ITO, New Delhi V. Dr. Sanjay Arora, New Delhi

ITA 5066/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74378 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 10-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 28-09-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RENUKA JAIN GUPTA
• Assessee Lawyers: ASHWANI TANEJA; SOMIL AGGARWAL S
• Keywords: Depreciation
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : G : NEW DELHI BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.5066/DEL/2012 ASSESSMENT YEAR : 2009-10 ITO, WARD 37(2), ROOM NO.N-404, VIKAS BHAWAN, NEW DELHI. VS. SANJAY ARORA, 103-104, ORIENTAL HOUSE, GULMOHAR ENCLAVE, COMMERCIAL COMPLEX, NEW DELHI. PAN : AAEPA7069B ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI A SHWANI TANEJA & SHRI SOMIL AGGARWAL, ADVOCATES DEPARTMENT BY : S MT. RENUKA JAIN GUPTA, SR. DR ORDER PER A.D. JAIN, JUDICIAL MEMBER: THIS IS DEPARTMENTS APPEAL FOR ASSESSMENT YEAR 2009-10 A GAINST THE ORDER DATED 30.07.2012, PASSED BY THE LD. CIT (A)-XXV III, NEW DELHI, TAKING THE FOLLOWING EFFECTIVE GROUNDS:- 1. THE LD. CIT (A) ERRED IN DELETING THE ADDITIONS MADE BY THE A.O. NOT APPRECIATING THE FACT THAT THE ASSESSEE COULD NOT RECON CILE AND EXPLAIN WITH NECESSARY DOCUMENTARY EVIDENCES THE DIFFE RENCES FOUND IN AMOUNTS CLAIMED BY THE ASSESSEE UNDER THE HEAD CUR RENT LIABILITIES W.R.T. AMOUNTS PAYABLE TO ALCHEMIST GROUP OF COMPANIES AND INFORMATION AS OBTAINED FROM ALCHEMIST GROUP OF COMPA NIES U/S 133 (6). ITA NO.5066/DEL/2012 2 2. THE LD. CIT (A) ERRED IN NOT APPRECIATING THE FACT TH AT THE EXPENSES STATED TO BE INCURRED BY THE ASSESSEE ON BEHA LF OF M/S ALCHEMIST GROUP OF COMPANIES ARE IN THE NATURE OF REI MBURSEMENT OF EXPENSES AND THE SAME WERE NOT ACCOUNTED IN THE BOOKS OF ACCOUNTS OF M/S ALCHEMIST GROUP OF COMPANIES AND HENCE THESE EXPENSES REMAINED UNEXPLAINED IN THE HANDS OF THE ASSESSEE. 3. THE LD. CIT (A) ERRED IN DELETING THE ADDITION OF RS.72,698/- MADE UNDER THE HEAD BUSINESS PROMOTION, STAFF WELFARE AND E NTERTAINMENT AS THE ASSESSEE COULD NOT PRODUCE ANY DOCUMENTARY EVIDENC E THAT THE SAID EXPENSES WERE WHOLLY AND EXCLUSIVELY INCURRED FOR THE BUSINESS OF THE ASSESSEE. 4. THE LD. CIT (A) ERRED IN RESTRICTING THE DISALLOWA NCE MADE BY THE A.O. TO 50% OF RS.1,25,255/- ON ACCOUNT OF PERSONAL U SE OF TELEPHONE, VEHICLE MAINTENANCE AND DEPRECIATION ON CAR ETC. IN ABSENCE OF ANY DOCUMENTARY EVIDENCE THAT THE SAID EXPENSES WERE WHOLLY AND EXCLUSIVELY INCURRED FOR THE BUSINESS OF THE ASSESSEE . 2. APROPOS GROUND NOS.1 AND 2, THE ASSESSING OFFICER OBSE RVED THAT THERE WERE CURRENT LIABILITIES OF ` 1,27,97,418/- AGAINST T HE NAME OF ALCHEMIST, CHANDIGARH IN THE BALANCE SHEET WITH THE ASSESSEE AS ON 3 1.03.2009. ON QUERY, THE ASSESSEE FILED DETAILS VIDE LETTER DATED 08.1 2.2011, SUBMITTING THE FOLLOWING CONFIRMATIONS OF THE ALCHEMIST GROUP OF CO MPANIES:- (I) ALCHEMIST HOSPITAL - ` 29,50,000/- (II) ALCHEMIST HOLDINGS LTD. - ` 2,23,00,000/- (III) ALCHEMIST LTD. - ` 20,00,000/- THE BALANCE AS ON 31.03.2009 ` 2,72,50,000/- 3. THE ASSESSEE ALSO FILED THE CONFIRMATIONS ALONG WITH T HE LEDGER ACCOUNTS OF THESE PARTIES. THE ASSESSING OFFICER FOUND THE RE TO BE A DIFFERENCE OF ` 1,44,52,582/- BETWEEN THE SAID AMOUN T OF ` 2,72,50,000/-, AS CONFIRMED BY THE SAID PARTIES AND THE AMOUNT OF ` 1, 27,97,418/-, SHOWN IN THE BALANCE SHEET OF THE ASSESSEE AS ON 31.03.2009. WHEN ASKED TO RECONCILE SUCH DIFFERENCE ALONG WITH DOCUMENTARY EVI DENCE, VIDE WRITTEN SUBMISSION DATED 21.12.2011, THE ASSESSEE SUBMITTED THAT T HE FUNDS WERE RECEIVED BY HIM FROM THE ALCHEMIST GROUP OF COMPANIE S FOR PURCHASE OF ITA NO.5066/DEL/2012 3 ASSETS, EXPENSES TO UPGRADE THE CLINIC AND OTHER EXPENSES DEBITED TO THEIR LEDGER ACCOUNT IN THE BOOKS OF ACCOUNT OF SWARAN DEN TAL CLINIC, THE CLINIC OF THE ASSESSEE; THAT HOWEVER, THESE FUNDS WERE NOT ACCOUNTE D FOR BY THE ALCHEMIST GROUP OF COMPANIES, PERHAPS DUE TO THEIR INT ERNAL MISCOMMUNICATION; THAT THE SAID FIXED ITEMS HAD NOT B EEN CAPITALIZED IN THE BOOKS OF SWARAN DENTAL CLINIC AND AS SUCH, THE ASSESSEE H AD ALSO NOT CLAIMED ANY DEPRECIATION THEREON; THAT THE BALANCE CONFIRMATION OF THE ALCHEMIST GROUP OF COMPANIES SHOWED THAT THEY HAD ALSO NOT CAPITALIZED SUCH ASSETS IN THEIR BOOKS AND THEY WERE YET TO ACCOUNT FOR THESE AMOUNTS IN THEIR BOOKS; THAT ALL PAYMENTS HAD BEEN RECEIVED THRO UGH BANKING CHANNELS; AND THAT ALL THE ENTRIES FOR THE RECEIPT OF THE FUND S MATCHED WITH THE BANK STATEMENTS OF THE ASSESSEE. ALONG WITH THE SAID WRITTEN SU BMISSIONS, THE ASSESSEE ALSO FILED BEFORE THE ASSESSING OFFICER THE DETAILS OF THE RECEIPTS AND RECONCILIATION THEREOF, AS FOLLOWS:- DETAILS OF AMOUNT RECEIVED FROM ALCHEMIST GROUP OF CO MPANIES DATE ALCHEMIST HOSPITAL ALCHEMIST HOLDINGS LTD. ALCHEMIST LIMITED 29.12.2008 2500000.00 3.2.2009 50000.00 3.2.2009 400000.00 19.2.2007 1000000.00 31.3.2007 1000000.00 18.3.2008 5000000.00 21.4.2008 5000000.00 2.7.2008 2500000.00 29.8.2008 1500000.00 22.9.2008 1500000.00 14.11.2008 1000000.00 25.11.2008 800000.00 16.12.2008 1500000.00 5.2.2009 2000000.00 12.3.2009 