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Dy. Commissioner of Income Tax, Range-VI, Lucknow Versus Shri Mazhar Hussain and Vica-Versa

2015 (11) TMI 1130 - ITAT LUCKNOW

Disallowance of professional charges - failure to produce the confirmation of the persons to whom professional charges were paid - CIT(A) allowed the claim - Held that:- As seen from the order of Ld. CIT(A), it is seen that he has given a categorical finding that out of this amount of ₹ 6.00 lakh paid by the assessee to M/s Neuro Surgery Clinic in lieu of services rendered to the assessee, the payment of ₹ 2.00 lakh was made through account payee cheque and ₹ 4.00 lakh was show .....

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reason to interfere in the order of Ld. CIT(A) on this issue. - Decided against revenue.

Disallowance of medical pathology expenses - CIT(A) allowed the claim - Held that:- Regarding this expenditure also, categorical findings were given by Ld. CIT(A) that these expenses are incidental to assessee’s professional activities and are allowable as business expenditure and payments were made through banking channel and the recipient M/s Medical Pathology Clinic has duly disclosed the recei .....

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intenance of building, which was used by the assessee for his medical professional activities. Under these facts, we do not find any reason to interfere in the order of Ld. CIT(A) - Decided against revenue.

Restricting the addition @ 10% from 25% of the vehicle running expenses, car insurance and depreciation made on account of personal use by CIT(A) - Held that:- We find that 20% disallowance out of vehicle expenses was made by the AO on adhoc basis, but this fact is noted by the Ld. .....

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) deleted the addition - Held that:- AO did not bring any material on record, which could prove that the assessee has violated the terms and condition of professional and technical services contract made with Sahara Hospital from which the assessee has disclosed net professional income at ₹ 1,28,81,200/-. He has also given a finding that the AO has taken the professional receipt without conducting the necessary enquiries and without bringing any material on record to justify the huge undis .....

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sed personal receipt of ₹ 43.80 lakh. - Decided against revenue.

Addition made treating the income from agriculture as income from other source - CIT(A) deleted the addition - Held that:- This issue has been decided by the Ld. CIT(A), on this basis that the assessee has owned agricultural land approx 10 bighas irrigated on which agricultural activities were carried out through agricultural labours. He has also noted that the assessee has shown agricultural income in earlier and .....

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included the electrical expenses of assessee’s residence. At against this, it is noted by the Ld. CIT(A) that as per assessee, two electric meters are installed separately at his residence. Considering these facts, we do not find any reason to interfere in the order of the Ld. CIT(A) on this issue also because when separate electric meters are installed at the residence of the assessee, it cannot be said that electric from official meter was used for residential purpose without bringing any adve .....

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the appeal filed by the Revenue. The ground no.1 raised by the Revenue is as under: 1. The Commissioner of Income Tax (Appeals), Lucknow has erred in law and on facts of the case in allowing the claim of professional charges of ₹ 6 lacs, even when the assessee did not produce the confirmation of the persons to whom professional charges were paid. 3. Ld. DR of the Revenue supported the assessment order whereas Ld. AR of the assessee supported the order of Ld. CIT (A). 4. We have considered .....

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nt. The expenses incurred by appellant are incidental to his medical professional consultancy and same arc allowable expenses. The payment stated to be paid of ₹ 2,00,000/- through account payee cheque during the assessment year under consideration and ₹ 4,00,000/- shown as outstanding liability which was paid in subsequent year. The payments were duly reflected in the copy of bank account and books of accounts of appellant and the recipient M/s. Neuro Surgery Clinic has duly shown t .....

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₹ 6.00 lakh paid by the assessee to M/s Neuro Surgery Clinic in lieu of services rendered to the assessee, the payment of ₹ 2.00 lakh was made through account payee cheque and ₹ 4.00 lakh was shown as outstanding liability, which was paid in subsequent year. He has also given a finding that the recipient M/s Neuro Surgery Clinic has duly shown the receipt on account of professional charges from the assessee in its income tax return. He has also given a finding that these expens .....

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gy expenses amounting to ₹ 2.50 lacs ignoring the facts that it is always the patient who bear the pathology charges & not the doctor himself. 7. Ld. DR of the Revenue supported the assessment order whereas Ld. AR of the assessee supported the order of Ld. CIT (A). 8. We have considered the rival submissions. We find that this issue was decided by Ld. CIT(A) by making following observation on page 21 of his order:- On examination of written submissions of appellant and comments on rema .....

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disclosed the receipts of the charges of ₹ 2,00,000/- in its ITR. Keeping in view of these facts, I hold that the A.O. was not justified in making the disallowances of ₹ 2,50,000/- under the head of medical pathology expenses and same is liable to be deleted. The A.O. is directed to delete the addition of ₹ 2,50,000/. Thus the appellant gets relief of ₹ 2,50,000/-. 9. From the above Para reproduced from the order of Ld. CIT(A), it is seen that regarding this expenditure a .....

