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Facts
The Assessee, Banga Hospital Private Ltd., appealed against an order confirming additions made by the Assessing Officer (AO). The additions pertained to unexplained cash deposits and unexplained investments. The assessee argued that the cash deposits were from patients and medicine sales, and investments were made from own funds and bank accounts.
Held
The Tribunal held that the addition of Rs. 4,94,000/- under Section 69A was without merit as the cash flow was supported by contemporaneous records and the AO failed to disprove the genuineness of sales. For the addition of Rs. 1,03,83,822/-, the Tribunal found that while the assessee provided details of payments and bank transactions, the source of the entire amount was not fully substantiated, leading to a partial disallowance.
Key Issues
Whether the additions made by the AO under Section 69A for cash deposits and Section 69 for unexplained investments are justified based on the evidence and facts presented by the assessee.
Sections Cited
69A, 115BBE, 69
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Order PER LALIET KUMAR, J.M: This is an appeal filed by the Assessee against the order of the Ld. CIT(A) / NFAC, Delhi dt. 14/12/2023 pertaining to Assessment Year 2017-18.
At the outset the Registry has pointed out that the above appeals are barred by limitation by 17 days.
3. After considering the condonation application filed by the assessee in, we condone the delay for which sufficient cause is shown, and admit the appeal for adjudication.
In the present appeal Assessee has raised the following grounds:
On the facts and in the circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) NFAC erred in passing the order without appreciating the facts, documentary evidences produced in support of submission by the Appellant. Ground 1. Appellant filed written submission as and when the notice was issued. However finally the written submission was made on 31.7.2023 with the request for hearing.
2 As the Appellant filed additional documents for further detailing of documents already submitted before the Ld. AO, Ld. CIT(A) NFAC forwarded these for remand report from Ld. ITO, Mandion 26.10.2023 which was replied in details on 29.11.2023. Thereafter the order u/s 250 was passed without granting us any hearing as requested while submission of written submission on 31.7.2023 particularly when the Appellant disagreed on the remand report, as a natural justice. Ground-2 Additions of Rs. 494000.00 for depositing un-authorized cash in old currency its Bank accounts confirmed by Ld. CIT(A) NFAC. The Ld. CIT (A) NFAC in its order at page No. 30reproduced/pasteda para of opinion of Ld. AO in remand report dated 26.10.2023 and passed order: "In view of the above, considering all the facts and circumstances of the case, it is evident that the appellant has failed to substantiate his claim with supporting documents. In view of the fact that there is no material on record to warrant interference in the order of Assessing Officer, the addition made under section 69A r.w.s. 115BBE of the I-T Act, 1961 for the amount of Rs. 4,94,000/- is confirmed. The Grounds of Appeal are hereby dismissed." The Ld. CIT(A) NFAC did not consider Appellant's submission that a. The Ld. AO in his original order dated 26.12.2019 added Rs. 494000.00 and he did not provide opportunity to the appellant to clarify & confront the basis of his calculation before making such additions of old cash currency deposit in banks. b. The Ld AO's remand report dated 26.10.023 did not pointed out any discrepancy in calculation/deposit sheet of old & New currency notes from sale of pharmacy medicines, in submission/replyby Appellant except that "However, in the written submission filed, the assessee has now segregated its information in mysterious ways which are not true but twisted entries." c. The Ld. CIT(A) NFAC did not discuss the law while application of section 69A as the same was a ground of appeal in the written submission dated 31.7.2023. Ground 3. Additions of Rs. 10383822.00 is treated as unexplained investments from undisclosed sources as per the provisions of section 69 read with section 115BBE of the Income Tax Act, 1961, confirmed by Ld. CIT(A) NFAC. The Ld. CIT (A) NFAC in its order at page No. 32 reproduced/pastedpara of opinion of Ld. AO in remand report dated 26.10.2023 and passed order: "In view of the above, considering all the facts and circumstances of the case, it is evident that the appellant has failed to substantiate his claim