9911796707
TMI Blog2023 (10) TMI 1427X X X X Extracts X X X X X X X X Extracts X X X X ..... he actual performance of last two year has force. During the search revenue did not find from that the records of the patient maintained and consequent there upon no receipt is offered. Considering that aspect of the case we also see that even the CIT (A) erred in directing the AO to compute the profit rate when the revenue clearly fails to justify that the impugned figure recorded on the loose paper is not an estimate but actual receipt of the assessee. Based on these observations the ground no. 2 raised by the assessee is allowed. Assessment u/s 153A - Incriminating material found during search or not? - HELD THAT:- 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 [ 2023 (4) TMI 1056 - S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TDS default were decided in favour of the assessee for assessment year 2017-18. As revenue did not challenge those order where in the issue of TDS for the year under consideration has already been finalised and on the same very issue again no disallowance can be made. Based on that aspect of the case as the assessee has collected the money on behalf of someone else and there is no income on this aspect of the case. As regards the default of the assessee u/s. 40(a)(i) of the Act, the bench noted that as regards the TDS default the proceeding has already been completed and the revenue did not bring specific default, we see no reason to consider the disallowance on this aspect. Payments had been made to a third party on behalf of the doctors - as argued payments are towards services rendered, and even if they paid to third party these are expenses of the assessee and are allowable - HELD THAT:- As the assessee did not explain the nature and purpose to the satisfaction of the ld. AO he has made the addition of Rs. 64,900/-. The ld. CIT (A) also confirmed the finding of the AO. Before us the ld. AR of the assessee submitted that the payments had been made to a third party on behalf of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so chances that the film gets damaged also. Hence, the conspectus explanation granted by the assessee is to be considered and therefore, the consumption of the X-ray film with that of the overall billed amount no addition can be made. In the light of these fact and analysis of the various factual aspect of the case we respectfully the following decision of the Coordinate Bench in the case of the assessee for assessment year 2011-12 we do not find any force in the arguments of the Revenue and we are of the considered view that there is no fault in the detailed finding of the ld. CIT(A). Decided against revenue. Unaccounted cash deposit during demonetization period - Identity and the treatment given to the patient is duly recorded and there is no adverse observation on this in the regular books of account of the assessee. Revenue cannot tax twice the same receipts, as in the regular books of account this cash receipt is duly recorded as receipt. Based on these observations 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 au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the issue involved in all these appeals are related to the one assessee and the facts are almost similar related to the search assessment. Therefore, with the consent of both the parties the matter were heard together and are disposed with this common order. 2.1 The grounds of appeal 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 appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,200/- made by Ld. AO on account of anesthesia payment to consulting doctors, 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. 2.5 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red 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 circumstances of the case for the assessment year under consideration the Id. CIT (A) is justified in Law in deleting the addition of Rs. 1,71,15,498/- made on account of discount allowed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances 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 Group of Udaipur on 23.01.2018 and thereafter as per warrant of authorizations issued. Various assessee their various premises were covered in search and seizure action. Warrant of authorization containing name of the assessee was also executed. Consequent upon the search and seizure action, jurisdiction over these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame (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 accounts hence, the same may not have been considered by the auditors while preparing audit report as probably the same paper may not have been produced by the assessee before the auditors. Hence this argument is also not correct. It is very clear from the above discussion and material available on record that gross receipt appearing in the seize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 paper, gross revenue of FY 2008- 09 to FY 2011-12 is clearly mentioned out of which gross receipts of FY 2008-09 FY 2009-10 are tallied with the ITR but gross receipts of the FY 2010-11 FY 2011-12 does not tally with receipts shown in the ITR. It was held that in FY 2010-11 2011-12, there is suppression of gross revenue in ITR as compared to seized paper to the extent of Rs. 22,81,645/- and R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 - 22,81,646/- Total 5,59,63,834/- 10,38,94,812/- Whereas in the Total column in the seized document, the year-wise gross receipts are FY 2010-11 2011-12 Total receipts noted in seized document in (total Column) 5,82,45,480/- 1.02E+08 However, in the Total column