DR.S. GURUSHANKAR, MADURAI V. ACIT, CIRCLE-1, , MADURAI

CO 16/CHNY/2020

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4315 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 1 month(s) 29 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 17-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 18-03-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Depreciation; Income from undisclosed sources; Corroborative evidences; Bogus
• Section: 132; 11; 143(3); 153A; 80IB; 143(2); 13

Judgement Text

आयकर अपीलीय अिधकरण ’सी’ ायपीठ चे ई म । IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI माननीय+ीमहावीर िसंह, उपा01एवं माननीय +ी मनोज कु मार अ6वाल ,लेखा सद9 के सम1। BEFORE HON’BLE SHRI MAHAVIR SINGH, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपीलसं./ITA Nos. 2265/Chny/2019 (िनधाBरणवषB / Assessment Years: 2014-15) & आयकरअपीलसं./ITA Nos. 2266/Chny/2019 ( िनधाBरणवषB / Assessment Years: 2015-16) ACIT Central Circle -1, Madurai. बनाम/ V s. Dr. S. Gurushankar 2/214, Uthangudu, Melur Road, Madurai – 625 107. थायीलेखासं./जीआइआरसं./P AN /GI R No. AD S P G -8 3 2 5 - M (अ पीलाथ /Appellant) : ( थ / Respondent) & CO No. 16/Chny/2020 (Arising out of ITA No. 2266/Chny/2019) ( िनधाBरणवषB / Assessment Year: 2015-16) Dr. S. Gurushankar 2/214, Uthangudu, Melur Road, Madurai – 625 107. बनाम/ V s. ACIT Central Circle -1, Madurai. थायीलेखासं./जीआइआरसं./P AN /GI R No. AD S P G -8 3 2 5 - M (अ पीलाथ /Appellant) : ( थ / Respondent) अपीलाथ कीओरसे/ Appellant by : Shri. B. Ramakrishnan (FCA) – Ld. AR थ कीओरसे/Respondent by : Shri. M. Rajan (CIT) – Ld. DR सुनवाईकीतारीख/ Date of Hearing : 04-04-2022 घोषणाकीतारीख / Date of Pronouncement : 18-05-2022 ITA Nos.2265 & 2266/Chny/2019 & CO No.16/Chny/2020 - 2 - आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. The revenue is in further appeal for Assessment Years(AY) 2014- 15 & 2015-16 which arises out of commonorder passed by learned Commissioner of Income Tax (Appeals)-19, Chennai [CIT(A)] on 14.09.2018. The assessment for AY 2014-15 has been framed by learned Assessing Officer (AO) u/s 143(3) r.w.s. 153A on 31.12.2016 whereas the assessment for AY 2015-16 has been framed on same date u/s 143(3). The assessee, upon receipt of notice of hearing, has filed cross-objections for AY 2015-16. The grounds taken by revenue in AY 2014-15 read as under: - 1. The order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts of the case and in law. 2. The learned CIT(A.) erred in directing the Assessing Officer to delete the disallowance of deduction u/s 80IB of Rs.3,34,51,938/- 2.1 The learned CIT(A) ought to have appreciated the fact that the AO has rightly compared the two concerns as all the conditions for comparison are satisfied i.e., both MMHRC & MH are in the same field of providing medical services, they are both in the same state and inadjacent cities, there are no time differences and both are being managed by the assessee, Dr. Gurushankar, as Vice-Chairman ofM/s Meenakshi Mission Hospital and Research Centre, Madurai and as also the head of M/s Meenakshi Hospital, Tanjore. 2.2 The learned CIT(A) ought to have appreciated the fact that the AO has compared the Turnover in the two cases with respect to the investment in medical equipment only to bring out the fact that the proprietary/ corporate hospital has tried to show more profit margin as it will be enjoying deduction u/s. 80IB(11C) for a restricted period of 5 years, whereas the charitable organization is eligible to claim exemption of its entire income u/s. 11 if it is able to show application of 85% of its income towards charitable activities only. 2.3 The learned CIT(A) ought to have appreciated the fact that the AO has rightly disallowed the deduction as the hospital has tried to show more profit while it is claiming tax deduction u/s. 80IB(11C), which will in turn be enjoyed by the management of the Hospital, whereas the charitable organization has to apply its income towards the objects of the trust and cannot be shared by the trustees. 