with supporting documents. In view of the fact that there is no material on record to warrant interference in the order of Assessing Officer, the addition made under section 69 r.w.s. 115BBE of the I-T Act, 1961 for the amount of Rs. 1,03,83,822/- is confirmed. The Grounds of Appeal are hereby dismissed." The Ld. CIT(A) NFAC did not consider Appellant's submission that: a. The Appellant provided details of each and every assets they have purchased during the year along with date, name of vendor,amount of bill, and source of bank from which payment was made. Besides that bank Account statements, Bills of assets purchased, Ledger account of assets were also provided to prove source of payment from internal accruals but addition were confirmed Total Value of assets minus Loan borrowed. (Rs. 57513822.00-47130000.00). How they treated rest of amount as unexplained investments from undisclosed sources. b. The Ld AO's remand report dated 26.10.023 did not pointed out any discrepancy in sheet of fixed assets purchased by the Appellant except the word Own sources which means from the internal accrual of the Appellant business and as such no credits outstanding in books on this account were pointed out by Ld. AO in remand report. There 3 were assets for the value as low as Rs. 700, 900, 2000, 4000, 8000. In submission/reply by Appellant the Ld. AO in his remand report dated 26.10.2023 did not find anything adverse except that"The presenting of twisted details by way of a chart, the assessee is only trying to divert the issues based on its own calculation that is after a gap 4 years from the period of assessment proceedings..." c c. The Ld. CIT(A) NFAC did not discuss the law while application of section 69 as the same was a ground of appeal in the written submission dated 31.7.2023.. The Appellant prays that the additions/disallowance of Rs. 10877822.00 made in respect of addition of Rs. 494000.00 on account of unauthorized cash deposit of old currency in Bank and Rs. 10383822.00 as unexplained investments from undisclosed sources respectively be deleted.
Brief facts of the case are as under: 5.1 With respect to the first addition, the AO noted that during the period from 09/11/2016 to 30/12/2016, the assessee had deposited a total of Rs.1,57,86,060/- in cash in several bank accounts. On verification, the AO alleged that cash deposits in three bank accounts exceeded the reported cash sales of drugs permitted during demonetization. Consequently, the AO treated a sum of Rs.4,94,000/- as unexplained, invoking the provisions of Section 69A, and made the addition. The assessee contended that these cash deposits were fully accounted for and were received from patients and sale of medicines, which was permitted under the RBI Notification during the demonetization period. It was submitted that detailed books of accounts, cash book entries, pharmacy sales registers, and bifurcation of sales into old and new currency had been duly furnished. The assessee also submitted an explanation that sales were accounted for on a daily basis and the pharmacy operated 24x7, thereby creating a timing mismatch in calculating daily cash flows by the AO. Furthermore, the assessee emphasized that the amount in question was duly recorded in the books and supported by documentary evidence, hence the essential pre-conditions for invoking Section 69A were not satisfied. It was pointed out that once the transaction is recorded in the books and is duly explained, the deeming provision of Section 69A cannot be invoked. 5.2 Regarding the second addition, the AO observed that the assessee had shown investment in fixed assets amounting to Rs.5,75,13,822/- during the relevant previous year. It was further noted that a term loan of Rs.4,71,30,000/- was obtained by the assessee from HDFC Bank towards the purchase of an MRI machine valued at Rs.5,44,00,000/- crores. The balance amount of Rs.1,03,83,822/-, being the difference 4 between the total investment and the loan amount, was treated by the AO as unexplained investment under Section 69. The assessee submitted that the balance amount had been paid from its own funds through identifiable bank transactions and that all payments were duly recorded in the books of accounts. The assessee placed reliance on audited financial statements, bank statements, depreciation chart, loan documents, and ledger accounts. It was pointed out that the AO made the addition on mere presumption and failed to appreciate that all requisite details had already been submitted, both during the assessment and appellate proceedings.
