Disallowance made u/s 40A(2) - Slump Sale Transfer of hospital as a going concern - amount spent on projects for establishing and operating hospitals - Nature of expenditure on hospital projects as revenue or capital expenditure - Disallowance of service charges paid to a company - Disallowance of expenditure for inflow of equity - disallowance towards non-recoverable projects cost by holding that the expenditure is in the nature of revenue expenditure - disallowance of legal and professional charges by holding that the same is in the nature of capital expenditure - ITAT set aside the Disallowance/addition made - HELD THAT:- Question Nos. 1 and 4 are covered by the judgment of this Court in [2023 (10) TMI 1362 - KARNATAKA HIGH COURT]
Addition u/s 68 - bogus share application money received - cash credits, which are essentially share capital/share premium money received by the assessee - Addition both on substantive basis and protective basis - HELD THAT:- It is noticed that it is not the case of the AO that the assessee did not discharge the initial burden placed upon it with regard to the share capital/share premium money received by it. The assessee has furnished all the details relating to the investors in order to discharge the burden placed upon it u/s 68. We noticed from the record that the assessee has filed following documents in order to discharge the burden placed upon it.
From the details submitted it can be seen that the identities of share subscribers stand proved. Since they have made payments from their bank accounts through account payee cheques, these transactions cannot be treated as bogus. Since the payments have been made from of funds available with them, the credit worthiness would also stand proved. We notice that the AO has observed that these subscribers are either showing loss or meager profits and such meager profits are not commensurate with the investments made by them. However, there is no bar under the law that a person could not make investments out of borrowed funds. In the instant case, it is not the case of the AO that the applicants did not have funds available with them for making investments in the assessee company. In fact, the said investments have been routed through the bank accounts of the assessee as well as the subscribers. Further, these investments are duly reflected in their books of account.
We notice that the AO has mainly relied upon the report of investigation wing to come to the conclusion that the assessee has availed only accommodation entries. He has also referred to the non-reply of the notices issued by them and non-furnishing of details called for. But the fact would remain that the assessee has furnished the relevant details before the AO and all those details were earlier filed with either Income tax department or with Registrar of Companies, i.e., with Government authorities. Hence the authenticity of those documents could not be doubted with. When all the relevant details are available with the AO, it is the requirement that the AO should examine those documents and could reject them, only if he finds fault with those documents. We notice that the AO did not find any deficiency or fault with the evidences produced by the assessee.
17. With furnishing of all these documents, in our view, the assessee has discharged initial burden placed upon it u/s 68 of the Act by furnishing above said documents. Hence the source as well as the source of source also stands proved by the subscribers.
Whether the Assessing Officer could have made addition u/s 68 by relying upon report of investigation wing or the statement given by the alleged accommodation entry providers? - The Hon’ble Bombay High Court has held in the case of CIT vs. Orchid Industries (P) Ltd. [2017 (7) TMI 613 - BOMBAY HIGH COURT] that the addition u/s 68 could not be made once the assessee had produced the documents to prove the cash credits. It was further held that non-appearance of the share subscriber before the AO will not change this position. Assessee appeal allowed.
Nature of expenses - amount spent on projects for establishing and operating hospitals - demarcation between capital expenditure and revenue expenditure - AO treated the expenditures as capital in nature. CIT (A) and the ITAT have recorded a concurrent finding holding the expenditures as revenue in nature - HELD THAT:- Admittedly, the agreement between assessee and GHMT and DSGMC was terminated and obligations under the agreement were discharged. Though expenditure was incurred, no capital asset or advantage of ‘enduring benefit’ was brought in by the assessee after the termination of the agreement.
In Assam Bengal Cement [1954 (11) TMI 2 - SUPREME COURT], it is held that if the expenses are incurred not for the purpose of bringing in the asset or advantage for the ‘enduring benefit’ but for running the business, such expenses are treated as revenue expenditures. Therefore, the expenses incurred in entering into an agreement merely for expansion of existing business and not for setting up of a new business, are to be treated as ‘revenue expenditures’. Decided in favour of assessee.
Seeking grant of bail - offence punishable under Sections 132(1)(c), 132(1)(i) of the Central Goods and Service Tax Act, 2017 - it is submitted that the applicant has been arrested without assigning any reason to believe nor any satisfaction to justified his arrest as provided in the Code - violation of principles of natural justice - HELD THAT:- It is a settled law that while granting bail, the court has to keep in mind the nature of accusation, the nature of the evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, the circumstances which are peculiar to the accused, his role and involvement in the offence, his involvement in other cases and reasonable apprehension of the witnesses being tampered with.