in the seized document the year wise gross receipts are noted for the FY 2008-09 to 2011-12 and in respect of total receipts noted in the seized document in respect of FY 2011-12, the same is mentioned as 1.02E+08. (v) Since, in the seized documents i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. (viii) In the above context, reliance is placed on the judgment of the Hon'ble M/s Mewar Hospital Private Limited (viii) Gujarat High Court in the case of Commissioner Of Income-Tax vs. President ITA No. CITA Udaipur-2/18356/2019-20 Industries on 20 April, 1999 wherein it has been held as under:- The entire sales could not have been added as income of the assessee for the assessment year in question but only to the extent the estimated profits embedded in the sales for which the net profit rate was adopted entailing addition of income on the suppressed amount of sales. There is no material on the record to suggest that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 taxing authorities as to what should be the percentage of profit that should be applied and that the discretion should be exercised on settled practice. (xii) In view of these facts, after the rejection of books of accounts u/s 145, the income of the appellant is required to be estimated on best judgement basis. It is also a settled proposition that while estimating the income of the assessee, the average of past history of GP declared by the assessee is considered as a proper and reasonable basis for estimation of income. Accordingly, the AO is directed to work out the GP for the year by considering the average GP of last three years and after applying the same on the total turnover, the AO is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed 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. To support this view the ld. AR of the assessee placed reliance on following decisions: CIT vs. S.C .Kothari 82 ITR 794 (SC) CIT vs. M/s Shoorji Vallabhdas Co. 46 ITR 144 (SC) Poona Electric Supply Co. Ltd. vs. CIT 57 ITR 521 (SC) CIT vs. Balchand Ajit Kumar 263 ITR 610 (MP) ITO vs. Liyakat Ali 83 TTJ 769 (Jd) Balaji Textiles vs. ITO 49 ITD 177 (Bom) Acit vs. Rakesh M. Shah 86 TTJ (Mum) 288 5.3 On the other hand, the ld. DR supported the findings recorded in the orders of the lower authorities and prayed to sustain the addition to the extent confirmed by the ld. CIT(A). 5.4 We have heard the rival contentions, perused the material placed on record and also gone through the judicial precedent relied upon by both the parties to drive home to their respective contentions. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents 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 the search revenue did not find from that the records of the patient maintained and consequent there upon no receipt is offered. Considering that aspect of the case we also see that even the ld. CIT (A) erred in directing the ld. AO to compute the profit rate when the revenue clearly fails to justify that the impugned figure recorded on the loose paper is not an estimate but actual receipt of the assessee. Based on these observations the ground no. 2 raised by the assessee is allowed. 5.5 Apropos to the ground no. 1 the bench noted that as the year under consideration is completed assessment year and on account of the search the assessment was opened by issue of notice u/s. 153A of the Act, the addition de hors any material deserves to be deleted as held in the case of Principal Commissioner of Income Tax, Central-3 Vs. Abhisar Buildwell P. Ltd. The relevant finding of the apex court is reproduced here in below: 14. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 similar to the ground no. 1 raised by the assessee in ITA No. 139/Jodh/2022 and the decision taken by the bench in ITA no. 139/Jodh/2022 shall apply mutatis mutandis in ITA No. 140/Jodh/2022 as the facts and the issue being similar in nature and bench does not feel to repeat the related facts. Based on these observations the ground no. 1 raised by the assessee in ITA No. 140/Jodh/2022 is allowed. 6.1 In ground no. 2 the assessee has challenged the confirmation of addition of Rs. 2,93,000/- made by ld. AO and confirmed by the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT (A) is as under : (iii) I have considered the arguments of the Ld. AR and the assessment order passed by the AO, and it is observed that the AO has disallowed the anaesthesia payments made in cash upon which no TDS was deducted by the appellant. It is further observed that the AO has not disallowed the entire anaesthesia expenses claimed by the appellant but has only disallowed the cash expenses wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irector 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. 2018-19 out of the non-verifiable cash payments related to anaesthesia, and further, as the verifiability of these expenses could not be ascertained by the AO since the appellant failed to get verified the cash payments related to anaesthesia amounting to Rs. 2,93,000/- in AY. 2014-15, I am of the opinion that the anaesthesia charges amounting to Rs. 2,93,000/- pertaining to the year under consideration has been rightly disallowed by the AO. Accordingly, the addition of Rs. 2,93,000/- is confirmed and the Ground of appeal No. 4 is treated as dismissed. 6.2 On the issue the bench noted that the year under consideration is completed assessment. The addition is made on the expenditure which are de hors the seized material. 