During the appellate proceedings, the Ld. CIT(A) admitted the additional evidence filed by the assessee in the form of a structured chart showing the link between purchase bills, payment vouchers, bank transactions, and vendor details. The CIT(A), after calling for a remand report from the AO, considered the counter comments filed by the assessee. Assessing Officer in the remand report had reiterated the earlier stand in para 6.1 of the order Ld. CIT(A). In para 6.1 in the remand report it was submitted as under:
6.1 The additional evidences as mentioned in para 12 and 12.5 of the form 35 and filed by the appellant during appellate proceedings under Rule 46A were forwarded to the AO and remand report was called from the AO. The AO vide letter 26.10.2023 submitted remand report, which is as under: सेवा म" The Commissioner of Income Tax (Appeals) National Faceless Appeal Centre Delhi महोदय Subject: Request for remand report - in the case of M/s Banga Hospitals Private Limited (PAN-AACCB5961E) for the AY 2017-18 - Regarding Kindly refer to your office direction ID number 100000043265332 wherein this office was directed to submit comments on the issue of admissibility of additional evidences and also directed to submit the remand report on the above noted subject.
2. In this connection it is to be stated that as per Rule 46A of the Income Tax Rules, 1962 an assessee is debarred to furnish any new evidence in the appellate proceedings which he had not furnished during assessment proceedings except in certain circumstances as mentioned in the said Rule. The present assessee's case also does not fall under any of these exceptions. It is admitted fact that the Ld. Assessing Officer had not refused to admit the evidence which ought to have been admitted and sufficient opportunities were provided to the assessee as evident from the assessment records itself. Any exception of sufficient cause for not producing the evidence before Assessing Officer is also not applicable in this case as ali the notices and questionnaires were validly issued and served upon the assessee which is clear from the fact that assessee company itself as well as its counsel were very much aware of the assessment proceedings and issued various notices to it. Further, in this case assessment for the above assessment year was completed u/s 5 143(3) on 26.12.2019 at an income of Rs. 1,38,03,762/- against returned income at Rs. 29,25,940/-, Against the additions made under sections 69 and 69A the assessee has filed appeat in prescribed Form No-35 vide acknowledgement number 288523071070120 dated 07.01.2020. In its Written Submission' filed during appellate proceedings, the assessee has, now alleged that it was not confronted for the additions made during assessment proceedings. In contrary to the above, It is apparent from the assessment records that during the course of assessment proceedings, number of notices under seatton 142(1) were isstied to the assessee, however the assessee had intentionally tried to avoid the assessment proceedings in huge extent. The failures to comply with the notices Issued under section 142(1) on the part of the assessee during the assessment proceedings are enumerating herein under in chronological order,- a) Questioners, inter alia, the receipts of high value cash during demonetization period and substantial investment in the fixed assets were issued to the assessee under section 142(1); vide Notice no. ITBA/AST/F/142(1)/2019-20/1017213266(1) dated 05.08.2019. Assessee was required to furnish its submission on or before 20.08.2019. However the assessee failed to comply the same. b) Subsequent, nolice under section 142(1) was issued to the assessee vide Notice no. ITBA/AST/F/142(1)/2019-20/1017836740(1) dated 07.09.2019 issued. Assessoe was required to fumish its submission on or before 17.09.2019. However the assessee, once again, failed to comply the same.