1500000.00 TOTAL 2950000.00 22300000.00 2000000.00 GRAND TOTAL 27250000.00 AS PER CONFIRMATIONS 2950000.00 22300000.00 2000000 .00 GRAND TOTAL CONFIRMATIONS 27250000.00 ITA NO.5066/DEL/2012 4 BALANCE AS PER ALCHEMIST AS ON 31.3.2009 LESS: PAID BY ALCHEMIST HOSPITALS LTD. TO DHR HOLDI NGS LTD. FOR A MACHINE, DEBITED TO SWARAN DENTAL CLINIC BUT NOT ACCOUNTED BY SWARAN DENTAL CLINIC (REFER SDC LEDGER A/C BOOKS OF ALCHEMIST HOLDINGS LTD.) LESS: AMOUNT DEBITED BY SDC IN VARIOUS YEARS BUT NO T ACCOUNTED BY ALCHEMIST 27250000 400000 26850000 FINANCIAL YEAR ANNEXURE-A 58418.32 2006-07 ANNEXURE-B 15,81,629.11 2007-08 ANNEXURE-C 1,04,26,981.00 2008-09 ANNEXURE-D 19,35,554.00 2006-07 TOTAL FOR ABOVE THREE YEARS AS PER BOOKS OF A/C OF SDC 14002582 12847418 DETAILS OF OUTSTANDING AS PER BALANCE OF SWARAN DEN TAL CLINIC AS ON 31.3.2009 (A) ALCHEMIST CHANDIGARH A/C 1,27,97,418 (B) PAYABLE TO ALCHEMIST (IN A SEPARATE LEDGER A/C) AS ON 31.3.2009 NET BALANCE AS PER SDC 50,000 1,28,47,418 4. FURTHER, THE ASSESSEE ALSO FURNISHED THE DETAILS OF THE AMOUNTS DEBITED BY HIM IN VARIOUS YEARS, BUT NOT ACCOUNTED FOR BY THE ALCHEMIST GROUP OF COMPANIES. THESE DETAILS ARE AS UNDER:- ANNEXURE A ANNEXURE A ANNEXURE A ANNEXURE A DATE PARTICULARS VCH. TYPE DEBIT 15.7.2006 EXPENSES PAYMENT 1105.00 1 6 .7.2006 EXPENSES PAYMENT 1006.00 4.10. 2006 EXPENSES PAYMENT 458.00 25.11. 2006 EXPENSES PAYMENT 516.00 1 7.12 .2006 CREDIT CARD AMERICAN EXP 41006 PAYMENT 7379 8.1. 200 7 EXPENSES PAYMENT 483.55 2.2. 200 7 EXPENSES PAYMENT 1007.00 8.2.2007 EXPENSES PAYMENT 2808.00 1 1.2.2007 TRAVELING SEMINAR CHANDIGARH PAYMENT 34933.00 8.3.2007 EXPENSES PAYMENT 6052.77 ITA NO.5066/DEL/2012 5 15. 3.2007 EXPENSES PAYMENT 2670.00 TOTAL 58418.32 ANNEXURE B ANNEXURE B ANNEXURE B ANNEXURE B 15.4.2007 RAJ DENTAL TRADERS JOURNAL 91520.00 18.4.2007 NOBLE BIO CARE IMPLANTS JOURNAL 460112.00 20.4.2007 NOBLE BIO CARE IMPLANTS JOURNAL 145648.00 2.5.2007 N.K. PATEL JOURNAL 16000.00 3.5.2007 UNICON MEDIDENT JOURNAL 13728.00 7.5.2007 N.K. PATEL JOURNAL 27850.00 9.5.2007 EXPENSES PAYMENT 1582.00 5.7.2007 N.K. PATEL JOURNAL 18075.00 25.7.2007 N.K. PATEL JOURNAL 2310.00 27.7.2007 EXPENSES PAYMENT 3189.00 2 8. 7 .2007 N .K. PATEL JOURNAL 10080.00 4.8. 2007 N .K. PATEL JOURNAL 1 6650.00 3.9. 2007 N.K. PATEL JOURNAL 1 5040 .00 25.9. 2007 EXPENSES PAYMENT 5211.00 5.10. 2007 UNICON MEDIDENT JOURNAL 41600 .00 12.10. 2007 EXPENSES PAYMENT 3250 .00 11.12. 2007 N.K. PATEL JOURNAL 9900 .00 2 1.12. 2007 UNICORN MEDIDENT JOURNAL 2 496. 00 29.12.2007 EXPENSES PAYMENT 3250.00 23.1.2008 EXPENSES PAYMENT 1745.00 6.2.2008 N.K. PATEL JOURNAL 4575.00 11.2.2008 NOBLE BIO CARE IMPLANTS JOURNAL 168682.00 10.3.2008 EXPENSES PAYMENT 8608.00 12.3.2008 EXPENSES PAYMENT 1619.11 15.3.2008 EXPENSES PAYMENT 15127.00 18.3.2008 NOBLE BIO CARE IMPLANTS JOURNAL 103123.00 24.3.2008 NOBLE BIO CARE IMPLANTS JOURNAL 199867.00 26.3.2008 EDP SERVICES JOURNAL 2142.00 27.3.2008 EXPENSES PAYMENT 100 0 0.00 28.3. 200 8 EXPENSES PAYMENT 1 5000 .00 28.3.2008 SAHNI AGENCIES P. LTD. JOURNAL 68500 .00 2 8.3.2008 RAMA COLOUR JOURNAL 5 4500. 00 28.3.2008 EDP SERVICES JOURNAL 2050 .00 29.3.2008 TRACOM SERVICE PVT. LTD. JOURNAL 13600 .00 31.3.2008 EXPENSES PAYMENT 18000 .00 31.3.2008 EXPENSES PAYMENT 7000 .00 TOTAL 1581629.11 ITA NO.5066/DEL/2012 6 ANNEXURE - C 31.3.2009 RENOVATIONS TRANSFERRED TO ALCHEMIST A/C JOURNAL 1070239.00 31.3.2009 FURNITURE & FIXTURE TRANSFERRED TO ALCHEMIST A/C JOURNAL 461873 31.3.2009 PLANT & MACHINERY TRANSFERRED TO ALCHEMIST A/C JOURNAL 492440.00 31.3.2009 VEHICLES TRANSFERRED TO ALCHEMIST A/C JOURNAL 280510.00 31.3.2009 PLANT & MACHINERY TRANSFERRED TO ALCHEMIST A/C JOURNAL 6788232.00 31.3.2009 OFFICE EQUIPMENT TRANSFERRED TO ALCHEMIST A/C JOURNAL 251975.00 31.3.2009 FIRE & SAFETY TRANSFERRED TO ALCHEMIST A/C JOURNAL 176009.00 31.3.2009 ELECTRONICS TRANSFERRED TO ALCHEMIST A/C JOURNAL 471284.00 31.3.2009 ELECTRICAL EQUIPMENTS TRANSFERRED TO ALCHEMIST A/C JOURNAL 434419.00 TOTAL 10426981.00 5. THE ASSESSING OFFICER ALSO ISSUED NOTICE U/S 133 (6) OF THE ACT TO THE ALCHEMIST GROUP OF COMPANIES, REQUISITIONING THEIR CON FIRMATIONS IN THIS REGARD. ALL THE THREE COMPANIES OF THE ALCHEMIST GROU P FURNISHED CONFIRMATIONS DATED 26.12.2011. 6. FROM THE ABOVE, THE ASSESSING OFFICER OBSERVED THAT T HE ASSESSEE HAD FAILED TO FURNISH DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CONTENTION REGARDING THE EXPENSE MADE OUT OF THE AMOUNTS RECEIVED FROM THE ALCHEMIST GROUP OF COMPANIES. IT WAS OBSERVED THAT IN THE ABSENCE OF DOCUM ENTARY/SUPPORTIVE EVIDENCE, THE CONTENTION OF THE ASSESSEE WITH REGARD TO THE EXPENSES CLAIMED TO HAVE BEEN INCURRED BY HIM ON BEHALF OF A LL THE THREE COMPANIES OF ITA NO.5066/DEL/2012 7 THE ALCHEMIST GROUP AND OUT OF THE AMOUNT RECEIVED F ROM THEM, WAS NOT ACCEPTABLE. IT WAS OBSERVED THAT THE ACCOUNTS OF THE A SSESSEE AND ALL THE THREE COMPANIES OF THE ALCHEMIST GROUP, PERTAINING TO THE RELEVANT PERIOD, REMAINED UNRECONCILED. IT WAS AS SUCH, THAT THE ASSESSING OFFICER ADDED THE AMOUNT OF ` 1,44,52,582/- TO THE INCOME OF THE ASSESSEE . 