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 on the completed assessment without support of any incriminating material, the revenue has merely stated that the assessee has paid the cash to doctors and no TDS is made. In the search asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the bench in ground no. 1 that no addition can be made to the completed assessment without support of any incriminating material. The revenue has merely stated that the assessee has paid the cash, suffers from various infirmities. The ld. DR relied on the statement of the CFO based on these observation of the revenue who admitted for disallowance of the expenditure as the same are stereotype and some of them do not contain the signature. We find from the perusal of record on this observation the revenue not placed on record any corroborative material in the nature of incriminating so as to disbelieve the claim of expenditure which are maintained in the regular course of business of the assessee. Merely on some vouchers the signature are missing and paid cash, the book result cannot be disbelieved and in the search proceeding no such addition are called for. The bench also noted that the assessee is corporate entity, and the book of the entity audited under the income tax Act and under the companies act. There is no whisper of the auditor about the bogus claim of expenditure by the assessee. The book results were not rejected and the assessment has been order u/s. 143(3) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent evidence in this regard vis PAN or Aadhar details were filed by the assessee. Though mobile no. of such drivers was provided to the search team, however, when the details of such referral commission payments were cross checked by the search team from the drivers, it was denied by them. Further it is observed that the assessee does not maintain any documentary record in respect of these referral commission payments. These payments are made in cash and moreover no TDS is being made on them. Infact, on direct verification on the mobile nos. provided by the appellant during the search proceeding, these parties categorically denied having received any such payments from the hospital. It is observed that the assessee has neither been able to produce any cogent evidence or the party, as such, for verification before the AO or before me to justify his claim of payments. Further the fact remains that these referral payments amounting to Rs. 93,48,573/- for the AY 2017-18 and 2018-19 were offered for taxation by Sh. Manish Chhaparwal, M.D. as well as by Sh. Tejas Sanghvi, CFO of Mewar Hospital Pvt. Ltd. during the search proceeding. Thus, in totality of facts, I find that the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O is referring to give the commission for medical professionals. The expenditure is for reimbursement for the cost of transportation, conveyance, cleaning and other expenses plus there service charges. The assessee has already filed all the details of such payments, name and mobile number were duly submitted. Based on that information nothing adverse was found and to justify that the claim of the assessee is not correct. The deficiency in such a voucher itself says that the same has been maintained during the business of the assessee by the employees. The source of this expenditure is not under dispute. The related receipt from the patient on admission is not under dispute. Entries were duly found in the regular books. Only because of statements recorded during the search the addition cannot be made, the lower authorities failed to appreciate that even in the statement it was clarified that the expenses are being incurred and the same was justified in the statement. Looking to the nature of profession the assessee engaged it is normal practice to give such reimbursement or service charge. As regards the TDS the ld. AO failed to establish that the assessee has controverted the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equent bear or, has been deducted in the previous year but paid in any subsequent year after the expiry of the time prescribed under sub section (1) of Section 200, such mum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid. (vi) Legally speaking, Section 40(a)(ia) of the Income Act, 1961 provided that any specified payment (interest, commission, etc.) to a resident from which tax is deductible at source will not be allowable as a deduction if (a) the tax had not been deducted or (b) after deduction, had not been paid in time as provided therein. Thus, deduction of such sum is only allowed in the computation of income if tax is deducted, or after deduction, paid in any subsequent year in computing the income of that year. However, in the instant case of the appellant, it is observed that no such sum has been deducted from the anaesthesia payments made to the Doctors and therefore, the appellant is treated as assessee in default. (vii) It is also observed that prospective amendment was brought by the Finance Act 2012 in the provisions of Section 40(a)(ia) of the Act by inserting the second proviso in sub-clause (in) of claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (x) Therefore, the claim of the appellant that the payments are related to business expenditure and without such anaesthesia, surgery cannot be performed does not appear to be justified fully in view of the provisions of section 40(a)(ia) of the Act as the AO has not disallowed the entire anaesthesia expenses but has disallowed only the amount of such payments on which no TDS has been made under the provisions of section 40(a)(ia) of the Act. (xi) As regards to the reliance placed by the Id.AR of the appellant on the case of Dr. T. A. Quereshi v CIT [2006] 157 Taxman 514 (SC), it is observed that the same is on