c) Another notice under section 142(1) was issued to the assessee vide Notice no. ITBA/AST/F/142(1)/2019-20/1018304822(1) dated 25.09.2019. Assessee was required to furnish its submission on or before 04.10.2019. However the assessee, thistime filed partly reply on 03.10.2019. d) Once again, vide notice under section 142(1); Notice no. ITBA/AST/F/142(1)/2019- 20/1019324525(1) dated 23.10.2019 issued, the assessee was once again requested to furnish the details of demonetized cash deposited in its bank accounts during demonetization period in prescribed performs alongwith nature and source of such cash deposits. Besides, sources alongwith documentary evidences of investment in fixed assets were also requisitioned from the assessee. The assessee was required to furnish its submission alongwith all supportive documentary evidences on or before 08.11.2019. However the assessee, this time again failed to comply the same. e) Subsequent reminder notice under section 142(1); Notice по. ITBA/AST/F/142(1)/2019- 20/1020608855(1) dated 18.11.2019 issued, the assessee was once again requested to fumishalongwith all supportive documentary evidences, as called for, on or before 22.11.2019. However the assessee, this time again failed to comply the same. f) Since, assessee has intentionally tried to avoid the assessment proceedings therefore vide show cause Notice no. ITBA/AST/F/143(3)/(SCN)/2019-20/1021929781(1) dated 09.12.2019 the assessee was confronted as to why sh deposited Rs. 1,57,86,060/- during the demonetization period in its bank accounts may not be treated as unexplained cash deposits from undisclosed sources. Apart from that, the assessee was also confronted as to why addition made in fixed assets at Rs. 5, 71,90,275/- may not be treated as investment from undisclosed sources. The assessee was required to furnish its reply alongwith all supportive documentary evidences on or before 13.12.2019. At last, the assesseefumished its reply on 19.12.2019. The assessee furnished its Cash Book, service collection receipts, ledgers etc. which were meticulously securitized/examined by the Ld. AO and after duly examination of the information and evidences as supplied and data available on the records, the assessment was completed on 26.12.2019. From the above narrated facts, it is abundantly clear that the assessment has been made by the Ld. A.O. as per the provisions of the Income Tax Act, 1961 and the appellant company does not deserve any relief at your honour's end. However as per your kind directions, I have gone through the written submission filed by the above named appellant 6 before your goodself. It has been observed from the same that in the instant written submission, the assessee has not produced any new evidence on record. The details of cash flow statement in 'Annexure-4' and, copy of details of assets acquired by Appellant assessee in 'Annexure- 6, as annexed with the written submission, it has been observed from the assessment records that the assessee has, during the course of assessment proceedings, already furnished the information in the shape of 'Cash Book, Safe Register Service Collection' 'Consultancy OPD' and ledgers of all fixed essets. However, the Assessing Officer has made additions on account of under sections 69 and 69A which were the net additions, after meticulously examination and verification of Information provided by the assessee itself, in the unexplained cash deposited of demonetized notes and investments. As it is evident from the assessment record that during assessment proceedings assessee has failed to substantiate its claim and also even at appellate stage, assessee has made onlywritten submission without any new evidences i.e. in the instant written submission the assessee once again failed to produce any ovidences of sources of cash deposit and investments in fixed assets. However, in the written submission filed, the assessee has now segregated its information in mysterious ways which are not true but twisted entries. Now in written statement the assessee, in "Additions of deposits in Bank of India account No 792030100003007' and Additions of deposits in Punjab & Sind Bank account No 1047110000009 has furnished the narration in all unexplained cash deposited to as 'Balance of old notes CF..." The missing point is once again the sources and relevant documentary evidences of sald old notes. The Ld. AO has already examined the same with the produced 'Cash Book', Sale Register' Service Collection' 'Consultancy OPD' etc during the assessment proceeding and found unexplained as per the provision under section 59A of the Income Tax Act, 1961. Besides, this time also the assessee failed to make any submission of unexplained cash deposited at Rs. 50,000/-in its bank account number 792020110000098 In Bank of India, Mandi. As far as unexplained investment of Rs. 1,03,83,822/- under section 69 of the Income Tax Act, 1961 is concerned, the assessee stated that it has proved the information during the assessment proceedings are;- a) Copies of bank accounts, b) details of assets purchased with ledger accounts, c) copies of bill of assets, d) depreciation charts, and e) Bank loan account statements of HDFC Bank Ltd. It is true that except (e) Bank loan account statements of HDFC Bank Ltd, the assessee has produced other information. As regard the Bank loan account statements