Taking into account the totality of facts and keeping in mind, the ratio of the Apex Court's judgment in the case of STATE OF RAJASTHAN, JAIPUR VERSUS BALCHAND @ BALIAY [1977 (9) TMI 126 - SUPREME COURT], GUDIKANTI NARASIMHULU AND ORS. VERSUS PUBLIC PROSECUTOR, HIGH COURT OF ANDHRA PRADESH [1977 (12) TMI 143 - SUPREME COURT], RAM GOVIND UPADHYAY VERSUS SUDARSHAN SINGH AND ORS. [2002 (3) TMI 945 - SUPREME COURT], PRASANTA KUMAR SARKAR VERSUS ASHIS CHATTERJEE AND ORS. [2010 (10) TMI 1199 - SUPREME COURT] and MAHIPAL VERSUS RAJESH KUMAR @ POLIA & ANR. [2019 (12) TMI 1461 - SUPREME COURT], the larger interest of the public/State and other circumstances, but without expressing any opinion on the merits, it is opined that it is a fit case for grant of bail.
Hence, the present bail application is allowed, subject to fulfilment of conditions imposed.
Estimation of income - bogus purchases - AO has considered the profit element and estimated the income @ 12.5% - HELD THAT:- As relying on case of the assessee itself pertaining to assessment year 2011-12 we direct the AO to restrict the disallowance to the extent of 5% of the purchases. Accordingly, the appeal of the assessee is partly allowed.
Validity of Reopening of assessment u/s 147 - final assessment order has been passed during the pendency of the present petition -proceedings are illegal and without jurisdiction as sanction has been granted u/s 151 in a mechanical manner - as stated by learned counsel for respondents No. 2 to 4 that the and there is an efficacious alternative remedy to prefer an appeal
HELD THAT:- Taking into consideration the fact that the final assessment order has already been passed on 24.03.2022, therefore, in the light of the judgment passed by the Hon'ble Division Bench of this Court in the case of Smt. Kamala Ojha[2019 (6) TMI 1439 - CHHATTISGARH HIGH COURT] the writ petition cannot be entertained wherein held when there existed reason to belief which is formed on the basis of material available having nexus with the subject, writ Court ought not to have entertained the writ petition more so when assessment orders have already been passed during pendency of the writ petition, therefore, we set aside the order passed by the writ Court and relegate the writ petitioner to prefer an appeal against the reassessment order which may be filed within a period of 30 days from today.
Petition is dismissed. However, the petitioner is permitted to prefer an appeal against the reassessment order which may be filed within a period of 30 days from the date of receipt of a copy of this order. WP dismissed.
Seeking grant of anticipatory bail as per section 438 of Cr.P.C. - well organized syndicate involved in smuggling of Areca Nuts in India - lack of evidence against appellant - HELD THAT:- It is to be noted that, there might be cases booked against the applicant, there is no document to show that in any of these cases the applicant was convicted. Unless the applicant is convicted it cannot be said that he is serial law breaker.
The applicant deserves protection from arrest - Application allowed.
The Supreme Court granted bail to the appellant with conditions including depositing the passport in the trial court and providing a surety by a blood relation. The appeal was disposed of.
Valuation of sugar confectionery falling under chapter heading under 1704.90 and 1804.90 being manufactured by the appellant - individual piece weighing less than 10 grams per piece and the same are packed in 500 grams - whether such product is liable to be valued on MRP basis under Section 4A or under Section 4 of Central Excise Act, 1944? - HELD THAT:- Under the identical facts in the appellant’s own case SWAN SWEETS PVT. LTD. VERSUS COMMISSIONER OF C. EX., RAJKOT [2006 (1) TMI 269 - CESTAT, MUMBAI] it was held that wholesale pack of 500 grams to 1 kg is not retail pack and therefore taking the weight of individual piece of confectionery which is less than 10 grams will not be governed under Section 4A.
The issue is no longer res- integra, therefore, the impugned order is not sustainable, hence, the same is set aside - Appeal allowed.