differential facts and not related to the facts and circumstances of the case of the appellant. It is observed that the Hon'ble Supreme Court in the above referred case has held that Explanation to section 37 has no relevance in case of allowability of business loss. The assessee was a medical practitioner. Some heroin was seized from him which formed part of his stock in trade. The court held that once the heroin formed part of stock in trade, it follows that the seizure and confiscation of such stock in trade has to be allowed as a business loss. The Supreme Court fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been deducted by the assessee. On this issue the bench noted that the assessee has paid the charges to the anesthesia expert as an agent of the patient. When the assessee has paid the expenditure as agent in providing service the assessee is not liable to deduct the tax as the same is merely paid as an agent of the patient. The revenue has not doubted the role of the assessee in fiduciary capacity while making the payment to the expert. As regards the payment of TDS default the bench noted the appeal of the assessee for TDS default were decided in favour of the assessee in ITA No. 404/Jodh/2018 for assessment year 2017-18. As revenue did not challenge those order where in the issue of TDS for the year under consideration has already been finalised and on the same very issue again no disallowance can be made. Based on that aspect of the case as the assessee has collected the money on behalf of someone else and there is no income on this aspect of the case. As regards the default of the assessee u/s. 40(a)(i) of the Act, the bench noted that as regards the TDS default the proceeding has already been completed and the revenue did not bring specific default, we see no reason to conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome of the appellant is sustained and the Ground of Appeal No. 6 is treated as dismissed. 10.2 The ld. AR of the assessee in support of this ground submitted that the expenses incurred is not in dispute. The allegation of the ld. AO is that the payments had been made to a third party on behalf of the doctors. Payments are towards services rendered, and even if they paid to third party these are expenses of the assessee and are allowable. 10.3 On the other hand the ld. DR supported the orders of the lower authorities and based on that prayed to sustain the addition. 10.4 We have heard the rival contentions and pursued the material placed on record. The bench noted that the fact related to the issue is that a survey proceeding on 23.01.2018 at Ajmer branch of the assessee made. In that proceeding per Exhibit 6 of Annexure A it is found that the assessee made payment of surgery and the payment of the same has been made to third party. During the proceedings the director submitted that the same has been paid as per the respective doctors instructions and he offered it to disallow the same in the statement. As the assessee did not explain the nature and purpose to the satisfaction of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmit details of discount expenses and justified the genuineness of the said expenditure. The ld. AR of the assessee in addition to the merits of the dispute submitted that since the assessment relates to search years and in the absence of any incriminating documents relating to the expenditure found, in the post search assessment addition can only be made relating to the seized material having nature of incriminating in nature. Whereas ld. AO noted that the addition is based on after search verification disallowed the expenditure claim. In the light of these facts the ld. AO made an addition to the extent of Rs. 1,60,28,120/- being the expenses on discount as wrongly claimed by the assessee. 12.2 Aggrieved from the said addition the assessee preferred an appeal before the ld. CIT (A) challenging the addition made by the Assessing Officer. A propose to the grounds so raised the relevant finding of the ld. CIT (A) is as under:- 5.2 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t order for AY 2011-12 wherein similar additions on account of discount allowed were made. It was brought to my notice that in first appeal in the AY 2011-12, the Ld. CIT (A) has allowed part relief by restricting the addition to 25% of the total addition. Subsequently, the Hon'ble ITAT has finally decided this issue in which the entire addition made has been deleted. (iv) The Ld. AR of the appellant has also contended that even on merits the said addition was not called for. It was contended that the details of ledger copies of discount to patients and the year wise summary of discount booked in the books vis- -vis the discount calculated by the AO /search team was also produced by him before the AO. It was contended that there cannot be any notional discount when the assessee has not booked any amount in the audited annual accounts and therefore no addition in the FY 2011-12 to 2015-16 can be made. It was contended that applying a standard rate on ad-hoc basis, when no amount was booked in the Profit Loss Account was unjustified. It was further argued that some of the discount was on account of the fact that for certain treatment there was package which includes cost of opera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e there is no claim of such discounts, the question of disallowance of any addition is uncalled for and there is no case of suppression of receipts by showing lessor receipts. (viii) It is observed that even in this year, the appellant has not made any claim of discount as evidenced in its Profit Loss Account