7. BEFORE THE LD. CIT (A), THE ASSESSEE CONTENDED THAT HE WAS A RENOWNED DENTIST RUNNING A DENTAL CLINIC UNDER THE NAME AND ST YLE OF SWARAN DENTAL CLINIC; THAT THE ALCHEMIST GROUP OF COMPANIES HAD DEC IDED TO TAKE OVER THE RUNNING BUSINESS OF THE ASSESSEE AND IT HAD BEEN MUTUALLY AGREED BETWEEN THE ASSESSEE AND THE SAID COMPANIES, THAT NEW PLANT AND M ACHINERY SHOULD BE INSTALLED AND THE SET UP OF THE ASSESSEE BE UPGRADED SO AS TO ENABLE HIM TO TRAIN DENTISTS FOR THE SET UP OF THE ALCHEMIST GROUP AND TO LATER TRANSFER THEM TO THE FACILITY OF ALCHEMIST; THAT THE ASSESSEE WAS TO HEAD THE NEW SET UP; THAT IN ORDER TO UPGRADE THE SET UP, THAT THE EX PENSES FOR ALL PLANT AND MACHINERY REQUIRED TO BE PURCHASED, FOR THE RESEARCH WORK TO BE DONE AND FOR UPGRADING THE SET UP SHALL BE INCURRED AND BORNE BY THE ALCHEMIST GROUP; THAT CERTAIN EXPENSES WERE INCURRED IN THE YEAR UNDE R CONSIDERATION, AS ALSO IN THE EARLIER YEARS, ON PURCHASE OF NEW PLANTS AND MA CHINERY AND FOR UPGRADATION OF THE BUSINESS; THAT THOUGH IN THE ASSESSEES BALANCE SHEET FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD SHOWN A L IABILITY OF ` 1,27,97,418/- TO ALCHEMIST UNDER THE HEAD CURRENT L IABILITIES, THE ASSESSING OFFICER HAD ADDED AN AMOUNT OF ` 1,44,52,282/-, BEI NG THE DIFFERENCE BETWEEN THE SUM OF ` 2,72,50,000/-, AS CONFIRMED BY T HE ALCHEMIST GROUP OF COMPANIES AND THE SAID AMOUNT OF ` 1,27,97,418/-, SHOW N AS CURRENT LIABILITIES BY THE ASSESSEE, AS NOT RECONCILED; THAT AS S UCH, FIRST OF ALL, THE ADDITION COULD, IN ANY CASE, NOT BE BEYOND ` 1,27,97 ,418/-, THE AMOUNT SHOWN BY THE ASSESSEE AS CURRENT LIABILITY PAYABLE TO ALC HEMIST; THAT THE ALCHEMIST GROUP OF COMPANIES HAD SHOWN THE TOTAL AMOU NT PAID TO THE ASSESSEE AS OUTSTANDING, TO BE RECOGNIZED IN THEIR BOOKS OF ACCOUNT ON COMPLETION OF THE FACILITY BY THE ASSESSEE; THAT THIS EX PLAINED THE AMOUNT OF ITA NO.5066/DEL/2012 8 ` 1,27,97,418/- SHOWN BY THE ASSESSEE AS CURRENT LIABILI TY PAYABLE TO ALCHEMIST; THAT ALCHEMIST HAD GIVEN CONFIRMATION OF T HE AMOUNT OF ` 2,23,00,000/- GIVEN BY THEM TO THE ASSESSEE AND HAD AL SO CERTIFIED THAT AN AMOUNT OF ` 1,40,38,349/- HAD BEEN INCURRED BY THE ASSESSEE TOWARDS CREATING DENTAL FACILITY ON THEIR BEHALF; THAT THEY HAD ALSO CONFIRMED THAT THE FACILITY WOULD BE RECOGNIZED IN THEIR BOOKS ON ITS CO MPLETION BY THE ASSESSEE; THAT THIS CONFIRMATION HAD BEEN SUBMITTED BY THE PART Y DIRECTLY TO THE ASSESSING OFFICER; THAT IT HAD BEEN EXPLAINED IN DETAIL TO THE ASSESSING OFFICER THAT THE ASSESSEE WAS KNOWN TO THE CHAIRMAN OF THE ALCHEMIST GROUP; THAT IT HAD BEEN EXPLAINED THAT FOR VARIOUS ST RATEGIC REASONS, FINANCIAL ASSISTANCE HAD BEEN PROVIDED TO THE ASSESSEE INTEREST FREE, TO PROCURE THE REQUIRED EQUIPMENT, MARKETING AND OTHER INCIDENTAL EXPENSES WITH A HORIZON OF 3-5 YEARS; THAT IT HAD BEEN EXPLAINED THAT THE ASSE SSEE HAD DEBITED ALL SUCH PURCHASES/EXPENSES TO THE ACCOUNT OF ALCHEMIST, BUT THE EXPENSES HAD YET TO BE RECOGNIZED BY THE COMPANIES IN THEIR BOOKS AFTER THEIR FORMAL APPROVAL BY THEIR CHAIRMAN; THAT CONFIRMATION DATED 06.12.2011, ISSUED BY M/S ALCHEMIST HOSPITALS LTD., CONFIRMING THE BALANCE OF ` 29,50,000/- AS ON 31.03.2009, ALONG WITH A COPY OF THE LEDGER ACCOUNT OF THE ASSESSEE IN THEIR BOOKS, HAD BEEN FURNISHED BEFORE THE ASSESSING OFFICER AN D WAS BEING FILED BEFORE THE CIT (A); THAT CONFIRMATION DATED 01.04.2 009, ISSUED BY M/S ALCHEMIST HOLDINGS LTD. (MAHINDRA) CONFIRMING THE BAL ANCE OF ` 2,23,00,000/- AS RECEIVABLE BY THEM FROM THE ASSESSEE AS ON 31.03.2009 , ALONG WITH COPY OF LEDGER ACCOUNT OF THE ASSESSEE FOR THE PERIOD 01.04. 2008 TO 31.03.2009, IN THEIR BOOKS, SHOWING AN OPENING DEBIT BALANCE OF ` 50 ,00,000/- AS ON 01.04.2008 PAYABLE BY THE ASSESSEE TO THEM, HAD BEEN FI LED BEFORE THE ASSESSING OFFICER AND WAS BEING SUBMITTED BEFORE THE LD. CIT (A); THAT CONFIRMATION ISSUED BY M/S ALCHEMIST LTD., CONFIRMING T HE OUTSTANDING BALANCE OF ` 20 LAC AS ON 31.03.2009 PAYABLE BY THE ASSESSEE TO THEM, ALONG WITH A COPY OF THE LEDGER ACCOUNT OF THE ASSESSEE IN TH EIR BOOKS, HAD ALSO BEEN SUBMITTED BEFORE THE ASSESSING OFFICER AND WAS BEING FILED BEFORE THE LD. CIT (A); THAT FURTHER REPLIES HAD ALSO BEEN SUBMIT TED BEFORE THE ASSESSING ITA NO.5066/DEL/2012 9 OFFICER ON 21.12.2011 AND 23.12.2011, THE CONTENTS W HEREOF HAD BEEN TAKEN NOTE OF BY THE ASSESSING OFFICER IN PARA 3 OF THE ASSESSMEN T ORDER; THAT AS SUCH, IT WAS CLEAR THAT THE ASSESSEE HAD SHOWN THE BALANC E AMOUNT AVAILABLE WITH HIM, RECEIVED FROM THE ALCHEMIST GROUP, WHICH H AD BEEN SHOWN AS A CURRENT LIABILITY AND THE ALCHEMIST GROUP HAD SHOWN T HE TOTAL AMOUNT GIVEN BY THEM TO THE ASSESSEE FROM TIME TO TIME AND HENCE, TH ERE WAS NO DIFFERENCE IN THE AMOUNT RECEIVED BY THE ASSESSEE AND SH OWN BY HIM AS CURRENT LIABILITY; THAT IT WAS NOT THE CASE OF THE ASSESSING OFFICER, EITHER THAT THE ASSESSEE WAS SHOWING A LIABILITY MORE THAN THAT SHOWN BY THE ALCHEMIST GROUP; THAT THE ASSESSING OFFICER HAD HIMSELF ISSUED NOTI CES U/S 133 (6) OF THE ACT TO THE ALCHEMIST GROUP, IN RESPONSE TO WHICH, THE ALCHEMIST GROUP