Deduction u/s 80G on CSR expenditure - lower authority held that a sum does not qualify as a "donation" at all - Donation made by the assessee out of the CSR obligations as per provision of section 135 of the Companies Act, 2013 can be considered for deduction under chapter VIA u/s. 80G or not? - amendment made in the section 37(1) restricting the deduction of CSR expenditure is applicable from assessment year 2015-16 and the year under consideration is A. Y. 2020-21.
HELD THAT:- Since the said trust is registered with the Income Tax Department and therefore contributions/ donations made to the said trust were considered eligible for deduction u/s 80G of the Income Tax Act by the assessee. As the deduction allowable to the assessee company u/s 80G of the Income Tax Act was computed at Rs 17,16,540/ and the same was claimed as deduction from the total income in accordance with the provisions of chapter VI of the Income Tax Act, as the payee was recognized to accept the donations which is eligible for deduction u/s. 80G of the Act.
Whether the deduction restricted u/s. 37(1) for an expenditure while computing the income of the assessee is also restricted u/s. 80G - Under the Income Tax once the Gross total income is computed the assessee is allowed deduction under chapter VIA of the Act of the certain payments and section 80G comes under that Chapter. Thus, the deduction is allowed after the income is computed under chapter VIA. Thus, the point of disallowance u/s. 37(1) and donation is considered as deduction even if the same is disallowed while computing the total income of the assessee and the same is the case here. Thus, the point of disallowance and deduction are different. Thus, for claiming deduction u/s. 80G of the Act even if the payment is not considering while computing the income of the as per provision of section 37(1) in this case. The bench notes that section 80G(2)(iiihk) and (iiihl) specific excluded as it is evident from the extract of section 80G of the Act.
Except for contribution u/s. 80G towards Bharat Kosh and Clean Ganga fund, all other payments are eligible for donation u/s. 80G as it clear from the provision of the Act. Therefore, we are of the considered view that the deduction cannot be denied to the assessee based on the provision of the Act.
Similar view is taken by the coordinate bench in the case of First American (India) Private Limited [2020 (5) TMI 187 - ITAT BANGALORE] wherein the coordinate bench held authorities below have erred in denying claim of assessee under section 80G of the Act. We also note that authorities below have not verified nature of payments qualifying exemption u/s 80G of the Act and quantum of eligibility as per section 80G(1). Appeal of the assessee is allowed.
Unexplained cash deposits u/s 69A - SBN deposited in the bank account of the assessee is unexplained only since the same ceased to be a valid legal tender after the demonetization - HELD THAT:- On perusal of Circular F.No.225/145/2017-ITA 11 dated 09.08.2019 (enclosed as Annexure – 6 to the written submission), it is evident that AO has to examine the cash deposits made during the demonetization period in the case of businesses in accordance with the SOP laid down in the aforesaid circular. Only in cases where the assessee is unable to explain the source of the cash deposits made, can the said sum be treated as unexplained. In the instant case, it was claimed by the assessee that the entire sales made by her are recorded in the books of accounts and offered to tax. The sole reason for both AO and CIT(A) for making / sustaining the addition u/s 69A was that subsequent to 08.11.2016, the SBNs were not legal tender and assessee was not person authorized to collect SBNs. The AO and the CIT(A) has not examined the veracity of source of cash deposits.
The Bangalore Bench of the Tribunal in the case of Anantpur Kalpana i[2021 (12) TMI 599 - ITAT BANGALORE]held that accepting SBNs subsequent to 08.11.2016 cannot be sole reason for making addition under section 69A
Also in the case of ITO Vs. Sri Tatiparti Satyanarayana [2022 (3) TMI 896 - ITAT VISAKHAPATNAM] held that dealing in SBNs prior to the appointed day i.e., 31.12.2016 cannot be prohibited and the source of deposit needs to be examined.
We hold that both the AO and the CIT(A) have erred in holding that assessee, prior to the appointed day i.e., 31.12.2016, was prohibited from accepting the SBNs and addition of the same u/s 69A of the Act is warranted.
AO and the CIT(A) have not examined the source of the aforesaid cash deposits. For the limited purpose of examining the same, the issue is restored to the files of AO -Appeal filed by the assessee is allowed for statistical purposes.
Condonation of delay in issuance of notices - HELD THAT:- The date of issuance of the show cause notice is 24.03.2021 which means that the show cause notice was issued 5 to 10 years thereafter. There is no explanation whatsoever for the delay in issuance of notices to the respondents-herein.
