Case Law Details
Bhandari Hospital and Research Centre (ITAT Indore)
Conclusion: When it was presumed that investment in hundi was bogus in such a situation there was no money available for the investment made by the assessee as such amount surrendered was not available, therefore, this proved that donation was made out of business receipts, which was an allowable expenditure.
Held: During the course of survey undisclosed income was surrendered by assessee through its partners under different heads. Out of the surrendered amount of Rs.31,24,41,685/-, the amount of Rs.23,61,18,930/- was surrendered in the hands of the assessee firm. Subsequently, assessee realized the mistake committed while making statement during the course of survey. Assessee stated that in respect of unaccounted receipts as per LP-02 totaling to Rs. 6,21,25,115/ – (i.e. Rs.6,45,02,010/- -Rs.23,69,425/ ) due to mental stress and lack of rest he forgot to bring to the notice of the authorized officer that unaccounted receipts as per LP-02 were utilized in making the hundi loans and therefore to the extent of unaccounted receipts the hundi loans were explained to be given out of this fund as per flow of undisclosed receipt and hundi loans given and only balance amount of Rs.104374885/ – (166500000-62125115) should be considered as unexplained. With regard to revised unaccounted receipts of Rs. 6,21,25,115/ – assessee claimed in affidavit that there were entries regarding discount allowed of Rs.23,69,425/- and petty cash expenses of Rs.7470/ – and therefore correct amount of unaccounted receipts was stated to be Rs.6,21,25,115/ – rather than Rs.6,45,02,010/- as surrendered during the course of survey as per documents placed on records which were found at the time of survey. Assessee firm had thus revised the total disclosure of surrendered income to Rs.17,16,16,920/ – as against the surrendered undisclosed income of Rs.23,69,425/- made during the course of survey proceedings in respective head. Since, the assessment order passed u/s 143(3) of the Income Tax Act, 1961 was erroneous and prejudicial to the interest of the revenue on account of failure on the part of AO in making necessary enquiries, the order of AO u/s 143(3) was set-aside and held to be erroneous and prejudicial to the interest of the revenue and AO was directed to pass the fresh assessment order after making proper enquiries on the relevant issue discussed in order u/s 263 after affording sufficient opportunity to assessee. It could be concluded that the maturity amount was available with assessee for making further investment. It was noteworthy that root of addition was the recovery of hundis. In case it was presumed that all the hundis so made were bogus and reflected imaginary figure as assessee failed to furnish confirmation from hundi holders, their identity and PAN etc, in such event only amount would be taxable what the assessee deposited in its bank account. It was held that when there was a maturity of hundi as well as investment in hundis normal corollary would be that the amount invested was out of the money received from maturity of hundis, unless adverse material was brought on record. AO had made necessary enquiry and issue was also scrutinized by the JCIT while passing order u/s 144A thus when two officers at different stage examined the issue before setting aside these finding CIT ought to have made some enquiry. If it was presumed that the hundis as recovered during the survey proceedings were not genuine in that situation the amount that was reflected on such hundis could not to be taken as income of the assessee. Therefore, the incidence of tax would be on the unexplained cash deposited in the bank account of the assessee. In this case the amount surrendered by assessee was higher than what it was found to be unexplained cash deposits in its bank account. Therefore there was no infirmity in the order giving set off of the maturity amount. PCIT had not brought any material suggesting that the amounts so surrendered by the partner of the firm was related to proceed of crime. CIT had also observed that AO failed to make enquiry in respect of year wise investment. No material was placed by assessee regarding this issue. Thus, when there was claim of investment being made out of unrecorded hospital receipts he ought to have made investigation regarding year wise investment. This observation of the Ld. Pr. CIT was sustained.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal by the assessee is directed against order of the Pr.CIT-I, Indore dated 30.03.2017 for the A.Y. 2012-13. The assessee has raised following grounds of appeal:
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