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TMI Blog2015 (6) TMI 758X X X X Extracts X X X X X X X X Extracts X X X X ..... ing penalty arising out of the aforesaid unexplained cash credits, in proceedings u/s.143(3) and section 271(1)(c) of the Income Tax Act in short 'the Act' respectively. We proceed to deal with assessee's quantum appeal ITA 980/Ahd/2009 first. 2. The assessee is a pediatrician. He runs a hospital by the name of "Reejay Children Hospital" at Dakore. The department conducted a survey in his case on 27.2.2003. The assessee stated to have disclosed unaccounted income in the relevant previous year of Rs. 12 lac comprising suppressed professional income as well as that arising from "other sources. He filed return on 30.11.2003 stating income of Rs. 6,68,720/-. He credited the impugned sum of Rs. 3 lac in capital account as payment for obtaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 27.02.2003 is correct. However, it is equally correct that the appellant does not have any evidence in support of his contention that the same was paid in 1993. Merely because the premises were taken on rent since 1993, does not prove payment in 1993. Appellant has not disputed and has rather admitted that payment of Rs. 3,00,000/- was made to Ranchhodrai Education Trust out of unaccounted source. Only dispute is regarding the year of payment. In a situation like this and in the absence of any specific proof showing the payment to be in 1993, the first admission that the same was made out of current year's income has to be taken as correct. Regarding appellant's reliance on the decision in the case of Paul Mathew 263 ITR 101, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y his credits in question by claiming impugned payments of Rs. 3 lac to have been made while acquiring the rented hospital building in the year 1993. However, there is no evidence forthcoming from the case file whatsoever in support thereof. It is made clear that once the assessee has raised this plea of very old payment, it was incumbent for him to place on record sufficient material. His claim does not inspire confidence in these circumstances. We uphold the action of the lower authorities accordingly and reject the first substantive ground raised in this appeal. 6. The assessee's second ground challenges lower authorities action in treating his claim of expenditure incurred on hospital building repairs of Rs. 5,76,737/- as "capital" in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the same, it is very clear that expenditure is for substantially renovating the hospital and is clearly of capital nature. Claim of such an expenditure would not be admissible u/s.30, since the expenditure cannot be said to be towards current repairs. The Explanation inserted by Finance-Act, 2003 w.e.f. 1.4.2004 is only, clarificatory, as clear from use of phrase "For removal of doubts....." in the same. Appellant has submitted that since the landlord was not in a. position to carry out the renovation, it was carried out by the appellant. It was not a case where cost of repairs was undertaken to be borne by the appellant. The expenditure incurred by the appellant for renovating the hospital was thus of his own volition and was not obligat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dertaken the building repair relating to functioning of hospital business without any addition or expansion of the profit making apparatus. In these circumstances, we draw support from the hon'ble jurisdictional high court in Indian Ginning and Pressing Co. Ltd. Vs. CIT (2001) 252 ITR 77 (Guj.) and accept the assessee's arguments. We deem it fit to observe that quantum and extent of repair in absence of the abovesaid factors would not convert the impugned revenue expenditure to that of capital in nature. Thus, the assessee's claim is liable to be entertained u/s.30 of the Act under the head "current repairs" in the nature of revenue expenditure. Our this finding also takes care of the CIT(A) order invoking section 32 of the Act. So far as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 68 addition of Rs. 3 lac. Both the lower authorities have been swayed by quantum findings. The impugned addition has arisen out of a survey action. The Revenue treats the same as an instance of concealment and furnishing of inaccurate particulars of income u/s.271(1)(c) of the Act. However, we do not find any supportive evidence except assessee's statement for making the impugned addition. We reiterate the settled law that quantum and penalty proceedings are altogether separate. Each and every addition does not lead to automatic imposition of penalty. We look back in the facts of the case and find that the assessee has merely failed in proving the factum of having paid impugned sum of Rs. 3 lac at the time of tenancy rights way back in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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