In the circumstances, a challenge made to the show cause notices before the High Court was successful inasmuch as the action of the respondent authority was held to be belated and hit by delay and latches. Consequently, the show cause notices were quashed - the impugned order would not call for any interference in this case.
Challenge to SCN issued by the Principal Additional Director General of the Directorate of Revenue Intelligence under Section 28 read with Section 124 of the Customs Act, 1962 - the respondents would be ad idem to contend that on similar issues the proceedings are already admitted by this Court and are pending, hence, similar orders can be passed on the present proceedings - HELD THAT:- As and by way of ad-interim relief, the impugned orders dated 4 September 2023 stayed, however, liberty to the respondents to make an application for vacating the said order in the event the respondents are of the opinion that the same ought not to be continued and / or after the decision of the Supreme Court in the pending Review / Writ Petition in the case of Canon India Private Ltd. [2022 (8) TMI 888 - SC ORDER].
Denial of Foreign Tax Credit (FTC) - assessee filed requisite Form No. 67 as prescribed under Rule 128 beyond the due date prescribed u/s. 139(1) - HELD THAT:- The assessee placed on record the evidence of filing of Form No. 67 on 29-12-2022. He further submitted that this Statement refers to certain “download attachments‟. His contention was that the Certificate or Statement under Rule 128(8)(ii) actually accompanied Form No. 67. However, it could not be authentically proved that the relevant Certificate or Statement as per clause (ii) of sub-rule (8) of Rule 128 was also furnished along with Form No. 67 before 31-03-2023.
Under these circumstances, of considered opinion that it would be in the fitness of the things if the impugned order is set-aside and the matter is restored to the file of the AO for examining whether the claim of the assessee of having furnished the Certificate or Statement as per Rule 128(8)(ii) along with Form No. 67 is correct or not? If the same is found to be correct, then the benefit of tax paid by the assessee in Kazakhstan should be allowed because all other requisite conditions have been found above to have been fully satisfied. Needless to say, the assessee will be allowed a reasonable opportunity of hearing.Appeal is allowed for statistical purposes.
Deduction u/s 80P(2)(a)(i)/80P(2)(d) - interest received on fixed deposit received from Sabarkantha District Co.Op. Bank - HELD THAT:-This issue was considered by us in [2023 (4) TMI 1342 - ITAT AHMEDABAD] held that the assessee co-operative society is eligible for deduction u/s. 80P(2)(d) in respect of gross interest received from co-operative banks, without adjusting interest paid to said bank.
Also in Sabarkantha District Cooperative Milk Producers Union Ltd. [2014 (6) TMI 977 - GUJARAT HIGH COURT] found that as such the income was received from the investment in Cooperative Societies and Cooperative Bank. Considering Section 80(P)(2)(d) of the Act when the only requirement was that the income should be received from investment in Cooperative Societies and the Cooperative Bank which in the present case has been fulfilled, it cannot be said that the learned Tribunal has committed any error in deleting disallowance u/s 80(P)(2)(d) of the Act.
Thus, we hereby allow the grounds of the assessee and delete the addition made by the Assessing Office - Decided in favour of assessee.
Loss due to the fall in value of equity shares - Treatment of the loss as a business loss or capital loss - HELD THAT:- There is no dispute that the said amount is chargeable to tax as business profit. The assessee has however worked out the fall in the value of original shares amounting to Rs 2,72,36,160/- and has claimed the same as an eligible deduction while offering its income to tax. The same has however resulted in a net business loss of Rs 1,94,54,400/- which it has sought to carried forward to subsequent years. The said fall in the value has been worked out based on the market quotation in Ludhiana Stock Exchange wherein prior to the right issue, on 30/10/1992 last cum right price of the shares were Rs. 610/- per share and the first Ex-right price of the share on 11/11/1992 was Rs. 400/- per share resulting in fall in the price of the share by Rs. 210/- per share. The cum right price and ex-right price per share has not been disputed by the Revenue nor the quantum of fall in value of original shares so arrived has been disputed by the Revenue.
Facts of the present case are pari-materia with fact of the case before K.A. Patch [1970 (2) TMI 39 - BOMBAY HIGH COURT] wherein the preposition laid down in case of Miss Dhun Dadabhoy Kapadia [1966 (10) TMI 52 - SUPREME COURT] has been followed and it has been held that it would make no difference where the shares are held as stock in trade or as an investment as the profits have to be worked out in a commercial sense taking into account the relevant accounting principles.
