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2015 (9) TMI 1174 - ITAT AHMEDABAD

2015 (9) TMI 1174 - ITAT AHMEDABAD - TMI - Disallowance of expenses claimed with respect to Sarvoday Hospital - Held that:- The rent figures of the agreement entered by the Assessee with Smt. Ramilaben Patel, his wife, did not match with the rent receipts as shown in the Profit and Loss account of Sarvoday Hospitals. Before us, ld. A.R. has not placed any material on record to controvert the findings of ld. CIT(A) nor has placed any material on record to demonstrate as to whether the business wa .....

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hich Assessee could not satisfactorily furnish any explanation. Before us, it is Assessee’s submission that the business was let out on account of temporary lull however no evidence has been placed on record to substantiate the claim of temporariness of the stopping of business. In view of the aforesaid facts, we find no reason to interfere with the order of ld. CIT(A) and thus the ground of Assessee is dismissed - Decided against assessee.

Treating agriculture income as income from o .....

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he Assessee before A.O. and ld. CIT(A) and the same have been placed before us for the first time. In view of the aforesaid facts, we are of the view that the issue of agricultural income vis-à-vis the land holding of the Assessee needs to be re-examined at the end of A.O. We therefore remit the issue to the file of A.O to decide the issue afresh - Decided in favour of assessee for statistical purposes. - I.T.A. Nos. 1043 & 1044/AHD/2010 - Dated:- 28-8-2015 - SHRI RAJPAL YADAV AND SHRI ANIL .....

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hat she has common submissions to make and therefore both the appeals can be disposed of together. Ld. D.R. did not object to the aforesaid submissions of ld. A.R. We therefore proceed to dispose of both the appeals by a consolidated order and proceed with the facts for A.Y. 03-04. 3. The relevant facts as culled out from the material on record are as under. 4. Assessee is an individual and by profession a Doctor stated to be having income from rent and other sources. Initially Assessee filed re .....

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der of ld. CIT(A), Assessee is now in appeal before us and has filed the grounds which have been later concised and the concised grounds reads as under:- 1. Ld. CIT(A) erred in law and in fact in confirming the validity of reassessment proceedings initiated u/s 147. 2. Ld. CTT(A) has erred in law and in facts in confirming disallowance of the expenses of ₹ 64365/- claimed in Sarvoday Hospital without considering the fact that there is temporary full period in the business due to ill health .....

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m other sources. 1st ground was not pressed and therefore the same is dismissed as not pressed. 2nd ground is with respect to disallowance of expenses of ₹ 64,365/- 5. On perusing the Profit and Loss account, A.O noticed that against the interest income, rent income and dividend income aggregating to ₹ 2,09,305/-, Assessee had claimed expenses of ₹ 64,365/- with respect to Sarvoday Hospital. A.O was of the view that since no business activity was carried out in Sarvoday Hospita .....

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ife was not filed by the appellant at assessment stage and there is no evidence that it was valid during the year in question. Rent figure as per this agreement does not match with rent receipts of ₹ 1,13,400 in the P & L A/c of Sarvoday Hospital for F.Y.2002-03. In the absence of proof regarding continuance of business of Sarvoday Hospital during F.Y.2002-03, expenses claimed are not admissible. Disallowance of expenses of ₹ 64,365/- is confirmed. 6. Aggrieved by the aforesaid o .....

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ported the order of A.O and ld. CIT(A). 8. We have heard the rival submissions and perused the material on record. The issue in the present case is with respect to disallowance of expenses claimed with respect to Sarvoday Hospital. It is Assessee s contention that during the year due to ill health of the Assessee no profession was carried out by the Assessee but however we find that ld. CIT(A) while upholding disallowance has noted that Assessee was specifically asked regarding carrying out the .....

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amilaben Patel, his wife, did not match with the rent receipts as shown in the Profit and Loss account of Sarvoday Hospitals. Before us, ld. A.R. has not placed any material on record to controvert the findings of ld. CIT(A) nor has placed any material on record to demonstrate as to whether the business was carried in subsequent years. In view of these facts, we find no reason to interfere with the order of ld. CIT(A) and thus the ground of Assessee is dismissed. 3rd ground is with respect to tr .....