2.4 The learned CIT(A) erred in not appreciating the larger picture, though AO has rightly made the disallowance, as Monica Group was the only major supplier of medicines to MMHRC, the charitable insttn, and the payments made were withdrawn from bank accounts of Monica group by way of cash. 2.5 The Id CIT(A) failed to appreciate that the assessee had deposited Rs12.42 crores between 8.6.14 & 16.11.14, i.e, a span of just five and half months into the HDFC current a/c no. 24500. ITA Nos.2265 & 2266/Chny/2019 & CO No.16/Chny/2020 - 3 - 2.6 The learned CIT(A) erred in not considering that the assessee had transferred the funds amounting to Rs.5.8 crores on 30.08.2014 from MMHRC, Madurai, HDFC. A/c no. 04416 to MH, Tanjore, A/c no. 24499. 2.7 The learned CIT(A) erred in not considering that the. assessee had transferred the funds amounting to Rs 6.0 crores on 15.09.2014 from SBI(PPB), Madurai, HDFC. A/c no. 40127 to MHTanjore, A/c no. 24499. In cross-objections for AY 2015-16, the assessee is aggrieved by partial confirmation of addition of Rs.24.03 Lacs. 2. The registry has noted a delay 235 days in revenue’s appeal and delay of 174 days in assessee’s cross-objections. The condonation of the delay has been sought by the revenue on the strength of affidavit of the learned Assessing Officer (AO) wherein it has been stated that the assessment files got mixed up with other case records and the delay was neither willful not wanton. The Ld. AR has also filed condonation petitionwhich is accompanied by the affidavit of the assesseewherein it has been stated that since the assessee was a non-resident, there was a delay in obtaining the signatures of the assessee on appeal papers. Considering the contents of the petition / affidavit, we condone the delay in revenue’s appeal as wellas in assessee’s cross-objections and admit the same for adjudication on merits. 3. The Ld. CIT-DR advanced arguments to submit that profits were shifted from one entity to another to claim higher deduction u/s 80-IB which is evident from the profit-ratio of the two concerns. The Ld. AR, on the other hand, controverted the stand of Ld. CIT-DR and drew attention to the findings given by Income Tax Settlement Commission (ITSC) in the case of Shri T. John Rajasekhar. The Ld. AR also assailed the confirmation of additions as sustained by Ld. CIT(A) in the impugned order. ITA Nos.2265 & 2266/Chny/2019 & CO No.16/Chny/2020 - 4 - Having heard rival submissions and upon perusal of relevant material on records, our adjudication would be as given in succeeding paragraphs. Assessment Proceedings 4.1 The assessment for AY 2014-15 was framed u/s 143(3) r.w.s. 153A on 31.12.2016. The assessee is a Doctor by profession. The assessee is Vice-Chairman of a trust namely S.R.Trust which runs M/s Meenakshi Mission Hospital and Research Centre, Madurai (MMHRC). During October, 2009, the assessee acquired certain land in Tanjavur and constructed a super specialtyhospital by the name Meenakshi Hospital (MH) which started functioning during January, 2013. From AY 2013-14, MH was eligible for deduction of 100% of its profits u/s 80-IB(11C) of the Act. Accordingly, for AY 2014-15, the assessee filed return of income at Rs.130.98 Lacs on 30.09.2014 afterclaiming deduction u/s80IB for Rs.1323.09 Lacs. 4.2 The assessee was subjected to search action u/s 132 on 26.11.2014 and notices were issued u/s 153A. The assessee offered the original return of income whereas Ld. AO assessed income at Rs.794.04 Lacs. The increase in income primarily stem from the fact that Ld. AO had restricted the deduction u/s80IB to the extent of 50% and added the balance profits as unaccounted income under the head‘income from other sources’. 4.3 The deduction was so restricted by Ld. AO on the allegation that assessee suppressed turnover and inflated expenses of MMHRC by siphoning-off the trust funds for personal investments in various properties including construction of new hospital building at Tanjavur for MH. Simultaneous searches were also conducted in the case of trust, ITA Nos.2265 & 2266/Chny/2019 & CO No.16/Chny/2020 - 5 - trustees and also in the case of one Shri T. John Rajasekhar of Monica Group of concerns. Shri T. John Rajasekhar was stated to be an exclusive supplier of drugs and surgical material to the MMHRC trust at Madurai. On the basis of search findings, it was concluded that funds were siphoned-off from MMHRC by the assessee through some of the suppliers