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Accordingly, Ground No.2 is also rejected. 10. Ground No.3 raised by the Revenue is as under:- 3. The Commissioner of Income Tax (Appeals), Lucknow has erred in law and on the facts of the case in deleting the addition made by the Assessing Officer on account of Repairs & maintenance at ₹ 1,84,720/-, ignoring the facts that no vouchers for purchase & maintenance of sanitary installation were furnished by the assessee. 11. Ld. DR of the Revenue supported the assessment order and Ld .....

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. did not raise any doubt in respect of expenses incurred and payment thereof. Since the expenses incurred on account of repairs & maintenance of building which was used by appellant for his medical professional activity. Therefore, the expenses incurred of ₹ 1,84,720/- cannot be said non professional expenses incurred or capital expenditure, which was not allowable. Keeping in view of these facts, I hold that AO was not justified in making the disallowance of ₹ 1,84,720/- and sa .....

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of repairs and maintenance of building, which was used by the assessee for his medical professional activities. Under these facts, we do not find any reason to interfere in the order of Ld. CIT(A) on this issue also particularly when the Ld. DR of the Revenue could not controvert any of these findings of the Ld. CIT(A). Accordingly, Ground No.3 is also rejected. 14. Ground No.4 raised by the Revenue is as under:- 4. The Commissioner of Income Tax (Appeals), Lucknow has erred in law and on the f .....

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ted by the Ld. CIT(A) that the assessee s wife and his son had owned two vehicles in their own names and the assessee denied using official cars for personal use. This fact is also noted by the Ld. CIT(A) that the assessee has not given any explanation in respect of non maintenance of log book of vehicle. Under these facts, Ld. CIT(A) has reduced the disallowance out of vehicle expenses from 20% made by the AO to 10%. Considering the facts as discussed above, we find no reason to interfere in th .....

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see being done from residence. 18. Ld. DR of the Revenue supported the assessment order and Ld. AR of the assessee supported the order of the Ld. CIT(A). 19. We have considered the rival submissions. We find that this issue was decided by Ld. CIT(A) by making following observation on page 19 of his order :- I have gone through the written submissions of appellant, comments on remand report and finding given in assessment order and remand report I find much force in the argument of appellant that .....

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s without conducting the necessary enquiries and brought any material on record to justify the huge undisclosed professionals receipts of ₹ 43,80,000/-. As evident from the return income filed by the appellant that he had received professional and technical receipts from Sahara Hospital and disclosed net professional income at ₹ 1,28,81,200/-. The AO did not bring any material on record which could prove that the appellant has violated the terms & condition of professional & .....

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hich was not recorded in the books of appellant and accordingly found not disclosed in his ITR. Keeping in view of above of above discussion, facts & circumstances of the case, I hold that the professional private medical consultancy estimated by A.O. of ₹ 43,80,000(gross) and ₹ 29,26,650/- net after allowing expenses at ₹ 14,53,350/-, without any basis and justification. The: addition of ₹ 29,26.650/- made by A.O. under this head is considered unjustified and same is .....

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₹ 1,28,81,200/-. He has also given a finding that the AO has taken the professional receipt without conducting the necessary enquiries and without bringing any material on record to justify the huge undisclosed professional receipts of ₹ 43,80,000/-. Based on these findings, Ld. CIT(A) has deleted the net income of ₹ 29,26,650/- out of professional receipt alleged by the AO of ₹ 43.80 lakh by holding that this addition is without any basis and therefore, not justified. Ld .....

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he case in deleting the addition of ₹ 1,00,000/- made treating the income from agriculture as income from other source, ignoring the fact that the assessee did not produce the details of holding of agricultural land and evidence regarding sale of agricultural produce. 22. Ld. DR of the Revenue supported the assessment order and Ld. AR of the assessee supported the order of the Ld. CIT(A). 23. We have considered the rival submissions. We find that this issue has been decided by the Ld. CIT( .....

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cts, we do not find any reason to interfere in the order of the Ld. CIT(A) on this issue also. Accordingly, Ground No.6 is also rejected. 24. Ground No.7 raised by the Revenue is as under:- 7. The Commissioner of Income Tax (Appeals), Lucknow has erred in law and on the facts of the case in deleting the addition of ₹ 55,396/- made on account of disallowance of electricity expenses ignoring the fact that the assessee did not submit any cogent evidence either before CIT(A) of the Assessing O .....

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e electrical expenses of assessee s residence. At against this, it is noted by the Ld. CIT(A) that as per assessee, two electric meters are installed separately at his residence. Considering these facts, we do not find any reason to interfere in the order of the Ld. CIT(A) on this issue also because when separate electric meters are installed at the residence of the assessee, it cannot be said that electric from official meter was used for residential purpose without bringing any adverse materia .....

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