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2015 (9) TMI 956

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..... dence with reference to actual number of surgeries being done, the reasonable estimation of the AO cannot be faulted. Therefore, the bifurcation adopted by the AO in the respective years out of the total patients is however, upheld. On issue of estimation of fee received in surgery cases and non-surgery cases, it seems the amounts are on higher side. In one of the statements recorded from the patient there is a signed proforma for claim of reimbursement of medical expenditure in which surgery fee was shown at ₹ 3,500/-. Based on that, it is fairly reasonable to estimate that amount as fee received for surgery in that year. Based on the above, the receipts from surgery in AY. 2004-05 would be at ₹ 10 Lakhs (4,000 X 2,500), in AY. 2005-06 at ₹ 11,49,000/- (383 X 3,000) and in AY. 2006-07 at ₹ 6,93,000/-. The estimation submitted by assessee at our instance is based on the statement from which the surgery fee at ₹ 3,500/- could be inferred. Accepting the same, with reference to non-surgery fee also, the total receipts per year can be determined. - Decided partly in favour of assessee. Assessment u/s. 153C - Held that:- The only incriminating materia .....

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..... as an addition in this year. Agricultural Income - Held that:- There is lot of variation of the agricultural income depending on the agricultural holdings. Assessee’s husband Dr. S. Venkateswara Prasad also offered agricultural income and the same was accepted as such. Keeping that in mind and also the fact that no incriminating material was found and proceedings are u/s 153C, we are of the opinion that action of the AO cannot be upheld. He is directed to accept the agricultural income as offered by assessee. - 1717, 1718, 1719, 1744, 1745, 1746, 1747, 1748, 1749, 1750,1751, 1752, 1753, 1754, /Hyd/2011 - - - Dated:- 28-8-2015 - SHRI B. RAMAKOTAIAH AND SHRI SAKTIJIT DEY, JJ. For The Revenue : Shri Rajat Mitra, DR For The Assessee : Shri A.V. Raghu Ram, AR ORDER PER BENCH : These are appeals consequent to search and seizure operations in the case of Dr. S. Venkateswara Prasad, Tirupathi on 28-11-2007. Assessee s wife is covered under the provisions of Section 153C of the Income Tax Act [Act] consequent to certain incriminating material. All the appeals are against the orders of Commissioner of Income Tax(Appeals)-VII, Hyderabad dated 20-07-2011. Since .....

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..... claim of investment under new house u/s. 54F. Before the Ld. CIT(A), assessee contended that the capital gain is not taxable in this year and is taxable as Long Term Capital Gain in later year and benefit u/s. 54F is eligible to assessee. Ld. CIT(A) consequent to the orders in the hands of assessee s wife for the same assessment year, directed the AO to treat the capital gain as Long Term Capital Gain. beyond that CIT(A) has not given any other relief. 4.1 Assessee is contesting that CIT(A) should have allowed the complete relief. It was further contended that the development agreement was dt. 02-10-2000 and the necessary capital gains either would arise in 2001-02 or at the time of possession of the apartment in 2004-05, the same cannot be brought to tax in AY. 2003-04. 4.2 After considering the respective contentions and perusing the evidences on record, we are of the opinion that the capital gains cannot be taxed in AY. 2003-04. As seen from the order of Smt. Amruthavalli, CIT(A) s finding is as under: 7.2 It may be seen that the appellant and her husband had entered into agreement with M/s. Chaitanya Constructions, Tirupati on 02.10.2000. The said property was purcha .....

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..... . AO undertook the exercise of verifying some of the patients and has verified 20 patients out of 1,428 patients noted down in the diary for a period of four years. The year-wise break-up of the patients were 534, 511, 264 and 119. Out of these patients, the AO roughly considered some as surgery cases and some as non-surgery cases. In surgery cases, the doctor s receipt was taken at ₹ 18,000/- per patient and in non-surgery cases, ₹ 2,500/- per patient. Accordingly, AO estimated the receipt in the impugned assessment years i.e., AYs. 2004-05 to 2006-07 as under: Asst. Year Receipts from Surgery Cases Receipts from Non-Surgery Cases Total Collections Rs. 2004-05 72,00,000 3,35,000 75,35,000 2005-06 68,94,000 3,20,000 72,14,000 2006-07 35,64,000 1,65,000 37,29,000 7. Thereafter, AO bifurcated the gross receipts between assessee and assessee s wife at 75% and 25%. Thus, in AY. 2004-05 ou .....