In the instant case, the business profits have to be ascertained by ascertaining the excess of the amount of appreciation in the face value of the new shares which would be the sale proceeds of the right to the new rights shares over the amount of depreciation in the old shares which would be the same as the difference between the cum-right market value and the ex-right market value of the old shares. The assessee has rightly computed the same where right renunciation premium on 64688 rights have been determined at Rs 7781760 and depreciation in the value of the old shares have been determined at Rs 27236160/- and the net business loss of Rs 1,94,54,400/- has been claimed to be carried forward.
We accordingly set-aside the order so passed by the ld. CIT (A) and allow the ground of appeal so raised by the assessee and the AO is hereby directed to allow the carry forward of business loss to subsequent years.
Delay in issuance of SCN - proper reason for delay or not - HELD THAT:- There is no explanation whatsoever for the delay in issuance of notices to the respondents-herein.
In the circumstances, a challenge made to the show cause notices before the High Court was successful inasmuch as the action of the respondent authority was held to be belated and hit by delay and latches. Consequently, the show cause notices were quashed - the impugned order would not call for any interference in this case.
The special leave petition is dismissed on the basis of delay and latches.
Disallowance long-term capital loss from slump sale u/s 50B - Form 3CEA has not been uploaded on the Income Tax Portal - assessee submitted that it mistakenly read Form 3CEB instead of Form 3CEA and also enclosed Form 3CEA prepared by the auditor - HELD THAT:- Coordinate Bench, Hyderabad in the case of Nhance Engineering Solutions Pvt. Limited [2019 (2) TMI 2109 - ITAT HYDERABAD] dealing with the similar case of capital gain declared u/s 50B and the audit report being not filed with the return of income, allowed the claim of the assessee observing that the same has been filed during the course of assessment proceedings and further filing of report is curable even if it is not submitted along with the return of income.
Considering the fact that the assessee has e-filed the income tax return before the due date prescribed u/s 139(1) provided the details of the alleged claim in the Income Tax Return and duly furnished Form 3CEA during the course of assessment proceedings and further an affidavit has also been filed by the auditor mentioning the reason due to which the Form 3CEA was not uploaded on the E-Portal of Income Tax along with the return of income at the time of filing the return of income before the due date u/s 139(1) we are of the view that both the lower authorities ought to have treated the furnishing of Form 3CEA as a sufficient compliance for the purpose of allowing long-term capital loss claimed by the assessee u/s 50B of the Act. Decide in favour of the assessee.
Expenditure claimed as ‘overburdened charges’ - Addition made on the grounds that no agreements available for the sub-contracts; that no PAN or bank details available of persons to whom subcontract was awarded by the employees - even though res judicata is not applicable, burden is on the assessee to prove the work done by subcontractors and prove their identity and genuineness - CIT(A) deleted the said addition observing that, the assessing officer, while making the addition in the current year, relied upon the fact that the assessee company had voluntarily offered amounts for disallowances of the overburdened charges claimed as expenditure in the previous years - HELD THAT:- As there is no dispute that the assessee has been in the mining contracts, and in mining contracts, for extracting the required ore or minerals the overburden has to be removed involving expenditure, which goes on decreasing year after the year.
Generally, in the initial years it would be high and thereafter such an expenditure may get reduced substantially. Such a fact is evident in the case of the assessee company also. Expenditure on overburden removal has been made on a turnover demonstrating that such an expenditure incurred for overburden removal, was high in the earlier years and lowest in the year under consideration.
Assessee’s declaration of income of Rs. 2.76 crores and Revenue accepting the same during the year clearly shows that there were business operations in mining by the assessee during the year. When the income is accepted, the expenditure cannot be denied in toto.
Even if we go by the reasoning of the AO that the subcontractors are un- known, the fact remains that in respect of such an expenditure, TDS was affected. By no stretch of imagination could it be said that no mining work was done to earn the income. Natural inference is that for earning such expenditure by mining operations, inevitably the assessee must have incurred some overhead removal expenditure.