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the year. He was therefore of the view that in the absence of any business, the question of allowing of expenses does not arise. He was also of the view that since the land Revenue expenses being related to agriculture operations the same cannot be allowed while computing the income of the firm. As far as the claim of depreciation was concerned, he was of the view that since Assessee had not done any business, depreciation was not allowable. He accordingly computed the income of Patel Export Co .....

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should have been assessed under the head "Income from House Property" and not under the head "Business". In the profit and loss account of Patel Export Co. for F.Y.2002-03, bank interest of ₹ 62,484/-, kasar vatav of ₹ 5,027/- and share dividend of ₹ 3,750/- is shown on receipt side, against which expenses totaling to ₹ 6,21,441/- including depreciation of ₹ 3,23,473/- in respect of assets including factory building, car, air conditioner, zerox m .....

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use Property and instead of depreciation alone, entire expenses of ₹ 6,21,441/-be disallowed. 10. Aggrieved by the order of ld. CIT(A), Assessee is now in appeal before us. 11. Before us, ld. A.R. reiterated the submissions made before A.O and ld. CIT(A) and further submitted that Assessee has earned business/professional income in the form of rent from letting out of business premises and hence Assessee was eligible to claim depreciation. It was further submitted that even though there wa .....

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ereby disallowed the expenses including depreciation. We find that while changing the head of income from business to income from house property , Ld. CIT(A) has noted that Assessee was asked to justify as to how the activity of letting out of premises constituted business of the Assessee to which Assessee could not satisfactorily furnish any explanation. Before us, it is Assessee s submission that the business was let out on account of temporary lull however no evidence has been placed on recor .....

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ced that in A.Y. 2001-02 part of the agricultural income was treated income from undisclosed sources and while finalizing the assessment for A.Y. 2001-02, the agriculture income from cultivation of Kismis was accepted at ₹ 2,50,000/- only. He therefore applying the same parameters which were applied in 2001-02, considered income from agriculture at ₹ 2,50,000/- and treated the balance amount of ₹ 10,01,686/- as income from undisclosed sources. Aggrieved by the order of A.O., As .....

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not substantiated. Appellant's contention that sale of Kismis during this year was out of opening stock brought forward from earlier year, cannot be considered as sufficient to substantiate genuineness of agricultural income in A.Y.2003-04, since kismis opening stock for A.Y.2001-02 is brought forward from earlier years and in A.Y. 1999-2000, genuineness of agricultural operations has not been accepted even at appellate stage. Following appeal desicion in appellant's case for A.Y.1999-20 .....

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ollowed in A.Y. 2001-02 and accepted ₹ 2,50,000/- as agricultural income and the balance as income from other sources. She submitted that while deciding the issue for A.Y. 2001-02, Hon ble ITAT confirmed the addition of ₹ 8 lac as income from other sources and accepted the balance income as agricultural income. She therefore submitted that applying the ratio of the in Assessee s own case for A.Y. 2001-02, approximately 10% of agricultural income may be reduced to take care of the def .....

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ion has noted that Assessee did not furnish any evidence of carrying out agriculture operations. Before us, ld. A.R. has placed on record the copy of certificate of land holding of the Assessee and family members at page 46 to 51 of the paper book in support of carrying of agriculture operations. We find that the aforesaid certificates are in vernacular language and Assessee has not filed its English Translation. We further find that the aforesaid documents were not made available by the Assesse .....

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o state that A.O shall grant adequate opportunity of hearing to the Assessee. The Assessee is also directed to co-operate by promptly furnishing all the required details called for by the A.O. In case of failure by the Assessee to furnish the required details, the A.O shall be free to decide the issue on the basis of material on record. In the result, the ground of Assessee is allowed for statistical purposes. 17. In the result, the appeal of Assessee is partly allowed for statistical purposes. .....

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faction as required under the provision of section 147 of the I. T. Act, the issuance of notice u/s 148 of the Act is absolutely illegal and such reopening be declared as bad in law. 3. The Learned authorities below erred in not appreciating in proper perceptive the objection raised by the appellant to the initiation of the proceedings u/s 147 of the Act. Hence the issuance of notice u/s 148 may be declared as illegal and void ab initio. 4. The Learned CIT (Appeals) erred in law and on facts in .....

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