especially through Monica Group which was evident from the fact that unaccounted income was detected in the case of concerns owned by Shri T. John Rajasekhar.It was alleged that entire money withdrawn in cash from the bank accounts of Monika Group was paid by MMHRC as if the purchases were made from Monica group of concerns. Though Shri T. John Rajasekhar did not state under oath, over the exact manner in which the cash so withdrawn was applied / spent, it would be imperative that the whole or part of the cash has been returned to the assessee being trustee and Vice-Chairman of MMHRC. It was also alleged by Ld. AO that the whole or part of the cash was returned to the assessee holding the position of trustee of MMHRC. In other words, it was alleged that the hospital receipts of MMHRC were siphoned-off through Monica Group and re-introduced in the form of hospital receipts of MH in order to claim higher deduction u/s 80-IB(11C) of the Act. 4.4 During search on MH, a difference of Rs.1242.12 Lacs was found for AY 2015-16 between cash collections as per ‘Backbone software’ and total cash collections as per ‘Tally software’ which was accepted by the assessee as ‘income from other sources’received in the form of gifts, donations, consultation charges etc. In the light of these facts, it was alleged by Ld. AO that the assessee was in the habit of introducing ITA Nos.2265 & 2266/Chny/2019 & CO No.16/Chny/2020 - 6 - unaccounted income in the guise of ‘IP collection advances’ in the account of MH. 4.5 Based on these facts, Ld. AO alleged that the profit of Rs.1323.09 Lacs as earned by MH was not acceptable, this beingonly the second year of start of hospital. In comparison, MMHRC had medical equipment of more than 181 Crores whereas MH had only 3.97 Crores worth of medical equipment. The comparative analysisbetween MMHRC and MH was tabulated as under: - S.No. Financial Parameters for FY 2013-14 MMHRC, Madurai (in Rs.) As % of turnover Meenakshi Hospital, Thanjavur (in Rs.) As % of turnover 1 Turn Over 229,22,70,873 63,11,37,009 2 Cash at locker 255,69,11,919 111.54 59,24,16,363 93.86 3 IP collection 85,10,26,583 37.13 18,64,94153 29.55 4 IP Collection 140,75,62,997 61.40 25,61,81,454 40.59 5 OP Collection 31,92,18,205 13.93 7,19,88,742 11.41 6 Pharmacy sales 55,98,06,651 24.42 9,26,83,624 14.69 7 Purchase of materials 58,29,51,503 25.43 111,937,975 17.74 8 Purchase of 40,50,14,324 17.67 7,43,48,961 11.78 9 Consultation fees 26,37,87,099 11.51 4,13,48,428 6.55 10 EB Charges 4,69,74,972 2.05 1,46,34,048 2.32 11 Visiting fees 2,08,18,201 0.91 22,97,292 0.36 12 Interest 9,19,95,780 4.01 1,73,17,863 2.74 13 Salary + Salary to 19,58,46,158 8.54 6,11,72,230 9.69 14 Depreciation 11,30,81,548 4.93 5,36,79,080 8.51 15 Ins. premium paid 23,05,302 0.10 3,40,401 0.05 16 Profit 14,04,25,993 6.13 13,23,09,854 20.96 17 Medical equipment 181,92,69,391 79.37 3,97,68,459 6.30 On the basis of above tabulation, it was observed by Ld. AO that MH which had just started in the year 2013 earned profit of 20.96% whereas the well-established MMHRC earned profit of 6.13% during this year. Therefore, the assessee had introduced unaccounted income in this year also, as done in FY 2014-15, in the accounts of MH. Further, MMHRC was earlier showing profit of more than 10%, however, in the year of ITA Nos.2265 & 2266/Chny/2019 & CO No.16/Chny/2020 - 7 - inception of MH, the profits were reduced by about 50% which only confirms the search findings of manipulation of books of accounts and financial statements of the assessee as well as the trust which runs MMHRC to show more income from MH which would entitle the assessee to claim higher deduction u/s 80IB while also siphoning-off the money of the trust indirectly though Shri T. John Rajasekhar.Finally, in the light of all these allegations, Ld. AO restricted the deduction u/s 80IB to the extent of 50% and added the balance as unaccounted income of the assessee as ‘income from othersources. 