Thus, as no written agreements for subcontract and sub- subcontract and also fact that the subcontractor as well as the sub- subcontractor, sub-sub-unknown contractors are all related parties and the payments and withdrawals do not inspire any confidence, we are of the considered opinion that disallowance of a portion of this overhead removal charges would meet the ends of justice. Having regard to nature of expenditure and line of business of the assessee, we deem it reasonable to estimate the disallowance at 25% of such expenditure. Balance 75% is accordingly directed to be deleted. Appeal of Revenue is partly allowed.
Undisclosed/suppression of receipts - Gross receipts noted in seized document - addition is made based on exhibit 7 of Annexure AS which was seized from the premises - HELD THAT:- The revenue did not bring any records to justify the addition before us except that the receipts are more in the two years. Whereas the records of the patient and arguments of the assessee that based on the past two years performance projection of two years were made cannot be denied and the same is support the fact that past two years data exactly tallied with the records. The revenue merely argued that the document found from the assessee the assessee has to justify the revenue receipt recorded. The arguments of the revenue has no support whereas the assessee justifies the arguments submitting that since the assessee opened up two more branch and being corporate assessee prepared projection as guideline based on the actual performance of last two year has force. During the search revenue did not find from that the records of the patient maintained and consequent there upon no receipt is offered.
Considering that aspect of the case we also see that even the CIT (A) erred in directing the AO to compute the profit rate when the revenue clearly fails to justify that the impugned figure recorded on the loose paper is not an estimate but actual receipt of the assessee. Based on these observations the ground no. 2 raised by the assessee is allowed.
Assessment u/s 153A - Incriminating material found during search or not? - HELD THAT:- Addition is made is in the nature of incriminating material and in the absence of clear explanations of the assessee that the impugned page show the figure for the year under consideration is the estimate based on the past two year actual and against this explanation revenue failed to justify the addition. Based on the said explanation of the assessee we are of the considered view that since the page is not in the nature of incriminating material addition cannot be made considering the decision of the apex court in the case of Abhisar Buildwell [2023 (4) TMI 1056 - SUPREME COURT]
Commission made to medical professional or related parties to soliciting patients is inadmissible expenditure -Assessee failed to prove the genuineness of these expenses being the commission paid - assessment proceedings based on the records in the form of voucher found that the records maintained by the assessee unsatisfactory and the assessee failed to prove the genuineness of the expenditure - HELD THAT:- The deficiency in such a voucher itself says that the same has been maintained during the business of the assessee by the employees. The source of this expenditure is not under dispute. The related receipt from the patient on admission is not under dispute. Entries were duly found in the regular books. Only because of statements recorded during the search the addition cannot be made, the lower authorities failed to appreciate that even in the statement it was clarified that the expenses are being incurred and the same was justified in the statement. Looking to the nature of profession the assessee engaged it is normal practice to give such reimbursement or service charge.
As regards the TDS AO failed to establish that the assessee has controverted the provision of TDS, even though all the details of the payment were made available to the ld. AO. AO has not found out what is the amount of the default. Considering the overall facts and considering the nature of the profession of the assessee we see no reason to sustain the addition as the assessee has already recorded the relevant receipt related to expenditure and thus, when the receipt is not in doubt the related expenditure cannot be disallowed merely based on one statement.
Addition made on account of anesthesia payment to various consulting doctors made by the AO - HELD THAT:- The only concern of the revenue is that the payment has been made in cash and the TDS has not been deducted by the assessee. On this issue the bench noted that the assessee has paid the charges to the anesthesia expert as an agent of the patient. When the assessee has paid the expenditure as agent in providing service the assessee is not liable to deduct the tax as the same is merely paid as an agent of the patient. The revenue has not doubted the role of the assessee in fiduciary capacity while making the payment to the expert. As regards the payment of TDS default the bench noted the appeal of the assessee for TDS default were decided in favour of the assessee for assessment year 2017-18.
As revenue did not challenge those order where in the issue of TDS for the year under consideration has already been finalised and on the same very issue again no disallowance can be made. Based on that aspect of the case as the assessee has collected the money on behalf of someone else and there is no income on this aspect of the case. As regards the default of the assessee u/s. 40(a)(i) of the Act, the bench noted that as regards the TDS default the proceeding has already been completed and the revenue did not bring specific default, we see no reason to consider the disallowance on this aspect.