of HDFC Bank Ltd. is concerned the assessee has, despite various requests, never supplied the same. Instead, the assessee has supplied the HDFC Bank repayment schedules only. Further, it is observed from assessment records that the assessee has borrowed a sum of Rs. 4,71,30,000/- from HDFC bank account. However, the total investment in the fixed assessee during the year under appeal were Rs. 5,75,13,822/- The balance of Rs. 1,03,83,822/- were remained unexplained as the assessee company failed to substantiate sources of this amount. In reply dated 19.12.2019 the assessee submitted that this amount has been paid out of its own funds and from bank accounts. However, the assessee failed to produce any documentary evidences of its own funds in this effect. Now the assessee has make a chart of "Details of Fixed assets acquired and payments made by the Company. However this time also the assessee is giving the details of payment for acquiring of the fixed assessee which it has already done during the assessment proceedings. Yet, the moot question is remain unexplained; the sources and evidences of 'Own Funds' The presenting of twisted details by way of a chart, the assesses is only trying to divert the issues based on its own calculation that is after a gap 4 years from the period of assessment proceedings, it is nothing but is trying to befool the department and to force the department to accept its 7 submission on the terms of its own conditions but not as as per the materials available on records. It is clear from the assessment record that the Ld. AO has rightly made additions under sections 69 and 69A after thoroughly examined & verified the facts of cash in hand, cash received from parties concemed, cash/ credit payment to the parties concerned, cash available with it on the date of deposit in respective bank accounts as well. Merely furnishing the information in changed performa/format/chart for its own satisfaction, for which Information has already been furnished before the Assessing Officer during essessment proceedings' does not constitute an evidence. The information produced now during appellate proceedings are hypothetical, twisted and unreliable description and tantemount to be reject ab-initio. Therefore, the submissions as put-forth by the assessee have not any weight age, therefore inadmissible and deserve to be rejected.
Since the onus to prove the genuineness of receipts income and legal sources of investment claimed under the above additions, lies solely upon the assessee itself for which it failed to do so, therefore the additions have rightly been made by the L.d. Assessing Officer. Hence, keeping in view the facts of the case, the submission made by the assessee may kindly be rejected and additions may kindly be upheld."
The assessee was called upon to give the comments to the remand report given by the Assessing Officer. The assessee has submitted the parawise reply and the details of the bank account, CC Account and the source of the deposit made in the bank accounts (6.2 of the CIT(A)).
The CIT(A) noted that the AO had not pointed out any discrepancy in the documentary evidence submitted. In fact, the AO merely reiterated his earlier findings without engaging with the explanation or making a case for rejection of the evidence furnished. The CIT(A) held that in view of the judgment of the Hon’ble Supreme Court in the case of Jute Corporation of India Ltd. v. CIT and other judicial precedents, principles of natural justice demand that evidence going to the root of the matter be considered even at the appellate stage. Hence, the CIT(A) had admitted the additional evidences filed by the assessee.
The Ld. CIT(A), with respect to Ground No. 1 had confirmed the addition while finding given in para 7.1.3 and 7.1.4 of his order.
The Ld. AR had submitted that the contempranious documents and the evidences were provided to the authorities below and no discrepancy was pointed out by them. Even from the perusal of the order of the CIT(A), it is clear that the Ld. CIT(A) had merely relied upon the remand report of the Assessing Officer.
The Ld. DR relied upon the order passed by the lower authorities.
8 11. We have perused the assessment order, the order of the CIT(A), the remand report, the counter submissions of the assessee, and all relevant documents placed in the paper book. The core issue for consideration is whether the two additions made by the AO under Section 69A and Section 69 were based on adequate material and in accordance with law.In our considered opinion, the addition of Rs.4,94,000/- under Section 69A is devoid of merit. The entire cash flow of the hospital and pharmacy was supported by contemporaneous records. The assessee had explained that cash in hand included receipts from permitted pharmacy sales in old currency as per government notification. The AO has neither disputed the genuineness of the sale of medicines nor brought any adverse material to disbelieve the cash book entries. The AO simply presumed that certain deposits exceeded the daily sales without appreciating the 24-hour nature of the hospital's operations and cumulative cash balance. Further, the sum was duly recorded in the books, which renders Section 69A inapplicable as per its own language and settled judicial precedents. In view of the above the Ground No. 1 of the assessee’s appeal is allowed.