HAD FILED THEIR CONFIRMATIONS; THAT IF THE ASSESSING OFF ICER ENTERTAINED ANY DOUBT, HE COULD ALWAYS HAVE MADE FURTHER INQUIRY FRO M THE ASSESSEE, RATHER THAN MAKING THE UNWARRANTED ADDITION; THAT THIS, HOW EVER, HAD NOT BEEN DONE; THAT IT WAS NOT A CASE WHERE EITHER THE IDENTIT Y OF THE CREDITORS HAD NOT BEEN ESTABLISHED, OR THEIR CREDIT WORTHINESS NOT PROVED , OR WHERE THE TRANSACTIONS WERE NOT GENUINE; THAT THE ASSESSING OFFICE R HAD MADE THE ADDITION WITHOUT APPRECIATING AND UNDERSTANDING THE ACCOUNTING ENTRIES MADE AND WITHOUT ANALYZING THE COMPLETE DETAILS PLAC ED BEFORE HIM IN EXPLANATION OF THE QUERY RAISED; THAT THE ASSESSEE HAD P RODUCED ALL RELATED BILLS/VOUCHERS AND RELEVANT LEDGER ACCOUNTS ALONG WIT H COMPLETE BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFICER, WHICH FACT STOOD C ONFIRMED BY THE ASSESSING OFFICER IN THE VERY FIRST PARAGRAPH OF THE ASSESS MENT ORDER ITSELF; THAT IT WAS EVIDENT FROM THE DETAILS OF THE AMOUNTS RE CEIVED AND EXPENSES INCURRED AND THE RECONCILIATION FILED, THAT THE ASSES SEE HAD INCURRED EXPENSES OF ` 58,418/- IN F.Y. 2006-07, OF ` 15,81,62 9/- IN F.Y. 2007-08, OF ` 1,04,26,981/- IN F.Y. 2008-09 AND OF ` 19,35,554 IN F.Y. 2006-07, TOTAL AMOUNTING TO ` 1,40,02,582/-; THAT THE DETAILS BEING BILLS/VOUCHERS, OF THE EXPENSES INCURRED, HAD ALSO BEEN FILED BEFORE THE ASSESSIN G OFFICER; THAT THE ASSESSEE WAS FILING A COPY OF INVOICE NO.DHR/KAVO/001 DA TED 06.03.2009, RAISED BY DHR HOLDINGS INDIA PVT. LTD., FOR ` 4,50,00 0/- IN THE NAME OF ITA NO.5066/DEL/2012 10 ALCHEMIST HOSPITALS LTD. BEFORE THE CIT (A); THAT HOW EVER, THE ASSESSEE HAD MADE PAYMENT OF ` 50,000/-, WHICH HAD BEEN REIMBURS ED FOR PLANT AND MACHINERY; THAT THE PAYMENT WAS MADE BY ALCHEMIST HOSP ITALS LTD. TO DHR HOLDINGS BY CHEQUE NO.669152 DATED 03.02.2009; THAT THE ASSESSEE WAS ALSO FILING COPIES OF PROFIT & LOSS ACCOUNT AND BALANCE SHEET OF THE ASSESSEE AS ON 31.03.2007 AND 31.03.2008 AND A COPY OF THE ASSE SSEES BANK ACCOUNT SHOWING THE RECEIPTS FROM THE ALCHEMIST GROUP; THAT IT WAS NOTEWORTHY THAT THE ASSESSEE HAD SHOWN THE AMOUNT TAKEN FROM THE ALCHEMI ST GROUP AND THE ALCHEMIST GROUP HAD NOT STATED THAT THE AMOUNT HAD NO T BEEN GIVEN BY THEM TO THE ASSESSEE; THAT IN ANY CASE, THE TRANSACTION WAS IN THE NATURE OF A LOAN ONLY TILL SUCH TIME AS THE ALCHEMIST GROUP DID NOT REC OGNIZE THE SAME IN THEIR BOOKS OF ACCOUNT, AND IT WAS NOT OF THE NATURE OF INC OME OF THE ASSESSEE; THAT FURTHER, THE ASSESSEE HAD ALSO NOT CLAIMED ANY EXP ENSE OR DEPRECIATION; AND THAT THERE WAS NO EVIDENCE WITH THE ASSESSING OFFICE R TO SHOW THAT THE PAYMENT WAS IN THE NATURE OF INCOME OF THE ASSESSEE. 8. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT (A) DELETED THE ADDITION OF ` 1,44,52,582/-, OBSERVING, INTER ALIA, THAT THE ASSESSE E HAD SHOWN THE BALANCE AMOUNT AVAILABLE WITH HIM RECEIVED FROM THE ALCHEMIST GROUP, WHICH HAD BEEN SHOWN AS CURRENT LIABILITY AND THE ALC HEMIST GROUP HAD SHOWN THE TOTAL AMOUNT GIVEN BY THE ASSESSEE FROM TIME T O TIME; THAT THUS, THERE WAS NO DIFFERENCE IN THE AMOUNT RECEIVED SHOWN AS CURRENT LIABILITY BY THE ASSESSEE; THAT IT WAS NOT A CASE WHERE THE IDENTITY O F THE CREDITOR WAS NOT ESTABLISHED, OR CREDITOR WAS NOT ESTABLISHED OR WHE RE THEIR CREDIT WORTHINESS WAS IN DOUBT, OR EVEN WHERE THE TRANSACTIONS WERE NOT GENUINE; THAT THE ASSESSING OFFICER HAD MADE THE ADDITION WITHOU T APPRECIATING THE ACCOUNTING ENTRIES MADE AND WITHOUT ANALYZING THE CO MPLETE DETAILS PLACED BEFORE HIM TO EXPLAIN AS TO WHY THE ASSESSEE HAD SHOWN TH E AMOUNT OF CURRENT LIABILITY AT ` 1,27,97,417.89 IN RESPECT OF THE ALCHEMIST GROUP, AS AGAINST THE AMOUNT CONFIRMED BY THEM AT ` 2,72,50,0 00/-; THAT ALL RELEVANT BILLS, VOUCHERS, AND LEDGER ACCOUNTS, WITH COMPLETE BO OKS OF ACCOUNT HAD ITA NO.5066/DEL/2012 11 BEEN PRODUCED BEFORE THE ASSESSING OFFICER, WHICH THE A SSESSING OFFICER HAD HIMSELF CONFIRMED IN THE ASSESSMENT ORDER; THAT NONE OF THE CREDITORS HAD STATED THAT THE AMOUNT HAD NOT BEEN GIVEN TO THEM BY THE ASSESSEE; THAT IN ANY CASE, IT COULD BE SAID THAT THE TRANSACTION WAS IN THE NATURE OF A LOAN ONLY TILL THE TIME THE ALCHEMIST GROUP DID NOT RECOG NIZE IT IN THEIR BOOKS OF ACCOUNT; THAT THE ASSESSEE HAD NOT CLAIMED ANY EXPENSE O R DEPRECIATION ON THE FUNDS UTILIZED, WHICH HAD BEEN GIVEN TO HIM BY T HE ALCHEMIST GROUP; THAT IN ANY CASE, IT WAS NOT THE INCOME OF THE ASSESSEE; THAT THERE WAS NO EVIDENCE OR MATERIAL WITH THE ASSESSING OFFICER TO THE CONTRARY; AND THAT AS SUCH, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN PRESUMING IT TO BE THE INCOME OF THE ASSESSEE. 