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Dr. Sita Ram Sharma Versus A.C.I.T. Circle-7, Jaipur.

2016 (4) TMI 75 - ITAT JAIPUR

Bogus purchases - assessee submitted that the ld Assessing Officer had not rejected the books U/s 145(3) while enhancing the operating result through disallowance of the entire purchases - Held that:- By considering the smallness of amount of purchase of X-ray films and the Assessing Officer allowed the depreciation of X-ray machine, it is but natural that the assessee had purchased X-ray films. It is a fact that even before us, the assessee has not furnished any purchase bills but in the intere .....

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referred by the assessee is not applicable on the facts of the case of the assessee. - Decided against assessee - ITA No. 181/JP/2015 - Dated:- 12-2-2016 - SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM For The Assessee : Shri Tanuj Agarwal (CA) For The Revenue : Shri Kailash Mangal (JCIT) ORDER PER T.R. MEENA, A.M. This is an appeal filed by the assessee against the order dated 30/01/2015 of the learned CIT(A)-III, Jaipur for A.Y. 2009-10. The effective grounds of appeal are as under:- 1. That .....

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n the facts and in the circumstances of the case and in law, the ld CIT(A) grossly erred in sustaining entire disallowance in respect of purchase of X-ray films amounting to ₹ 24,919/-. 3. That on the facts and in the circumstances of the case and in law, the ld CIT(A) grossly erred in sustaining an addition of ₹ 59,700/- U/s 68 on account of various trade creditors outstanding at the balance sheet date as under:- S.No. Name of the Trade Creditor Outstanding balance at the yearend ad .....

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is against making addition on account of bogus purchases. The ld Assessing Officer has observed that on verification of books of account, it was found that no proper system/record for maintaining purchase and sale has been followed by the assessee. The assessee had shown total purchase of ₹ 13,35,806/- during the year under consideration. The assessee has not maintained stock register to establish the genuineness of the purchases made. The ld Assessing Officer summoned the following parti .....

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eport dated 13/10/2011. During the course of statement recorded of Shri Rajendra Kumar Bhargava, Marketing Manager of M/s Bhargava Hi Tech Surgimed Co. Pvt. Ltd., he sent some of the items to the assessee through challans. These challans were not verifiable from the books of account of the assessee. Shri Bhargava admitted that surgical items were sent to M/s Sharma Hospital, Chomu by challan and some of the items recorded on the challans were returned back by the hospital due to non utilization .....

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M/s Bhargava Hi Tech Surgimed Co. Pvt. Ltd., of ₹ 2,01,894/- was also disallowed and total addition of ₹ 4,62,588/- was made in the income of the assessee. 3. Being aggrieved by the order of the ld Assessing Officer, the assessee carried the matter before the ld CIT(A), who had partly confirmed the appeal on this issue by observing as under:- 5.3 I have carefully considered the findings of the AO as also the submission of the appellant. As regards purchases from M/s Devi Distributors .....

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therefore the onus was on the assessee to prove genuineness of the purchases. Simply filing of purchase bills etc. may not prove the genuineness of the purchases. In these circumstances the AO has rightly disallowed such claim and has made addition of ₹ 422209/-. As regards purchases from Bhargava Hi Tech Surgimed Co. Pvt. Ltd. amounting to ₹ 201894/- where the AO has disallowed 20% of claim it is noted that the Marketing Manager of the concern admitted to have made such sales. As re .....

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79/- is deleted. Accordingly the appellant gets relief of ₹ 40379/-. The grounds of appeal are partly allowed. 4. Now the assessee is in appeal before us. The ld AR of the assessee has submitted that the ld Assessing Officer had not rejected the books U/s 145(3) while enhancing the operating result through disallowance of the entire purchases for which he relied on the decision of Hon ble ITAT, Jaipur Bench in the case of ACIT Vs M/s Bal Kishan Nyali HUF in ITA No. 1122/JP/2011 decided on .....

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d argued that the assessee regularly purchasing goods from both the parties i.e. M/s Devi Distributors & Surgicare and Karni Enterprises. The assessee had maintained proper books of account, which were audited and also produced during the course of assessment proceedings for verification. The ld Assessing Officer had not pointed out any specific defect in the books of account. The assessee is a doctor and all the purchases have been consumed in the operations and were not meant for sale. The .....

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ssessee as per the principles of natural justice otherwise it cannot be used against it, for which he relied on the decision in the case of CIT Vs Pradeep Kumar Gupta 303 ITR 95 (Del) and CIT Vs SMC Share-brokers Ltd. 288 ITR 435 (Del). Alternatively, the AR of the assessee has argued that the assessee has better N.P. rate in the year under consideration compared to preceding year. It is not necessary that in each and every case, the addition is necessary as held by the Hon ble Jurisdictional Hi .....

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not responded. The assessee is also not able to produce the parties for verification, therefore, order of the ld CIT(A) may please be confirmed. 6. We have heard the rival contentions of both the parties and perused the material available on the record. It is undisputed fact that in response to notice U/s 131 of the Act, both the parties were not responded against the notice of the Assessing Officer. The assessee has debited purchases as expense, therefore, it is a burden cast on the assessee to .....

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s to be applied on the bogus purchases made by the assessee. Accordingly, this ground of assessee s appeal is partly allowed. 7. The 2nd ground of the assessee s appeal is against disallowance on purchase of X-ray films. The ld Assessing Officer observed that the assessee had not produced any purchase vouchers for ₹ 24,919/- for Xray films. Thus, he made addition of ₹ 24,919/- in the income of the assessee, which was challenged before the ld CIT(A), who had confirmed the addition by .....

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the X-ray machine and also claimed depreciation on it, which has been allowed by the department. Therefore, this expenditure was genuine. The ld DR has vehemently supported the order of the lower authorities. By considering the smallness of amount of purchase of X-ray films and the Assessing Officer allowed the depreciation of X-ray machine, it is but natural that the assessee had purchased X-ray films. It is a fact that even before us, the assessee has not furnished any purchase bills but in t .....

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summons U/s 131 of the Act, but which cannot be served on Devi Distributors & Surgicare, Karni Enterprises, Prabhat Infotech, Shree Ji Enterprises and Shree Laxmi Medicose. Thus the Assessing Officer made addition of ₹ 3,98,355/- in the income of the assessee U/s 68 of the Act, which was challenged by the assessee before the ld CIT(A) but the ld CIT(A) found cash creditor explained in case of M/s Bhargava Hi Tech Surgimed Co. Pvt. Ltd.. In case of Devi Distributors and Surgicare amount .....

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maining creditors namely M/s M.K. Surgicals Suppliers amounting to ₹ 22768/-, M/s Rajputana Biotech Pvt. Ltd. amounting to ₹ 1248/-, M/s Santosh Battery Services amounting to ₹ 6,200/-, M/s Shree Laxmi Medicose amounting to ₹ 4,345/- and M/s Surgimed amounting to ₹ 25,139/- total for ₹ 59,700/-. These amounts were found credited in the books of account during the assessment year under consideration and no proper explanation was furnished with the documentary e .....

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