With respect to Ground No. 2, The Ld. AR had submitted that amount was deposited in the bank account after the encashment of the FDR’s and from the bank account of the Hospital the above said submissions were reiterated by the assessee in the submissions before the Ld. CIT(A) which are available in para 8 at pags 19-28 of the order of the Ld. CIT(A). It was also pointed out by the Ld. AR that the order of the Ld. CIT(A) is cryptic and has not dealt with the contention of the assessee and he had drawn our attention to para 7.2.1 to 7.2.4 of the order passed by the Ld. CIT(A) which is to the following effect.
7.2.1 All the facts of the case, Grounds of appeal, statement of facts, online submissions of the appellant, Remand report, counter comments of appellant, the case laws cited and the assessment order are considered, The AO has made the addition for Rs. 1,03,83,822/- u/s 69 r.w.s. 115BBE of the IT Act 1961 and noted in the assessment order at para number 3 that, "In response, the assessee submitted that the company has purchased assets worth of Rs. 57513 822/- during the year under consideration including MRI for Rs. 5,44,00000/-. It has borrowed a sum of Rs 4,71,30,000/- from HDFC Bank Ltd terifs purchases. The balance of asset and margin money for purchase of MRI machine was paid out ,of its own funds & bank accounts. However, the assessee company could not furnish any documentary evidences in support of the source of balance Rs. 1,03,83,822/- shown as investments made in acquisition of fixed assets and thus the amount remained unvetified/unexplained. Reese, keeping in Wow the above, investment made in acquisition of fixed assets at R& 1,03,83,822/- is treated as unexplained imiestment from undisclosed sources as per the provisions of Section 69 rms. /15f3BE of the IT Act and charged ta tax accordingly. Penalty 9 proceeding u/s 27IAAC(t)of the Mt is being initiated separately (Addition: Rs. 1;03,83,822b)" 7.2.2 The appellant in his submissions made during appellate proceedings claimed that the AO has wrongly added contribution of assessee company in acquisition of fixed assets of Re 10383822.00 by treating it as unexplained investments from undisclosed sources as per the provisions of section 69 read with section 115BBE of the Income Tax Act, 1961. The appellant claimed that in present case the AO was provided with all the details. The AO presumed that appellant could not furnish any documentary evidence in support of the sources of balances of Rs. 10383822.00 shown as investment made in acquisition of fixed assets and thus amount remained unverified. The appellant filed additional documents in support of his claim and in counter comments filed against the remand report filed by the AO in remandproceedings, the appellant submitted at para number 8 to 10 that "Whereas the appellant assessee categorically replied in his letter dated 19.12.2019 against SCN notice dated 18.12.2019 that " The assessee purchases assets worth Rs. 57513822 00 during the year including MRI for Rs. 54400000 00. The assessee borrowed Rs. 47130000.00 from HDFC Bank Ltd for its purchase. The necessary loan accounts are already submitted. The Balance of assets and margin money for purchase of MRI is paid out of our own funds & from bank accounts of assessee." This made imperative to prepare an excel sheet presentation from the data submitted to show what we submitted on 19.12.2019 before the LdAO against his SCN dated 18.12.2019 is absolutely correct and there isno unexplained investments. Here again the Ld. ITO Mandi did not find any discrepancy inevidence of acquisition of fixed asset and payment to vendors in the details of payments made from the Bank on the dates mentioned which justifies the source of investment." The appellant's submission has been carefully considered. 7.2.3 The appellant has failed to substantiate his claim with supporting documents as clearly observed by the AO in assessment order and in remand report. It is noteworthy to consider the following observation of the AO in remand report, "As far as unexplained investment of Rs. 1,03,83,822/- under section 69 of the Income Tax Act, 1961 is concerned, the assessee stated that it has provided the information during the assessment proceedings are;- Copies of bank accounts, a) details of assets purchased with ledger accounts, b) copies of bill of assets, c) depreciation charts; and d) Bank loan account statements of HDFC BankLtd. e) It is true that except (e) Bank loan account statements of HDFC Bank Ltd the assessee has produced other information. As