9. BEFORE US, THE LD. DR HAS CONTENDED THAT THE LD. C IT (A) HAS ERRED IN DELETING THE ADDITION CORRECTLY MADE BY THE ASSESSING O FFICER; THAT WHILE DOING SO, THE LD. CIT (A) FAILED TO APPRECIATE THAT THE ASSESSEE HAD REMAINED UNABLE TO RECONCILE AND EXPLAIN WITH DOCUMENTARY EV IDENCE, THE DIFFERENCE FOUND BY THE ASSESSING OFFICER IN THE AMOUNTS CLAIMED B Y THE ASSESSEE AS CURRENT LIABILITY WITH REGARD TO THE AMOUNTS PAYABL E TO THE ALCHEMIST GROUP OF COMPANIES AND THE INFORMATION AS OBTAINED BY THE A SSESSING OFFICER FROM THE ALCHEMIST GROUP U/S 133 (6) OF THE ACT; THAT THE LD. CIT (A) FAILED TO APPRECIATE THAT THE EXPENSES WHICH THE ASSESSEE STATED TO HAVE INCURRED ON BEHALF OF THE ALCHEMIST GROUP, WERE IN THE NATURE OF REIMBURSEMENT OF EXPENSES AND THAT THE SAME HAD NOT BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNT OF THE ALCHEMIST GROUP, DUE TO WHICH REASON, THESE EXPENSES REMAINED UNEXPLAINED IN THE HANDS OF THE ASSESSEE; THAT THE LD. CIT (A) FAILED TO APPRECIATE THAT THE ASSESSEE HAS NOT BROUGHT A NY DOCUMENTARY EVIDENCE TO PROVE THE ALLEGED EXPENSES INCURRED BY H IM ON BEHALF OF THE ALCHEMIST GROUP; THAT THE LD. CIT (A) ALSO FAILED TO APPRECIATE THAT THE ASSESSEE MISERABLY FAILED TO RECONCILE THE ACCOUNTS OF TH E ASSESSEE AND THE ALCHEMIST GROUP; AND THAT THE LD. CIT (A) HAS WRONGLY ARRIVED AT THE CONCLUSION THAT THE AMOUNT IN QUESTION WAS NOT THE INC OME OF THE ASSESSEE ITA NO.5066/DEL/2012 12 AND THAT IT WAS IN THE NATURE OF A LOAN, WITHOUT REC ORDING ANY FINDING AS TO HOW SUCH CONCLUSION WAS REACHED. 10. ON THE OTHER HAND, SUPPORTING THE IMPUGNED ORDER , THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT IN THE PRESENT MATTER, NO ADDITION U/S 68 OF THE ACT HAS BEEN MADE, NOR DID THE ASSESSING OFFICER STAT E THAT THE INGREDIENTS OF THE PROVISIONS OF SECTION 68 DID NOT STA ND FULFILLED; THAT THE MATTER IS ONLY OF RECONCILIATION; THAT SINCE NO EXPEN SE HAS BEEN CLAIMED BY THE ASSESSEE, NO DISALLOWANCE IS POSSIBLE; THAT IN RESPONSE TO THE NOTICE U/S 133 (6) OF THE ACT, THE ALCHEMIST GROUP DULY FILED C ONFIRMATIONS BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER DID NOT MAKE AN Y FURTHER INQUIRY WITH THE ASSESSEE, IF HE WAS ENTERTAINING ANY DOUBT WITH REGARD TO THE RECITALS THEREIN; AND THAT RATHER, THE ASSESSING OFFICER WENT ON TO MAKE THE ADDITION ILLEGALLY, WHICH WAS RIGHTLY DELETED BY THE LD. CIT (A). 11. HAVING HEARD THE PARTIES IN THIS REGARD, WE FIND THAT ON QUERY BY THE ASSESSING OFFICER, THE ASSESSEE FILED ALL DETAILS AND DOCUME NTARY EVIDENCE IN THE SHAPE OF BILLS/VOUCHERS ALONG WITH COMPLETE BOOKS O F ACCOUNT. AS PER THE ASSESSMENT ORDER ITSELF, THESE WERE EXAMINED. THE ASSESSING OFFICER ISSUED NOTICES U/S 133 (6) TO THE ALCHEMIST GROUP OF COMPANIE S, IN RESPONSE TO WHICH, THEY DULY FILED THEIR CONFIRMATIONS. THEY CON FIRMED THE AMOUNT OF ` 2,72,50,000/-, WHEREAS THE CURRENT LIABILITY SHOWN BY THE ASSESSEE WAS OF ` 1,27,97,417.89. THE DIFFERENCE BETWEEN THE TWO, AMO UNTING TO ` 1,44,52,282/-, WAS ADDED BY THE ASSESSING OFFICER. AT T HE OUTSET, ADDITION, IF ANY, AS RIGHTLY OBSERVED BY THE LD. CIT (A), COULD H AVE BEEN ONLY TO THE EXTENT OF THE LIABILITY SHOWN, I.E., OF THE AMOUNT O F ` 1,27,97,417.89. BE THAT AS IT MAY, EVEN THE SAID CURRENT LIABILITY WAS DULY EX PLAINED. 12. APB 1-8 IS A COPY OF THE LETTER DATED 02.08.2011 ALONG WITH COPY OF RETURN, COMPUTATION OF INCOME, BALANCE SHEET WITH RE LEVANT SCHEDULES, PROFIT & LOSS ACCOUNT AND TAX AUDIT REPORT FILED BY THE ASSESSE E WITH THE ASSESSING OFFICER. PARA 12 OF THE LETTER STATES THAT THE ACCOUNTS WERE BEING ITA NO.5066/DEL/2012 13 PRODUCED FOR VERIFICATION BY THE ASSESSING OFFICER, AS R EQUIRED. THE ASSESSING OFFICER, IN THE FIRST PARA OF THE ASSESSMENT ORDER, ACKN OWLEDGES THE ASSESSEE HAVING FURNISHED HIS BOOKS OF ACCOUNT, BILLS AND VOUCH ERS. IN THE BALANCE SHEET AS ON 31.03.2009 (APB-6), ` 12,79,07,417.89 HAS BEEN SHOWN UNDER THE HEAD CURRENT LIABILITIES. APB 9-30 IS A COPY OF THE ASSESSEES REPLY DATED 26.08.2011 FILED BEFORE THE ASSESSING OFFICER, GIVING T HE DETAILS OF THE VARIOUS EXPENSES DEBITED TO THE PROFIT & LOSS ACCOUNT, A LONG WITH COPIES OF LEDGER ACCOUNTS OF VARIOUS EXPENSES, LIKE REPAIRS AND MA INTENANCE, STAFF WELFARE, TELEPHONE EXPENSES AND VEHICLE MAINTENANCE E XPENSES, ETC. APB 32-40 IS A COPY OF REPLY DATED 08.12.2011 FILED BY T HE ASSESSEE BEFORE THE ASSESSING OFFICER IN RESPONSE TO NOTICE U/S 142 (1) OF THE ACT. THIS REPLY ALSO CONTAINS THE CONFIRMATIONS OF THE ALCHEMIST GROUP OF C OMPANIES FOR THE AMOUNT TOTALING TO ` 2,72,50,000/-, ALONG WITH COPI ES OF LEDGER ACCOUNTS OF THE ASSESSEE, AS APPEARING IN THEIR BOOKS. APB 44-54 IS A COPY OF THE ASSESSEES REPLY DATED 21.12.2011 FILED BEFORE THE ASSESSIN G OFFICER IN RESPONSE TO NOTICES DATED 14.12.2011 AND 20.12.2011. THIS REPLY CONTAINS THE DETAILS OF AMOUNTS RECEIVED FROM THE ALCHEMIST GRO UP, THE DETAILS OF THE EXPENSES INCURRED BY THE ASSESSEE AND RECONCILIATION OF T HE DIFFERENCE OF ` 1,44,52,582/-, BETWEEN THE CONFIRMATIONS FILED AND T HE CURRENT LIABILITY CLAIMED IN THE BALANCE SHEET. APB 55-56 IS A COPY OF INVOICE NO. DHR/KAVO/001, DATED 06.03.2009, RAISED BY DHR HOLDI NGS INDIA PVT. LTD., FOR ` 4,50,000/-, IN THE NAME OF ALCHEMIST HOSPITALS LTD. IT SHOWS PAYMENT OF ` 50,000/- MADE BY THE ASSESSEE, WHICH WAS REIMBURSED FOR PLANT AND MACHINERY, AND EVIDENCE OF PAYMENT BY CHEQUE NO.669 152 DATED 03.02.2009 BY ALCHEMIST HOSPITALS LTD. TO DHR HOLDINGS FOR ` 4 LAC. APB 60 IS A CERTIFICATE/CONFIRMATION FROM ALCHEMIST HOLDINGS L TD., CONFIRMING HAVING ADVANCED A SUM OF ` 2,23,00,000/- TO THE ASSESSEE DURING THE PERIOD FROM 18.03.2008 TO 12.03.2009 BY DIFFERENT CHEQUES DRAWN ON HDFC BANK AND ALSO CERTIFYING THAT THE ASSESSEE HAD INCURRED A SUM OF ` 1,40,38,349/- AS ON 31.03.2009, TOWARDS CREATING DENTAL FACILITIES ON BEH ALF OF ALCHEMIST HOLDINGS LTD. OUT OF THE ABOVE AMOUNT AND THAT THE BALANCE OF ` 82,61,651/- ITA NO.5066/DEL/2012 14 WAS OUTSTANDING AND ALSO THAT THE FACILITY WOULD BE RE COGNIZED IN THE BOOKS OF ALCHEMIST HOLDINGS LTD. ON COMPLETION THEREOF BY T HE ASSESSEE. APB 61 IS A CHART OF TELEPHONE EXPENSES INCURRED, SHOWING THE PL ACES WHERE THE TELEPHONES WERE INSTALLED/USED, ALONG WITH NUMBER-WISE CHART OF TELEPHONE AND THE NAME OF THE PERSON USING THE SAME. THE TELEPHO NE NUMBERS HAVE ALSO BEEN GIVEN. APB 62-73 IS A CHART OF REPAIR AND M AINTENANCE EXPENSES ALONG WITH MAJOR BILLS OF EXPENSES, SHOWING THE EXPENSES TO HAVE BEEN INCURRED MOSTLY FOR PETROL, PARKING, TOLL TAX, NEW B ATTERY AND TUBE, ETC., INCIDENTAL TO THE CARRYING ON OF THE BUSINESS OF THE ASSESSEE. APB 74-80 IS A COPY OF THE ASSESSEES BANK ACCOUNT WITH HDFC BANK, DEBI TING THE PAYMENTS RECEIVED BY THE ASSESSEE FROM THE ALCHEMIST GROUP. APB 81-85 IS A COPY OF LEDGER ACCOUNT OF BUSINESS PROMOTION AND ENTERTAINMENT EXPENSES IN THE BOOKS OF THE ASSESSEE. APB 86 IS A COPY OF CONFIRMATION F ROM ALCHEMIST HOSPITALS LTD., CERTIFYING THAT SWARAN DENTAL CLINIC HAD A DEBIT BALANCE OF ` 29,50,000/- IN THE BOOKS OF ALCHEMIST HOSPITALS, AS ON 3 1.03.2009. APB 87 IS A COPY OF CONFIRMATION FROM ALCHEMIST LTD., CERTIFY ING THAT SWARAN DENTAL CLINIC HAD A DEBIT BALANCE OF ` 20 LAC, AS ON 31.03. 2007, IN THE BOOKS OF ALCHEMIST LTD. APB 88 IS A CONFIRMATION FROM ALCHEMI ST HOLDINGS LTD. CERTIFYING THAT SWARAN DENTAL CLINIC HAD A DEBIT BA LANCE OF ` 50 LAC, AS ON 31.03.2008 AND OF ` 2,23,00,000/- AS ON 31.03.2009 I N THE BOOKS OF ALCHEMIST HOLDINGS LTD. APB 89-95 IS A COPY OF BALANCE SHEET AND PROFIT & LOSS ACCOUNT ALONG WITH SCHEDULES OF ALCHEMIST LTD. FOR ASSESSMENT YEAR 2006-07, AS ON 31.03.2007. APB 96-112 IS A COPY OF T HE AUDITORS REPORT, BALANCE SHEET AND PROFIT & LOSS ACCOUNT ALONG WITH S CHEDULES OF ALCHEMIST HOSPITALS LTD. FOR F.Y. 2008-09, AS ON 31.03.2009. APB 113-125 IS A COPY OF AUDITORS REPORT, BALANCE SHEET ALONG WITH SCHEDULES AND CASH FLOW STATEMENT OF ALCHEMIST HOLDINGS LTD. FOR F.Y. 2007-08 AS ON 31.03.2008. APB 21-26 IS A COPY OF SCHEDULE FORMING PART OF THE BALA NCE SHEET OF ALCHEMIST HOLDINGS LTD., FOR LOANS AND ADVANCES FOR F.Y. 2007-08 , SHOWING AMOUNT GIVEN BY THEM TO THE ASSESSEE AT ` 50 LAC AND FOR F.Y. 2008-09 AT ` 2,23,00,000/-. APB 127 IS A COPY OF SCHEDULE OF LOAN S AND ADVANCES IN THE ITA NO.5066/DEL/2012 15 BOOKS OF ALCHEMIST LTD. SHOWING AN AMOUNT OF ` 20 LAC AS GIVEN BY THEM TO THE ASSESSEE DURING F.Y. 2006-07. APB 128 IS A COPY OF S CHEDULE OF LOANS AND ADVANCES FORMING PART OF BALANCE SHEET AS ON 31.03.20 09, OF ALCHEMIST HOSPITALS LTD., SHOWING AN ADVANCE OF ` 29,50,000/- MA DE BY THEM TO THE ASSESSEE. APB 129 IS A COPY OF DETAILS OF EXPENSES FOR THE PERIOD FROM 01.04.2007 TO 31.03.2008, INCURRED BY THE ASSESSEE FOR AND ON BEHALF OF THE ALCHEMIST GROUP OF COMPANIES, SHOWING EXPENSES OF ` 15,8 1,629/-. APB 130 IS A COPY OF BALANCE SHEET OF SWARAN DENTAL CLINIC, A S ON 31.03.2008, SHOWING AN AMOUNT OF ` 34,24,357/- AS OUTSTANDING, PAY ABLE BY THE ASSESSEE. APB 131 IS A COPY OF THE PROFIT & LOSS ACCOUNT O F SWARAN DENTAL CLINIC FOR THE YEAR ENDED 31.03.2008. APB 132 IS A C OPY OF EXTRACT FROM THE TAX AUDIT REPORT IN FORM 3CB, U/S 44AB OF THE IT ACT , IN THE CASE OF SWARAN DENTAL CLINIC, FOR F.Y. 2007-08. APB 133-134 ARE TH E DETAILS OF EXPENSES INCURRED BY THE ASSESSEE DURING THE PERIOD FROM 01.04 .2006 TO 31.03.2007. APB 135 IS A COPY OF THE BALANCE SHEET OF SWARAN DEN TAL CLINIC AS ON 31.03.2007, SHOWING AN AMOUNT OF ` 5,986.68 AS PAYABL E TO ALCHEMIST. APB 136 IS A COPY OF PROFIT & LOSS ACCOUNT OF SWARAN DENTA L CLINIC FOR THE YEAR ENDED 31.03.2007. APB 137 IS A COPY OF SCHEDULE-I TO THE BALANCE SHEET OF SWARAN DENTAL CLINIC AS ON 31.03.2007, SHOWING THE FI XED ASSETS AS ON 31.03.2007. ALL THESE DOCUMENTS ARE REPORTED TO HAVE BEEN FILED BEFORE THE ASSESSING OFFICER. THERE IS NO DENIAL TO THIS. 13. TO REITERATE, THE ASSESSING OFFICER HAS HIMSELF STATED IN THE ASSESSMENT ORDER THAT THE DETAILS FILED BY THE ASSESSEE WERE EXAMINED BY HER. ALL THE THREE COMPANIES OF THE ALCHEMIST GROUP D ULY FURNISHED CONFIRMATIONS DATED 26.12.2011 BEFORE THE ASSESSING OFFI CER ON QUERY U/S 133 (6) OF THE ACT. HOWEVER, THE ASSESSING OFFICER OBSE RVED THAT SINCE THE ASSESSEE HAD FAILED TO FURNISH DOCUMENTARY EVIDENCE IN S UPPORT OF HIS STAND REGARDING THE EXPENSES MADE ON BEHALF OF THE ALCHEMIST GROUP, SUCH STAND WAS NOT ACCEPTABLE AND THAT THE ACCOUNTS OF ALL THE T HREE COMPANIES OF THE ALCHEMIST GROUP FOR THE RELEVANT PERIOD REMAINED UNR ECONCILED. THESE ITA NO.5066/DEL/2012 16 OBSERVATIONS OF THE ASSESSING OFFICER, IT IS SEEN, ARE NOT SUSTAINABLE EITHER ON FACTS, OR IN LAW AND THE LD. CIT (A) HAS CORRECTLY DE CIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE. 