statement. Further the contention of 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, it is observed that the return of income for the AY 2017-18 was filed prior to the search conducted in the case of the appellant. Therefore, the contention of the AO that the appellant has changed its method of accounting after the search is contrary to the facts available on record. The fact also remains that the AO has himself admitted that the evidences of discount amount on the bills were found and seized for FY 2016-17 2017-18 i.e. AY 2017-18 2018-19. Therefore, based on the finding for the subsequent years and not pertaining to the year under consideration, the same cannot be applied for other years unless there is some material/ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... milar issue was raised, and the appeal decided in favor of the assessee by the co-ordinate bench. The similar dispute involved in these years and considering the judicial precedent and that too in the case of the assessee be followed on consistently. The facts of this year are similar because in earlier year the discount was accounted net of receipt, whereas in these years the gross receipt is shown, and discount separately claimed as expenditure. The result of the test checks in the does not represent and it is just few person out of many persons. Hence, the issues which have already decided in favor of the assessee, there is no point in disallowance of the discount in the year under consideration. Based on these arguments he supported the order of the ld. CIT (A) submitting that it is a reasoned order, and no adverse interference is required to be withdrawn. The ld. AR of the assessee submitted that the claim of the expenditure is duly verifiable from the audited books of account maintained by the assessee and is supported by the bills of patient. The assessee already submitted the reasons for giving the discounts such as wrong duration of treatment, rates approved and decided wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the regular course of business opted by the assessee in the past year also. The similar issue has already been decided by the coordinate Bench in the assessment year 2011- 12 wherein the Bench also considered this issue and had held as under:- 6. The next issue relates to addition for discounts. From perusal of the record, we found that the AO made addition for Rs. 18,81,845/- for discounts which was partly deleted by the ld. CIT (A) and 25% of the disallowance to the extent of Rs. 4,70,461/- was sustained on which the assessee is in appeal. The 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. The AO also observed that during search some persons accepted discount and some did not accepted. Though there was no claim of discount during the year, the AO estimated the discount at Rs. 18,81,845/- and made addition thereof. 7. We also found that the ld CIT (A) observed that in the search year it was observed that discounts was being allowed and in earlier year the receipts were net of discounts. The assessee had changed the method of account of discounts. However, on the basis of conclus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the ground no. 2 of the revenue taken in ITA No. 168 169/Jodh/2022 shall stands dismissed. 13. The ground no. 3 raised by the revenue in ITA No. 167 to 169/Jodh/2022 is common for alleged addition on account of suppression of receipt of X-ray for an amount of Rs. 33,02,385/-. The fact related to this ground as emerges from the assessment order for A. Y. 2016-17 in ITA No. 167/Jodh/2022 is that day to day X-ray register was found in the search operation. The said register was seized as Exhibit-4 of Annexure-AS. In that details of X-rays done during the period of 4 months from October, 2016 to January, 2017 were taken from the IT cell of hospital. On verification of details of Xrays done during the period it is noted that worked out to 3839 ( including IPD OPD). Whereas on perusal of the register produced by the X-ray department of the hospital, the total Xray films used during the period worked out to 4530. Thus, the Xray films used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of search, the AQ held that the hospital is in practice of not reporting true and correct figure of X-rays done in its regular books of account. Since, during the FY 2016-17 relevant to AY 2017-18, the share of X-ray receipts in total revenue at 50.62 Crores of the company was 3,87 %, therefore on this basis, the AO worked out the unaccounted X-ray receipts for the year under consideration at Rs. 33,02,385/- and added to the total income of the appellant. (iii) Before me, the Ld. AR of the appellant has contended that the Ld. AO has made the addition on the basis of his findings given in the assessment order for AY 2011-12 wherein similar additions on account of suppression of X-ray receipts was made. It was brought to my notice that in first appeal in the AY 2011-12, the Ld. CIT (A) has allowed part relief on this account. Subsequently, the Hon'ble ITAT has finally decided this issue in which the entire addition made has been deleted. (iv) The Ld. AR of the appellant has also contended that even on merits the said addition was not called for. The appellant has justified its stand in its detailed submissions reproduced supra. (v) I have considered the arguments of the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed that there is no allegation that some X-rays having been done, there is no receipt issued or there is any suppression of receipts. vii) In view of the above facts, it is observed that the AO has himself admitted that The evidences of