regnW the Bank loan account statements of HDFC Bank Ltd. is concerned the assessee has, despite various requests, never supplied the same. Instead, the assessee has supplied the HDFC Bahl( repayment schedules only. Further, it is observed from assessment records that the assessee has borrowed a sum of Rs. 4,71,30,000/- from HDFC bank account. However the toter investment in the fixed assessee during the year under appeal were Rs 5,75,13,822/, The balance of Rs 1,03,83,822/- were remained unexplainedas the assessee company-Wed Sto substantiate sources of this amount In reply dated 19.12.2019 the assesseresubmittedthat this amount has beenpaid out of its own funds and from bank accounts. However the assessee failed to produce any, documentary evidences of its own funds in this effect. Now the assesses has make a chaff of "Details of Fixed assets acquired and payments made by the Company. However this time also the assessee is giving the details of payment for acquiring of the fixed assets which it has already done during the assessment proceedings. Yet, the moot question is remain unexplained; the sources and evidences of 'Own Funds' The presenting of twisted details by way of a chart, the assessee is only trying to divert the issues based on its own calculation that is after a gap 4 years from the period of assessment proceedings..." 7.2.4 In view of the above, considering all the facts and circumstances of the case, it is evident that the appellant has failed to substantiate his claim with supporting documents. In view of the fact that there is no material on record to warrant interference in the order of Assessing Officer, the addition made under section 69 r.w.s. 115BBE of the I-T Act, 1961 10 for the amount ofRs. 1,03,83,822/- is confirmed. The Grounds of Appeal are hereby dismissed. 12.1 In view of the evidences brought to our notice and non consideration by the Ld. Assessing Officer and CIT(A) Tribunal had directed the Ld. Assessing Officer to file the comments with respect to the addition of Rs. 10383822/-. The Ld.AO had submitted the report on 07/04/2025 which is to the following effect :
To our surprise, the Assessing Officer without applying his mind and without considering the evidence on record had reiterated the assessment order passed by him. We strongly disapprove this attitude of the Assessing Officer and request the concerned Senior authorities to look into this matter and direct him to apply his mind on the basis of the material and should not be oblivious to the facts staring at him.
We have ourself considered the evidences available on the record, we find that the assessee had furnished all material facts, including purchase bills, payment records, bank statements, and loan repayment details. The AO has not disputed the identity of the vendors or the genuineness of the transactions. The payments have been made through banking channels, and the investments are duly reflected in the audited financials. The addition was made merely on the basis that the source of margin money (over and above the loan) was not proved, despite the fact that the assessee had furnished proof of payments from its bank accounts. In such circumstances, the addition under Section 69, a deeming provision, cannot be sustained without bringing on record cogent material to show that the assessee had made investments from unexplained sources. 13.1 The assessee had purchased fixed assets of Rs.5.75 crores, including an MRI machine worth Rs.5.44 crores. Against this, a term loan of Rs.4.71 crores was obtained from HDFC Bank. The balance of Rs.1.03 crores was paid through bank accounts from assessee’s own funds. The assessee submitted a detailed reconciliation of payments 14 made towards the acquisition of fixed assets during the relevant financial year, along with the corresponding sources of such payments. As per the records, the assessee made the following payments: On 03.12.2016, a payment of Rs.8,50,000/- was made from HDFC FDR Account No. 0001. On 06.12.2016, a sum of Rs.12,00,000/- was paid from HDFC FDR Account No. 0002. On 08.12.2016, Rs.5,00,000/- was paid through transfer from Cash Credit Account No. 001 maintained with Bank of India.
On 10.12.2016, a payment of Rs.6,00,000/- was made from HDFC FDR Account No. 0003. On 15.12.2016, Rs.7,00,000/- was paid from HDFC FDR Account No. 0004. On 18.12.2016, Rs.10,00,000/- was transferred from Cash Credit Account No. 002 held with Bank of India.
On 20.12.2016, a further payment of Rs.9,00,000/- was made from Cash Credit Account No. 003 at Bank of India.