4.6 In AY 2015-16, the assessee filed regular return of income on 28.09.2015 at Rs.1376.15 Lacs which was subjected to scrutiny assessment u/s 143(3). The assessee reflected professional income of Rs.1263.63 Lacs whereas the income from MH was reflected at Rs.1.38 Lacs after claiming deduction u/s 80IB. As noted in preceding para-4.4, during the course of search action, differences were found in the two accountingsoftware maintained by the assessee and additional income of Rs.1242.12 Lacs was admitted as wellas offered in the return of income. The said amount was stated to be gifts / donations receivedfrom friends, patients etc. who visited the hospital and consultation charges received by the assessee from third parties.These receipts were stated to be obtained purely in personal individual capacity and not related to receipts of MH. The Ld. AO has also accepted the same. However, adopting the same reasoning as for AY 2014-15, Ld. AO restricted the deduction u/s 80IB to the extent of 75% and denied deduction of remaining 25% of the profits earned by MH. ITA Nos.2265 & 2266/Chny/2019 & CO No.16/Chny/2020 - 8 - 4.7 The Ld. AO made another addition of Rs.26.52 Lacs in AY 2015- 16. The same was on account of the fact that actual IP collections on 20.08.2014 were Rs.10.26 Lacs only as against Rs.56.95 Lacs as shown and therefore, the balance amount of Rs.46.68 Lacs was introduced by the assessee whichwas liable to be taxed as unaccounted cash introduced by the assessee. Since, the assessee admitted income of Rs.1262.28 Lacsinstead of Rs.1242.12 Lacs as offered during the course of search, the telescoping difference of Rs.20.16 Lacs was granted to the assessee and differential amount of Rs.26.52 Lacs was added to the income of the assessee. 4.8 Aggrieved as aforesaid, the assessee contested the additions before Ld. CIT(A) wherein the appeals were disposed-off vide common order dated 14.09.2018. Appellate proceedings 5.1 During appellate proceedings, the assessee pleaded that there was no inflation of hospital receipts in MH as alleged by Ld. AO. The difference found in two accounting software was already offered to tax and therefore, restricting the deduction u/s 80IB was not justified. It was also submitted that the entire action of Ld. AO was based on the suspicion that the funds of MMHRC were siphoned-off in the form of payment for purchases from Monica Group; Monica Group withdrew the cash from its bank accounts and returned the cash to the assessee which in turn, was introduced as MH hospital receipts. The assessee submitted that the allegation was without any evidences. The attention was drawnto the fact that subsequent to the search, Shri T. John Rajasekhar filed an application before Income Tax ITA Nos.2265 & 2266/Chny/2019 & CO No.16/Chny/2020 - 9 - SettlementCommission (ITSC) offering Rs.12 Crores as additional income on account of discrepancies in his books and bank account. Thus, no cash was returned to the assessee, as alleged by Ld. AO since the income was already admitted by that group. 5.2 The assessee also assailed the comparison of profitability between MMHRC and MH since MMHRC was a charitable organization not aimed at making profits whereas MH was a private hospital which was being run on commercial basis. Further, MH was the only super specialty hospital in Tanjore and hence there was no competition resulting into higher margins / profitability. 5.3 The assessee also submitted that the difference of Rs.1242.12 Lacs as found between the two software was for the entire period i.e., from 01.04.2014 to 26.11.2014 (date of search). This amount was ultimately reconciled at Rs.1262.28 Lacs and offered to tax in the return of income. The difference of Rs.46.68 Lacs was part and parcel of total difference of Rs.1242.12 Lacs found for the entire period. Therefore, separate addition on account of difference of a particular day, included in the total year, was unwarranted. 5.4 The assessee also raised a plea that in the absence of any seizedmaterial, Ld. AO had no jurisdiction to assessthe income u/s 153A. However, this plea was rejected by ld. CIT(A), inter-alia, on the ground that the time limit to issue notices u/s 143(2) had not expired. 