X-rays done were found and seized for 4 months period from October 2016 to January 2017 i.e. for the FY 2016-17 relevant to AY 2017-18 and not for the year under consideration. Therefore, based on the finding for a part of the year and that to not pertaining to the year under consideration, the same cannot be applied for other years unless there is some material/basis found in each year which could establish that there was suppression of receipts. It is a well settled legal position that in post search assessment, addition can be made only for the period to which a particular unexplained seized document relates and no additions can be made merely on the basis of estimations, presumption, conjectures and surmises. Therefore, in absence of any evidence related to the X-rays done pertaining to the year under consideration, the AO is not found justified in notionally computing the Xray receipts considering to be suppressed receipts. Accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t center and markets and offers provided in marketing campaigns and tie-ups with TPAs and Bhamasha Yojna. Moreover, there are many kind of X-rays done which have price difference. Also emergency charges after office hours are also charged at different rates. c. To have effective control on the system, the rate list is controlled by software and all the patients revenue is booked through the software only. d. The type of patients who undergo x-rays and other radiology services are OPD patients/IPD patients/Follow-up patients/ICU patients and such other Walk in patients who only come for such services. All patients coming to OPD IPD are given a bill which will separately reflect the x-ray charges as per the Schedule of charges on Palash software, subject to the discount. This excludes patients of BSBY Scheme which is Govt. Scheme, ESIC Govt. Servants who get treatment as approved rate by State Govt. e. The patients who have to undergo repeat x-ray due to wrong angle taken by the technician mainly because patients are of Road side Accidents Trauma are also not charged for the repeat x-ray, as it is fault of radiologist who have not properly followed instructions of treating doctors. f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ambica Ram vs. CIT 37 ITR 288. 13.5 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 apple of discord in this ground is the estimation of the X-ray receipts, which is computed on the consumption of X-ray films viz-a-viz the receipts offered by the assessee. The ld. AO noted that in the year under consideration 691 X-ray films were either not billed or suppressed the receipt of the same. The Bench noted that to support the addition made by the Assessing Officer that the assessee is corporate entity and has effected control on the system, the rate and list of various treatment provided by the assessee are at pre-determined rate. The assessee operates at various location and there is a variation in charging of Xray and other radiology services according to different centre and markets and offers provided in marketing campaign and tie-ups with TPAs and Bhamasha Yojna. Therefore, merely the billed viz-a viz some X-ray suppression on receipts cannot be considered as unrecorded receipts of the assessee the book ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) at Rs. 3,12,338/-, hence we direct the A.O. to delete the same. As it is the normal practice in the medical profession that once the patient is admitted he may have to undergo for X-ray many a time and he may be billed accordingly. It is also happen that due to operator error the result not up to the mark or the angle is not correct the expert order to rework the X-ray and in that process there are also chances that the film gets damaged also. Hence, the conspectus explanation granted by the assessee is to be considered and therefore, the consumption of the X-ray film with that of the overall billed amount no addition can be made. In the light of these fact and analysis of the various factual aspect of the case we respectfully the following decision of the Coordinate Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat patients were confused and were facing the acute shortages of currency. As patient were coming from rural background and poor status of financial affairs, absence of changing facility even the hospital has as per relation guideline accepted the currency. The patients from whom money collected were critically ill, requiring immediate surgery/treatment for which all relevant documents were taken on record by the assessee and in most of the case the funds were deposited in the bank account either by them or duly supported by the Pharmacy bills. Thus, identity of patients is not under dispute as the relevant receipt and treatment taken is already on record. The assessee submitted the detailed statement of the SBNs deposited in relations to various patients for sale of pharmacy and for the medical bill were given vide Annexure-6 in the assessment proceedings. The simple affidavit of patients who had under gone treatment were also filed. The ld. AO considered the reply of the assessee but not found satisfactory and hold that the assessee did not discharge the burden of proving the genuineness of claim of deposit of the SBNs. The details provided in the form of PAN and aadhar were not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. AR of the appellant has contended that the amount of Rs. 1,84,36,500/- was received against the revenue receipts of the hospital and argued that the Ld. AO has given no reasonable basis for making this addition, despite all details of such deposits submitted