 1,00,01,100 70,00,850 30,00,330 40,00,520 For the assessment year 2014-2015, the CIT(A) partly deleted the addition made by the AO on the total expenditure claimed by the assessee after restricting to 30% and confirmed the addition made by the AO on account of unexplained investment. 6. Now, against the above order of CIT(A), the assessee is in further appeals before the Tribunal for the respective assessment years under consideration. 7. At the outset, ld. AR of the assessee submitted that the assessee does not want to press legal ground challenging the addition made by the AO and partly confirmed by the CIT(A) on the ground that the additions have been made in absence of any incriminating material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see, the adhoc addition of 30% cannot be held as justified and reasonable. Alternatively, the assessee concluded his argument with a prayer that if it is found necessary then the percentage of adhoc disallowance and addition may kindly be reduced in the interest of justice to 5 to 10%. 11. Replying to the above, ld. Departmental Representative (DR) took us through the relevant part of the assessment and first appellate order and submitted that the ld. CIT(A) has already granted relief to the assessee by reducing to the addition from 100% to 30% and no further reduction in the addition should be granted. Ld. CITDR also submitted that despite opportunity was given by the lower authorities the assessee failed to submit relevant documentary evidence, bills and vouchers in support of his claim of incurring of expenditure and payment of rent towards operating information centers, therefore, the addition confirmed by the CIT(A) may kindly be upheld. Lastly, in all fairness, ld. CITDR submitted that if it is found just and proper then the addition, partly confirmed by the CIT(A) @30% of the total claim, may be reduced to 25%. 12. On careful consideration o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tablished for the purpose of business of the assessee to secure high number of patients from remote areas by way of guiding them and facilitating them to reach Cuttack for treatment and getting benefited from the information given by these centers to the patients located at remote, rural and semi-urban areas. The authorities below have not doubted this fact that the assessee established information centers in the rented premises and also deployed therein. Therefore, incurring of expenditure towards payment of rent and salary to the employees is obvious and this was for the purpose of business of the assessee. The main allegation of the AO is that the assessee could not produce any documentary evidence in support of his claim and could not satisfactorily explained for non-production of the same. In this regard, we are in agreement with the contention of the ld. counsel of the assessee that since the payment was made at the centers located at various seventeen locations and after payment, respective documents, evidence, bills and vouchers were to be sent to the assessee s centrally located accounts office for record and due to miscommunication between the information centers and cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded on oath of Dr.J.K.Mishra owner/director of IPSAR wherein he denied having receipt of amount of ₹ 70 lakhs from the assessee towards sale of land and building from IPSAR. Ld. Counsel of the assessee strenuously contended that the first appellate authority has wrongly shifted the onus on the assessee company to disprove the negative that the assessee has not paid amount of ₹ 70 lakhs. The assessee cannot be compelled to prove the negative fact after the stand of the purchaser Shri J.K.Mishra, that if the onus was shifted to the AO to prove that the assessee has paid ₹ 70 lakhs over and above the amount stated in the registered sale deed. 16. Ld.Counsel further submitted that the document (seized material indexing No.AH-55) was seized from the custody of Chief Financial Officer Mr. Rajendra Kumar Sahoo (FCA) and the statement of Mr. Sahoo was recorded by the Investigating Officer, who had categorically denied regarding alleged payment of ₹ 70 lakhs to Dr. J.K.Mishra (seller) and the said aspect has also been re-affirmed by Shri Subrat Kumar Jena, the director of the assessee and his statement was also recorded by the same Investigating Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. CIT(A) based on the remand report without any interpretation of facts and circumstances and without expressing his independent view point is not sustainable in the eyes of law. 18. It was also vehemently contended by the ld. Counsel that the fact of incurring expenditure on renovation cannot be disputed by the authorities below on the basis of sham and meaningless documents. Ld. counsel further submitted that in paragraph 4.3 of the first appellate order, the CIT(A) has mis-directed himself while sustaining the addition as in the seized material AH-55 as reflected, in the order of the assessment nowhere the facts and figures have been mentioned which have been brought in para 4.3 by the CIT(A) to tilt the case in favour of the Revenue. 19. Ld. Counsel of the assessee further submitted that the addition has been based on two documents i.e.(i) AH-55 which was extract of mail received from Shri Rajendra Kumar Sahoo, the Chief Financial Officer to Dr. Mishra (IPSAR) and (ii) page 38, which is a handwritten noting on dairy. Ld. Counsel submitted that in these documents no specific date of payment of ₹ 70 lakhs has been written and it has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was also the contention of ld. DR that if it is assumed that ₹ 70 lakhs is the part of ₹ 4.95 crore which was withheld by the assessee and the same was spent in cash, then also the total amount should have been paid by the cheque/DD to the vendor should have been ₹ 4.25 crore(4.95 crore - 0.70 crore). The fact that the payment to the vendor is ₹ 4.95 crore by cheque/DD clearly proves beyond doubt that the total transaction on record was ₹ 4.95 crore and ₹ 70 lakhs was additionally paid in cash over and above the consideration mentioned in the registered sale deed, which is evident from the incriminating material found during the course of search. Ld. DR further submitted that the mail sent by the CFO of the assessee Shri R.K.Sahoo confirmed the total payment of 5.65 crores which includes ₹ 70 lakhs in cash and, therefore, in the said mail he insisted for refund of excess payment of ₹ 94,750/- and this again supports factum of payment of ₹ 70 lakhs towards purchase of land and building. Ld. DR submitted that the second incriminating material i.e the noting in the diary (page 38 of the Anenxure-AH-23) seized from the office bea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her pointed out that in absence of any specific date and mode of payment of ₹ 70 lakhs, the addition on allegation of unexplained investment cannot be sustained against the assessee. Ld. Counsel also submitted that the AO has allowed depreciation on the total cost of renovated building which includes amount of ₹ 70 lakhs. Therefore, if any further addition is made on the allegation of unexplained expenditure that would amount to double taxation, hence, in the interest of justice, the addition made by the AO and confirmed by the CIT(A) may kindly be deleted. 24. On careful consideration of the above rival submissions, first of all, we observe that the main basis for making and confirming the addition is two documents viz. (i) AH-55, which is an email from CFO Shri R.K.Sahoo of assessee to Dr. J.K.Mishra of IPSAR, ,the seller, which was extracted from the computer of CFO of the assessee; and (ii) hand written noting on page no.38 of a diary seized during the course of search. In both these documents amount of ₹ 70 lakhs has been written with a specific mentioning that ₹ 70,00,000/- has been paid afterwards . In both documents there is no ment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atement that ₹ 70,00,000/- was withheld by the appellant company . It is not the case of the assessee that there was any mutual agreement between the assessee and the seller regarding withholding of ₹ 70,00,000/-. Obviously, if the amount of sale consideration would have been determined including ₹ 70 lakhs then such kind of expectation of the first appellate authority could have been satisfied by way of MOU or any other written agreement but when at the time of making agreement to sale the amount of sale consideration was determined between the parties at ₹ 4.95 crores, there was no need of any other agreement or MOU that the purchaser has withheld amount of ₹ 70 lakhs out of the sale consideration. The AO has not taken any action against the seller by way of any mode or procedure provided in the Act and show-causing him as to why the amount of ₹ 70 lakhs should not be treated as unexplained income while determining the capital gain accrued to him on sale of land and building to the assessee then the AO cannot made any addition in the hands of the assessee only on the basis of two documents, which does not reveal any date and mode of payment, as ..... 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