5.5 The Ld. CIT(A), after considering assessee’s submissions, noted that there were two types of software installed by the assessee i.e., one for the hospital receipts and control which was called as ‘Backbone software’ and other for accounting purposes which was called the ‘Tally ITA Nos.2265 & 2266/Chny/2019 & CO No.16/Chny/2020 - 10 - software’. The difference in total receipts in the two accounting software was Rs.1242.12 Lacs. This difference was already admitted by the assessee and amount of Rs.1262.28 Lacs was offered in the return of income. Except for the said difference of Rs.1242.12 Lacs, there was no other evidence / information to show that the assessee had been receiving income from other sources or had been inflating hospital receipts in order to claim higher deduction u/s 80IB. The main reason for Ld. AO to disallowpart of deduction was the mere suspicion that the amounts were siphoned-off from MMHRC in the form of purchase of medicines from Monica Group and the cash came back to the assessee which was introduced in MH as hospital receipts. However, the entire issue of disallowance of part of 80-IB(11C) deduction revolved around suspicion only without there being any concrete evidences. 5.6 The Ld. CIT(A) further noted that there was no evidence that the money paid by MMHRC was returned to the assessee. Apparently, there were no confessions/statements in this regard and therefore, it was not possible to hold that any part of the hospital receipts of MH represent the amounts siphoned-off from MMHRC, Madurai and routed through the Monica Group. This was further evidenced by the fact that Shri Rajasekharfiled an application before the Hon’ble Income Tax Settlement Commission (ITSC) and offered additional income of Rs.12.35 Crores for AYs 2009-10 to 2015-16 on account of various discrepancies found in his books and bank accounts. This was in addition to the regular income Rs.5.18 crores shown in the regular returns. The Hon’ble ITSC determined the additional income at Rs.22.35 Crores and in its order observed as under: - ITA Nos.2265 & 2266/Chny/2019 & CO No.16/Chny/2020 - 11 - " .......................................... However, the 245D(3) report has not made out any case with supporting evidence for returning the cash withdrawals by the Applicant to Meenakshi Mission Hospital, Madurai, eventhough both the cases were searched simultaneously..............." Therefore, the allegations of Ld. AO had no basis and it was not possible to presume that the receipts of MH have been inflated by introducing the cash as received back from Monica Group. 5.7 Regarding comparison of profitability of MMHRC and MH as done by Ld. AO, the same was held to be not correct since for effective comparison, both the entities must be operating under the same set of conditions. MMHRC was a charitable organization and registered u/s.12A of the Act and therefore, it would have low profitability. As against this, MH was run on commercial principles and therefore, the profitability of this entity would always be higher. 5.8 Finally, the action of Ld. AO in restricting the deduction u/s 80IB(11C) was held to be unjustified and Ld. AO was directed to allow full deduction to the assessee. Aggrieved, therevenue is infurther appeal before us for both the years. 5.9 The addition of Rs.26.52 Lacs as made for AY 2015-16, was partly confirmed on the ground that the difference of Rs.1242.12 Lacs was not based on the total differences found for all the 240 days from 01.04.2014 to 26.11.2014. It was only on few datesas detailed below: - Date Cash collection as per back bone software Cash collection as per Tally software Difference (3-2) Amount deposited in the HDFC current no. 50200000524500 1 2 3 4 5 08.06.2014 4,72,304 1,09,93,182 1,05,20,878 1,03,00,000 11.06.2014 12,74,103 84,99,973 72,25,770 1,02,00,000 12.06.2014 9,9,4,009 88,28,276 78,34,267 65,66,500 13.06.2017 12,17,385 71,13,383 58,95,998 55,00,000 ITA Nos.2265 & 2266/Chny/2019 & CO No.16/Chny/2020 - 12 - 02.07.2014 12,21,430 66,77,017 54,55,587 50,00,000 04.07.2014 7,89,652 40,56,254 32,66,602 29,52,000 22.07.2014 9,08,724 62,19,779 53,11,055 50,00,000 23.07.2014 9,26,524 58,11,913 48,85,389 49,50,000 24.07.2014 9,54,105 72,31,302 62,77,197 60,00,000 25.07.2014 8,43,896 66,30,607 57,86,711 54,60,000 16.09.2014 10,85,796 84,48,466 73,62,670 70,00,000 17.09.2014 11,27,999 86,68,075 75,40,076 73,34,000 17.10.2014 16,89,418 1,32,77,266 1,15,87,848 1,17,50,000 09.11.2014 4,58,530 1,43,22,071 1,38,63,541 1,37,00,000 