during the assessment proceedings. It was contended that the entire amount so deposited was received from the patients who were treated by the hospital during the period when demonetization was in force and the entire deposits in the bank account is verifiable from the regular books of account. It was contended that the complete patient-wise details were submitted and there is no suppression of income. (xiv) I have considered the arguments of the Ld. AR of the appellant and assessment order and I find that the assessee had furnished the details of cash deposited in the bank during the FY 2015-16 and 2016-17 before the AO which forms part of the assessment order, on perusal of which it is found that there is marginal variation in FY 2016-17 with reference to FY 2015-16 which is reproduced as under: Amount in Rs. FY 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable in the cashbooks. The fact that the cash deposits in banks were sourced out of cash sales and receipts from patients is evident from the entries in the cashbooks. The books of account of the appellant have been audited by an independent reputed auditor. The cash sales receipts are duly supported by relevant bills, which were produced before the AO in the course of assessment proceedings, and nothing adverse in connection therewith was noted by the AO. (viii) On perusal of the details filed by the appellant before the A.O., it is observed that all the books of accounts were produced by the appellant before the A.O. It is not the case of the A.O. that the appellant did not have the sufficient stock for making the pharmacy sales. The Id. AO did not make any enquiry on the material submitted by the appellant. He neither found any concrete and conclusive evidence of back dating of the entries of sale, evidence of bogus sales, evidence of bogus purchases, and non-existing cash in the books of account. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, the contention raised by the ld. AR of the assessee were even though backed by evidence were not considered by the Assessing Officer. Based on these argument ld. DR relied on the reasoned findings of the Assessing Officer and submitted that the addition deleted by the ld. CIT (A) should be reversed and the findings of the Assessing Officer be upheld. 15.3 On the other hand, the ld. AR appearing on behalf of the assessee submitted relied on the reasoned findings of the ld. CIT(A). He further submitted that while deleting the addition in the case of the assessee the ld. CIT (A) has rightly considered the evidence of treatment of the patient supported by Aadhar and PAN as supportive evidence. The ld. AR appearing on behalf of the assessee the ld. AO cannot be considered the cash receipts as income and demonetized money as in addition to that receipt already accounted upon which the Income Tax Act has already been charged. The same receipt cannot suffered 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. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of bills raised along with identity of the patient who submitted SBNs. The details is supported in the form of PAN and Aadhar ID and the same is not under dispute. The Bench noted from the records that the assessee has already offered the said receipts in the accounts maintained by the assessee. The Bench also noted that the cash receipts in the form in the SBNs are not unusual as compared to the last years. The cash receipt for the similar period on comparison not reported any unusual transaction and no such allegation made by the lower authority doubting the cash receipt in the ordinary course of services rendered by the assessee. Even the identity and the treatment given to the patient is duly recorded and there is no adverse observation on this in the regular books of account of the assessee. Revenue cannot tax twice the same receipts, as in the regular books of account this cash receipt is duly recorded as receipt. Based on these observations 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Apropos to this ground the relevant finding of the ld. CIT (A) is as under:- 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 fact remains that during the course of search action, cash amounting to Rs. 22,44,300/- was found from the residential premises of Sh. Manish Chhaparwal, M.D. of the assessee company and an amount of Rs. 2,46,700/- was also found from the bag of Smt. Devashree Chhaparwal, wife of Sh. Manish Chhaparwal. Thus, a total cash of Rs. 24,91,000/- was found out of which an amount of Rs. 19,50,000/- was seized, being treated as unexplained. Out of the aforesaid amount, Rs. 15,00,000/- was claimed 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same cash found at the residence of the Director, made by the AO in the hands of the assessee company on protective basis, cannot survive. Accordingly, the protective addition of Rs. 15,00,000/- is directed to be deleted and the Ground of Appeal No. 7 is treated as allowed. 16.2 As the Revenue is not satisfied from the findings of the ld. CIT (A) deleting the addition made in the case of the assessee on protective basis to the extent of Rs. 15,00,000/-. Revenue has challenged the action of the ld. CIT(A). In support of this ground the ld. DR representing the Revenue submitted that the appeal in the case of Shri Manish Chhaparwal is pending before the ITAT. Therefore, he supported the detailed findings of the ld. AO and prayed to sustain the protective addition in the interest of justice. 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 del ..... X X X X Extracts X X X X X X X X Extracts X X X X
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