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..... nsidered will be as under: S.No./ AY. Revised estimation Total as per the rates suggested Rs. Gross Income already admitted in ROI Net addition to be sustained Surgery Non- Surgery 2004-05 400 @ ₹ 2,500/- ₹ 10,00,000 143 @ ₹ 500/- ₹ 71,500 10,71,500 3,46,550 7,24,950 2005-06 383 @ ₹ 3,000/- ₹ 11,49,000 128 @ ₹ 600/- ₹ 76,800 12,25,800 4,11,280 8,14,520 2006-07 198 @ ₹ 3,500/- ₹ 6,93,000 66 @ ₹ 750/- ₹ 49,500 7,42,500 5,05,620 2,36,880 9. Ld. DR however, relied on the orders of AO and CIT(A) to submit that there is a suppression of gross receipts and accordingly, the estimation was made. Ld. CIT(A), having confirmed the estimation, there is no further reduction to be do .....

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..... igh side. In one of the statements recorded from the patient there is a signed proforma for claim of reimbursement of medical expenditure in which surgery fee was shown at ₹ 3,500/-. Based on that, it is fairly reasonable to estimate that amount as fee received for surgery in that year. Based on the above, the receipts from surgery in AY. 2004-05 would be at ₹ 10 Lakhs (4,000 X 2,500), in AY. 2005-06 at ₹ 11,49,000/- (383 X 3,000) and in AY. 2006-07 at ₹ 6,93,000/-. The estimation submitted by assessee at our instance is based on the statement from which the surgery fee at ₹ 3,500/- could be inferred. Accepting the same, with reference to non-surgery fee also, the total receipts per year can be determined as under: S.No./ AY. Total as per the rates estimated Rs. Gross receipts already admitted in ROI Net addition to be sustained 2004-05 10,71,500 3,46,550 7,24,950 2005-06 12,25,800 4,11,280 8,14,520 2006-07 7,42,500 .....

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..... g the additions, the aspect that proceedings U/s. 153C were initiated and completed has been kept in mind, as any addition without any corresponding incriminating material may not be sustained. 13. Keeping the above in mind, while accepting that proceedings U/s. 153C were validly initiated, we examine various additions made by the AO based on the available information and incriminating material. Estimation of receipts: 14. As discussed in assessee s husband Dr. S. Venkateswara Prasad case above, in assessee s hands also, AO estimated receipts in AYs. 2004-05, 2005-06 and 2006-07 and made additions of ₹ 67,07,900/-, ₹ 62,44,785/- and ₹ 24,17,149/- respectively after giving credit to disclosed receipts. Ld. CIT(A) while upholding the estimation of income, however, gave relief to the extent of amounts brought to tax in the hands of assessee s husband, therefore, substantial relief was granted by CIT(A) by deleting the double addition. The aspect of estimation was already considered in the hands of assessee s husband Dr. S. Venkateswara Prasad and referral fee to certain extent was already brought to tax in his hands. However, assessee s hospital charges, .....

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..... The Appellants employ 4-5 nurses and 5-6 housekeeping ward for the hospital. Further, in surgery cases, the Appellants take the help of outside specialist doctors for which they incur expenditure. Therefore, even in a surgery case what is earned by the Appellants is only 30% of the fee collected by them from patient for surgery and the remaining 70% is the expenditure which is passed on to other team members (doctors) . 14.2 However, considering the estimations adopted by the AO, clarification given by assessee and the evidences on record, we are of the opinion that assessee might be passing on the receipts to others. Substantial part was towards Doctors which was separately considered in Dr. S V Prasad hand. Considering the receipts accounted and ratio of expenditure claimed, we are of the opinion that estimation of net receipts can be considered by increasing the receipts by another 50% i.e., about ₹ 3,50,000/- in AY. 2004-05, ₹ 4,30,000/- in AY. 2005-06. In AY 2006-07 the in-patient register shows less number of patients. Assessee has shown substantial increase in receipts already. Keeping that in mind an amount of ₹ 2,00,000 can be estimated .....

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..... Agricultural Income (Rs.) 2002-03 40,000 2003-04 58,000 2004-05 52,000 2005-06 38,000 2006-07 33,500 2007-08 80,000 2008-09 80,000 17. As can be seen from the above, there is lot of variation of the agricultural income depending on the agricultural holdings. Assessee s husband Dr. S. Venkateswara Prasad also offered agricultural income and the same was accepted as such. Keeping that in mind and also the fact that no incriminating material was found and proceedings are u/s 153C, we are of the opinion that action of the AO cannot be upheld. He is directed to accept the agricultural income as offered by assessee. ITA Nos. 1717, 1718 1719/Hyd/2011: 18. These appeals are by Revenue with reference to the deletion by CIT(A) in Smt Amrutavalli s hands of the amounts assessed in Dr. S. Venkateswara Prasad. In these appeals, Revenue has raised the following grounds: 1. The Hon'ble CIT(A) .....

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