10.11.2014 11,82,719 1,15,35,181 1,03,52,462 1,00,00,000 11.11.2014 10,81,550 63,53,460 52,71,910 50,00,000 16.11.2014 5,97,532 83,88,151 77,90,619 75,00,000 Total 1,68,25,676 14,30,54,256 12,62,28,580 12,42,12,500 Thus, the difference of Rs.46.68 Lacs as found on 20.08.2014 was not part of the difference of Rs.1242.12 Lacs. However, as against difference of Rs.1262.28 Lacs, the assessee already admitted professional receipts of Rs.1284.94 Lacs and thus, the assessee had admitted excess income of Rs.22.65 Lacs over and the above the actual difference of Rs.1262.28 Lacs which need to be telescoped.In other words, the addition of differential of Rs.24.03 Lacs was to be confirmed as against Rs.26.52 Lacs considered by Ld. AO. Aggrieved, the assessee is in further appeal before us. Our findings and Adjudication 6. Upon careful consideration of factual matrix as enumerated in the preceding paragraphs, it could be gathered that the whole case of Ld. AO hinges on the allegation that MMHRC paid amount to Monica Group in the guise of purchases which was withdrawn and paid back to the assessee. The said cash, in turn, is alleged to have been introduced in MH to inflate hospital receipts with a view to claim higher deduction u/s 80IB(11C). However, the said allegation would have no legs to stand in the light of the fact that Shri T.John Rajasekhar admitted ITA Nos.2265 & 2266/Chny/2019 & CO No.16/Chny/2020 - 13 - additionalincome of over Rs.12.35 Crores before Hon’ble Income Tax Settlement Commission (ITSC) to account for various discrepancies found in the books and bank accounts. The Hon’ble ITSC determined the additional income at Rs.22.35 Crores and in its order observed as under: " .......................................... However, the 245D(3) report has not made out any case with supporting evidence for returning the cash withdrawals by the Applicant to Meenakshi Mission Hospital, Madurai, eventhough both the cases were searched simultaneously..............." Therefore, the conclusion that the cash was returned back to the assessee could not be upheld. As rightly noted by Ld. CIT(A), except for difference in receipts in two accounting software, there was no other evidence / information to show that the assessee had been receiving income from other sources or had been inflating hospital receipts in order to claim higher deduction u/s 80IB. The difference in receipts has already been offered to tax by the assessee and the same has been accepted by Ld. AO as well. 7. To support his case, Ld. AO has drawn comparison between the two entities. However, as rightly noted by Ld. CIT(A), the profitability of the two entities could not be compared since MMHRC was a charitable entity having objects of Charity whereas MH was run on commercial basis. Pertinently, MH was a super specialty hospital having no competition. Therefore, to say that both the entities should have same profitability would not be a correct proposition. 8. It could also be seen that revenue’s appeals in case of M/s S.R. Trust (which is managing MMHRC) was subject matter of adjudication before this Tribunal vide ITA Nos. 2144/Chny.2018 &ors. order dated ITA Nos.2265 & 2266/Chny/2019 & CO No.16/Chny/2020 - 14 - 27.06.2019 for AYs 2009-10 to 2015-16. The appeals were dismissed by the bench, inter-alia, with the following observations: - We find that findings of the Id. CIT(A) are based on the appreciation of material on record. We are unable to discern from the assessment order that the Assessing Officer had made available to the assessee-trust the information available with him alleged to be against the assesses trust for the purpose of rebuttal. There is no material brought on record proving the nexus between withdrawal of the from bank account of T, John Rajasekar and the deposits made in the bank accounts of Dr. Gurusankar. Admittedly, even the said T, John Rajasekar had not admitted that money was paid back to managing trustee of the assessee trust. Even if we are to believe that said Shri. T. John Rajasekar was indulging in providing accommodation entries, it cannot be concluded that he had provided accommodation entries to trust, in the absence of any evidence to this effect. Even the materials seized does