14. THE ASSESSEE HAS INCURRED THE FOLLOWING EXPENSES FOR F .Y.S 2006-607 TO 2008-09:- (IN `) F.Y. 2006-07 - 58,418/- F.Y. 2006-07 - 19,35,554/- F.Y. 2007-08 - 15,81,629/- F.Y. 2008-09 - 1,04,26,981/- TOTAL - 1,40,02,582/- ======== THOUGH THESE EXPENSES WERE INCURRED AND DEBITED, FOR AND ON BEHALF OF THE ALCHEMIST GROUP, BY SWARAN DENTAL CLINIC, THE PROPRIETORSHIP CLINIC OF THE ASSESSEE, THEY WERE NOT ACCOUNTED FOR BY THE ALCHEM IST GROUP OF COMPANIES. IT REMAINS UNDISPUTED THAT BILLS/VOUCHERS OF THESE EXPENSES WERE DULY FURNISHED BEFORE THE ASSESSING OFFICER. IN THE CONF IRMATIONS FILED BY ALL THE THREE COMPANIES OF THE ALCHEMIST GROUP, NONE OF T HEM DENIED HAVING REIMBURSED THESE AMOUNTS TO THE ASSESSEE, THOUGH THESE AMOU NTS WERE NOT RECOGNIZED BY THEM IN THEIR BOOKS OF ACCOUNT. THE ASSE SSEE, IT IS PERTINENT, DID NOT CLAIM ANY EXPENSE OR DEPRECIATION CONCERNING THE FUNDS UTILIZED, AS GIVEN TO HIM BY THE ALCHEMIST GROUP OF COMPANIES. ANY HOW, IT CANNOT AT ALL BE SAID THAT SUCH RECEIPT WAS IN THE NATURE OF THE ASSESSE ES INCOME AND NO EVIDENCE WHATSOEVER TO THE CONTRARY WAS BROUGHT ON RE CORD BY THE ASSESSING OFFICER. THE STAND OF THE ASSESSEE THAT THE ASSESSEE AND THE ALCHEMIST GROUP HAD AGREED FOR THE TAKE OVER OF THE RUNNING B USINESS OF THE ASSESSEE BY ALCHEMIST, WAS NEVER QUESTIONED BY THE ASSESSING OFFIC ER. IT WAS IN PURSUANCE OF THIS AGREEMENT, THAT NEW PLANT AND MACHI NERY WAS DECIDED TO ITA NO.5066/DEL/2012 17 BE INSTALLED AND THE SET UP OF THE ASSESSEE WAS DECIDED T O BE UPGRADED, SO AS TO ENABLE TRAINING OF DENTISTS. IT WAS DECIDED THAT THE ASSESSEE WOULD HEAD THE NEW SET UP UNDER THE ALCHEMIST GROUP. THE RE SEARCH WORK REQUIRED FOR THE UPGRADATION OF THE SET UP WAS TO BE DONE BY T HE ALCHEMIST GROUP. PLANT AND MACHINERY WERE REQUIRED TO BE PURCHASED AN D THE EXPENDITURE ON SUCH PURCHASE OF PLANT AND MACHINERY AND ON THE UPGRA DATION OF THE SET UP WAS ALSO TO BE INCURRED BY THE ALCHEMIST GROUP. THE ASSE SSEE RECEIVED INTEREST FREE FINANCIAL ASSISTANCE FROM THE ALCHEMIST GR OUP FOR PURCHASE OF THE REQUIRED EQUIPMENT, MARKETING AND OTHER INCIDEN TAL EXPENSES, WITH A HORIZON OF 3-5 YEARS. THE ASSESSEE SHOWED SUCH AMOUNT AS C URRENT LIABILITIES, HAVING DEBITED ALL THE PURCHASES/EXPENSES TO THE ALCHEM IST ACCOUNT IN HIS BOOKS OF ACCOUNT. IN TURN, THE ALCHEMIST GROUP HAD SHO WN THE TOTAL AMOUNT GIVEN BY THEM FROM TIME TO TIME. THE CONFIRMATIONS F ILED BY THE ALCHEMIST GROUP BEFORE THE ASSESSING OFFICER WERE NEVER QUESTIONED BY HIM AND NO FURTHER INVESTIGATION IN THIS REGARD WAS CARRIED OUT, EVINCING THAT THE ASSESSING OFFICER WAS SATISFIED WITH SUCH RESPONSE TO THE NOT ICES ISSUED U/S 133 (6) OF THE ACT. MOREOVER, THE ASSESSING OFFICER NOW HERE ALLEGED THAT THE ASSESSEE WAS SHOWING A LIABILITY MORE AS PAYABLE, AS SHOWN B Y THE ALCHEMIST GROUP. ALSO, THE ASSESSING OFFICER DID NOT CONCLUDE THA T IT WAS A CASE OF NON- ESTABLISHING THE IDENTITY OF THE CREDITOR. THE CREDIT WORTHINESS OF THE ALCHEMIST GROUP WAS NEVER DOUBTED. EVEN THE TRANSACTIO NS WERE NOT STATED TO BE NOT GENUINE. THE RESULT ARRIVED AT BY THE ASSESSI NG OFFICER, AS SUCH, IS A RESULT OF COMPLETE MISREADING AND NON-READING OF THE VOLUMINOUS MATERIAL DOCUMENTARY EVIDENCE BROUGHT ON RECORD BY THE ASSESSEE. 15. SUCH NON-APPLICATION OF MIND BY THE ASSESSING OFFIC ER IS ALSO EVIDENT FROM THE FOLLOWING FACTS. COMPLETE DETAILS AND VOUCHE RS FOR F.Y.S 2006-07 TO 2008-09 WERE PRODUCED BEFORE THE ASSESSING OFFICER. INV OICE NO.DHR/KAVO/001 DATED 06.03.2009 (APB-55) SHOWS PURCH ASE OF ONE PIECE G-HEALZONE 2130C 1.000.0100 EQUIPMENT, FOR ` 4,50,0 00/- AGAINST BUYER ORDER NO.KGI/2009/001 DATED 22.01.2009, PLACED BY A LCHEMIST HOSPITALS LTD., ITA NO.5066/DEL/2012 18 NEW DELHI ON DHR HOLDING INDIA PVT. LTD., NEW DELHI . IN THIS INVOICE, ` 50,000/- HAS BEEN SHOWN PAID BY SWARAN DENTAL CLINIC AND ` 4 LAC HAS BEEN SHOWN AS PAID BY ALCHEMIST. ` 50,000/- HAS BEEN SHOWN AS REIMBURSED FOR PLANT AND MACHINERY. THE AMOUNT OF ` 4 LAC WAS PAID BY ALCHEMIST HOSPITALS LTD. VIDE CHEQUE NO.669152 (APB 56), DATED 03.02.20 09, DRAWN ON HDFC BANK, PANCHKULA, IN FAVOUR OF DHR HOLDINGS INDIA PVT . LTD. THE CHART OF TELEPHONE EXPENSES (APB 61) GIVES ALL POSSIBLE DETAILS O F THE NUMEROUS TELEPHONES INSTALLED AND USED. THE COPIES OF BILLS APPEN DED WITH THE CHART OF REPAIR AND MAINTENANCE EXPENSES (APB 62-73) ARE SELF -SPEAKING AS TO THE EXPENDITURE HAVING BEEN INCURRED MAINLY FOR PETROL, PARKING, TOLL TAX, NEW BATTERY AND TUBE, ETC., NECESSARY FOR THE CARRYING ON OF THE BUSINESS OF THE ASSESSEE. THE DETAILS CONTAINED IN THE ASSESSEES BANK ACCOUN T MAINTAINED WITH THE HDFC BANK (APB 74-80) ARE THE DETAILS OF TH E PAYMENTS RECEIVED BY THE ASSESSEE FROM THE ALCHEMIST GROUP. SIMILARLY, THE LE DGER ACCOUNT (APB 81-85) DEPICTS THE BUSINESS PROMOTION AND ENTERTAINMENT EXPENDITURE IN THE BOOKS OF THE ASSESSEE. EXPENSES SHOWN AT ` 15,81,629/-, FOR THE PERIOD FROM 01.04.2007 TO 31.03.2008, AS INCURRED BY THE ASSESSEE ON BEHALF OF ALCHEMIST GROUP (APB 129), ALL SHOW THE VOUCHER TYPE AND THE DATE. THE SAME IS THE POSITION FOR THE EXPENDITURE INCURRED FOR THE PERIOD FROM 01.04.2006 TO 31.03.2007 (APB 133-134). 