Payments had been made to a third party on behalf of the doctors - as argued payments are towards services rendered, and even if they paid to third party these are expenses of the assessee and are allowable - HELD THAT:- As the assessee did not explain the nature and purpose to the satisfaction of the ld. AO he has made the addition of Rs. 64,900/-. The ld. CIT (A) also confirmed the finding of the AO. Before us the ld. AR of the assessee submitted that the payments had been made to a third party on behalf of the doctors. Payments are towards services rendered, and even if they paid to third party these are expenses of the assessee. We do not find any force in arguments of assessee, as the assessee failed to justify the reason as to why the payment of the surgery paid the person who are not authorized. Therefore, we do not incline to interfere in the detailed finding of the lower authority.
Addition made on account of discount allowed on the bills of patient for treatment - Assessee is an approved hospital for various treatment under the medical insurance coverage and also undertake treatment on various scheme of government. Therefore, as per the scheme of the various treatment the assessee offers discount on the bills of the patient for the package, treatment duration, expenditure on surgery approved rates with the insurance company. All these aspects of the case is duly counted as receipts of the assessee. The assessee accounted the gross receipts and claimed separately the document given to the patient. We observe from the order of the lower authorities that so far as the receipt is concerned, the same is from the government, insurance company.
Considering that fact that the assessee has given discount to the patient based on the treatment, duration of treatment of patient, the scheme of the various treatment adopted by the assessee. All these receipts are duly accounted in the books of account. The respective services bills raised by the assessee is not under dispute and thus, there is no reason to disbelieve the related discount expenses claimed by the assessee based on the systematic approach as per corporate scheme of the assessee given to the patient from whom receipt is already accounted.
DR did not controvert the finding of the bench in the case of the assessee’s own case and also not brought on record any other judicial precedent contrary to the same. Thus, respectfully following the rule consistency we do not find any merits in this ground raised by the revenue.
Addition on account of suppression of receipt of X-ray - As it is the normal practice in the medical profession that once the patient is admitted he may have to undergo for X-ray many a time and he may be billed accordingly. It is also happen that due to operator error the result not up to the mark or the angle is not correct the expert order to rework the X-ray and in that process there are also chances that the film gets damaged also. Hence, the conspectus explanation granted by the assessee is to be considered and therefore, the consumption of the X-ray film with that of the overall billed amount no addition can be made. In the light of these fact and analysis of the various factual aspect of the case we respectfully the following decision of the Coordinate Bench in the case of the assessee for assessment year 2011-12 we do not find any force in the arguments of the Revenue and we are of the considered view that there is no fault in the detailed finding of the ld. CIT(A). Decided against revenue.
Unaccounted cash deposit during demonetization period - Identity and the treatment given to the patient is duly recorded and there is no adverse observation on this in the regular books of account of the assessee. Revenue cannot tax twice the same receipts, as in the regular books of account this cash receipt is duly recorded as receipt.
Based on these observations of the facts we are of the considered view that the amount deposited in the bank account though SBNs addition cannot be sustained also from the record that the books of account of the assessee are maintained and audited in the regular course of profession and in the absence of any default on this books addition is not sustainable. The Bench also noted that the ld. AO did not bring on record any concrete and conclusive evidence of back dating of entries of cash receipts or bogus receipt and not disclosing of the identity and treatment so offered. The Bench also noted that the books of account are regularly audited under the Company Act under the Income Tax Act.
There is no adverse observation in the audit report and this audited of books of account had not been rejected u/s 145(3) of the Act. Therefore, we hold that the assessee has already discharged this burden and proved in the cash deposited in the bank account in the form of demonetization currency was received and explained the cash receipt for which the same has already been accepted by the Revenue while finalizing the assessment of books of account without mentioning any default and the assessment has been completed u/s 143(3) r.w.s. 153A
Addition being advance for outsourcing medical shop at Mandsour Center (MP) on protective basis - Here we note that till the second stage of dispute of the addition has been sustained by the Revenue in the case of Shri Manish Chhaparwal to the extent of Rs. 15,00,000/- and before us the Revenue did not bring anything contrary to the findings of the ld. CIT (A) in the case of Shri Manish Chhaparwal so as to support the reasons as to why the said protective addition in the case of the assessee should sustain. Once it is already considered at the two level at the Assessing Officer and the ld. CIT (A) that related to amounting pertains to Shri Manish Chhaparwal in absence of the revenue not demonstrating before us in support we confirmed the reasoned finding of the ld. CIT (A) and we see no reason to sustain the addition.
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