not indicate any inflation of purchase of assessee trust. The deposits in the bank account of Dr.Gurusankar stands explained, More importantly, in the proceedings before the Income Tax Settlement Commission in the case of T. John Rajasekar, the CIT gave finding that there is no supporting evidence of returning cash withdrawn by T. John Rajasekar to MMHRC. The above materials could clearly establish that there is no materials to prove the inflation of expenditure in the hands of the assessee trust. The Hon'ble Gujarat High Court in the case of PCIT vs. TejuaRohitkumar Kapadia, (2018) 94 taxmann.com 324 held that when the purchases made by the assessee were duly supported by bills and payments were made by account payee cheque and there was no evidence to show that amount was recycled back to the assessee moreover when the sales out of the purchases was accepted by the Revenue, the purchases cannot be treated as bogus. This decision of the Hon'ble Gujarat High Court was affirmed by Hon'ble Supreme Court by dismissal of SLP in PCIT vs. TejuaRohitkumar Kapadia, (2018) 94 taxmann.com 325. There is long line of authorities following the similar ratio, The facts of the present case are identical to the case of TejuaRohitkumar Kapadia (supra). In the light of the settled position of law, it cannot be concluded that assessee trust had indulged in the act of inflation of the cost of purchase of pharmacy and surgical items, Thus, the allegations of the Assessing Officer that the funds of the assessee trust have been diverted for the benefit of specified person of the assessee trust remains unsubstantiated. Therefore, it cannot be said that the benefit had accrued directly or indirectly to the managing trustee Dr. Gurusankar. Therefore, the Assessing Officer is not justified in denying exemption u/s.11 of the Act on mere surmises without any concrete evidence. The bench has held that the allegations of AO that the funds of the assessee trust have been diverted for the benefit of specified person of the assessee trust remains unsubstantiated. Therefore, it cannot be said ITA Nos.2265 & 2266/Chny/2019 & CO No.16/Chny/2020 - 15 - that the benefit had accrued directly or indirectly to the managing trustee Dr. Gurushankar. Therefore, the Assessing Officer is not justified in denying exemption u/s.11 of the Act on mere surmises without any concrete evidence. It could also be noted that the revenue’s further appeals against the aforesaid decisions have already been dismissed by Hon’ble High Court of Madras in TCA Nos. 161 to 167 of 2020 on 24.11.2020. This decision clearly supports the conclusions drawn in the impugned order before us. 9. Therefore, on the given facts and circumstances of the case, the impugned order in granting full deduction u/s 80IB could not be faulted with. Concurring with the stand of Ld. CIT(A), we dismiss revenue’s appeals for both the years. 10. Regarding addition of Rs.24.03 Lacs as sustained by Ld. CIT(A), it could be noted that there was difference of Rs.1242.12 Lacs during the entire period from 01.04.2014 to 26.11.2014 (i.e., date of search). The assessee reconciled whole of the receipts between two software and finally arrived at difference of Rs.1262.28 Lacs and offered the same to tax in the return of income. Therefore, the separate addition of difference of a particular day would not be justified since the same has to be considered to be part and parcel of total difference as offered by the assessee. Therefore, by deleting the impugned addition, we allow the cross-objection of the assessee. The separate addition, as sustained by Ld. CIT(A) in AY 2015-16 stand deleted. We order so. The assessee’s cross-objection stand allowed. ITA Nos.2265 & 2266/Chny/2019 & CO No.16/Chny/2020 - 16 - Conclusion 11. The revenue’s appeals stand dismissed whereas the assessee’s cross-objection stand allowed in terms of our order. Order pronounced on 18 th May, 2022. Sd/- (MAHAVIR SINGH) उपा01 /VICE PRESIDENT Sd/- (MANOJ KUMAR AGGARWAL) लेखासद9 /ACCOUNTANT MEMBER चे,ई/ Chennai; िदनांक/ Dated : 18-05-2022 JPV आदेशकीVितिलिपअ6ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant2. यथ /Respondent 3. आयकरआयु (अपील)/CIT(A)4. आयकरआयु /CIT 5. िवभागीय ितिनिध/DR6. गाड फाईल/GF