16. THE ASSESSING OFFICER ERRONEOUSLY DID NOT GO THROUGH THESE DETAILS. THE ASSESSMENT ORDER DOES NOT CONTAIN ANY REFERENCE TO ANY O F THESE DOCUMENTS FILED BY THE ASSESSEE, THOUGH THE ASSESSING OFFICER OBSERVE D THAT THESE WERE EXAMINED. HAD THESE DETAILS BEEN EXAMINED, OBVIOUSLY, IT COULD NOT HAVE BEEN OBSERVED IN THE ASSESSMENT ORDER THAT THERE WAS ABSEN CE OF DOCUMENTARY/SUPPORTIVE EVIDENCE WITH REGARD TO THE ST AND OF THE ASSESSEE THAT HE HAD INCURRED THE EXPENSES ON BEHALF OF ALCHEM IST GROUP OUT OF THE AMOUNTS RECEIVED BY HIM FROM THEM. AS NOTED ABOVE, TH E ASSESSEES BANK ACCOUNT WITH HDFC BANK (APB 74-80), SHOWING THE PAYM ENTS RECEIVED BY THE ASSESSEE FROM THE ALCHEMIST GROUP, THE COPY OF LEDGER AC COUNT OF BUSINESS ITA NO.5066/DEL/2012 19 PROMOTION AND ENTERTAINMENT EXPENSES IN THE BOOKS OF THE ASSESSEE (APB 81-85), BALANCE SHEETS AND PROFIT & LOSS ACCOUNT OF AL L THE THREE COMPANIES OF THE ALCHEMIST GROUP FOR F.YS. 2006-07, 2007-08 AND 2008-09 (APB 89-95, 113-125 AND 92-112, RESPECTIVELY) AND THE SCHEDULES O F LOANS AND ADVANCES IN THE BOOKS OF ALL THE THREE COMPANIES OF THE ALCHEM IST GROUP, FOR ALL THE THREE YEARS (APB 126, 127 AND 128, RESPECTIVELY) WERE ALL, UNDISPUTEDLY, BEFORE THE ASSESSING OFFICER. NONE OF THESE DOCUMENTS, HO WEVER, FINDS EVEN AS MUCH AS A MENTION IN THE ASSESSMENT ORDER. STILL, THE ASSESSING OFFICER GOES ON TO HOLD THE EXPLANATION OF THE ASSESSEE TO BE UN TENABLE. 17. AND LAST, BUT NOT THE LEAST, THE ASSESSEE NOT HAVIN G CLAIMED ANY EXPENSES, RIGHTLY CONTENDED, NO DISALLOWANCE IS POSSIBLE . 18. FOR THE ABOVE REASONS, WE DO NOT FIND ANY ERROR I N THE IMPUGNED ORDER ON THIS ISSUE AND THE SAME IS HEREBY CONFIRMED. GROUND N OS.1 AND 2 RAISED BY THE DEPARTMENT ARE, THEREFORE, REJECTED. 19. APROPOS GROUND NO.3, THE ASSESSING OFFICER MADE AN A D HOC DISALLOWANCE OF ` 72,698/- ON ACCOUNT OF EXPENSES OUT OF EXPENSES CLAIMED AS BUSINESS PROMOTION EXPENSES (` 1,81,688/-), STAFF WELFA RE EXPENSES (` 75,844/-) AND ENTERTAINMENT EXPENSES OF ` 1,78,653/- (AS DEBITED IN THE PROFIT & LOSS ACCOUNT). WHILE DOING SO, THE ASSESSING OFFI CER OBSERVED THAT IN THE ABSENCE OF PROPER BILLS AND VOUCHERS, IT DID NOT ST AND PROVED THAT THE EXPENSES HAD BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE BUSINESS ACTIVITY OF THE ASSESSEE. THE LD. CIT (A) DELETED THIS ADDITION. 20. THE LD. DR HAS CONTENDED THAT THE LD. CIT (A) HA S ERRED IN DELETING THE ADDITION CORRECTLY MADE BY THE ASSESSING OFFICER IN THE ABSENCE OF DOCUMENTARY EVIDENCE IN THE SHAPE OF PROPER BILLS AND VOUCHERS, FOR WANT OF PROOF. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER. ITA NO.5066/DEL/2012 20 21. ON THIS ISSUE, THE CIT (A) HAS PLACED RELIANCE ON T HE DECISION IN SIMBHAOLI SUGAR MILLS VS. ACIT 17 SOT 19 (DEL). 22. HERE ALSO, WE DO NOT FIND THE ORDER UNDER APPEAL TO BE ERRONEOUS. THE ASSESSMENT ORDER, AS NOTED HEREINABOVE, ACKNOWLEDGES THE FACT OF PRODUCTION OF BOOKS OF ACCOUNT AND EXAMINATION THERE OF BY THE ASSESSING OFFICER. THE BOOKS OF ACCOUNT ARE UNDISPUTEDLY AUDITE D. NO DEFECT THEREIN WAS FOUND BY THE ASSESSING OFFICER. IT WAS NOT ALLEGED TH AT ANY EXPENDITURE, WHICH WAS NOT CAPABLE OF BEING CHECKED AND VERIFIED, WAS INCURRED BY THE ASSESSEE. ONLY AN AD HOC DISALLOWANCE WAS MADE, WITHOUT GIVING REASONS FOR THE AMOUNT BEING DISALLOWED. THIS DISALLOWANCE WAS ENTI RELY UNTENABLE AND WAS RIGHTLY DELETED BY THE LD. CIT (A). 23. AS SUCH, GROUND NO.3 IS REJECTED. 24. SO FAR AS REGARDS GROUND NO.4, THE ASSESSING OFFICE R FOUND THAT IN THE PROFIT & LOSS ACCOUNT, THE ASSESSEE HAD DEBITED TELEPHONE EXPENSES OF ` 1,89,680/-, VEHICLE MAINTENANCE EXPENSES OF `2,15,978 /- AND DEPRECIATION ON CAR AND MOTORCYCLE, AT ` 2,16,967/-, TOTAL AMOUNTIN G TO ` 6,22,625/-. THE ASSESSING OFFICER MADE DISALLOWANCE OF 1/5 OF THESE EXPEN SES, AMOUNTING TO ` 1,24,525, OBSERVING THAT THE ASSESSEES PERSONAL USE OF T HE TELEPHONE AND CAR COULD NOT BE RULED OUT. THE LD. CIT (A) RESTRICT ED THE DISALLOWANCE OF THE EXPENSES TO 1/10 OF THE TOTAL EXPENSES, AMOUNTING TO ` 62,262/-. 25. THE LD. DR HAS RELIED ON THE ASSESSMENT ORDER, WHERE AS THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE ON THE CIT ( A)S ORDER. 26. THE CIT (A), WE FIND, HAS PLACED RELIANCE ON THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL, DATED 29.02.2012, IN ITA NO. 2884/DEL/2010, FOR ASSESSMENT YEAR 2007-08, IN THE CASE OF SHUKAL CHAND JA IN. NO DECISION TO THE CONTRARY HAS BEEN CITED BEFORE US. THIS IS A CASE OF AN ESTIMATE VERSUS ANOTHER ESTIMATE. FINDING THE RESTRICTION OF THE DISAL LOWANCE, AS ORDERED BY THE LD. CIT (A), TO BE REASONABLE, WE SUSTAIN THE SAME . ACCORDINGLY, GROUND NO.4 IS ALSO REJECTED. ITA NO.5066/DEL/2012 21 27. GROUND NOS. 5 AND 6 ARE GENERAL, REQUIRING NO AD JUDICATION. 28. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 21.03.201 4. SD/- SD/- [S HAMIM YAHYA ] [A.D. JAIN] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 21 ST MARCH, 2014. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.