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2016 (3) TMI 208 - ITAT DELHI

2016 (3) TMI 208 - ITAT DELHI - TMI - Revision u/s 263 - Held that:- As regards the directions of the Ld.CIT to AO to verify details of the claims of depreciation made by the assessee, the AO in the fresh assessment proceedings held that, the assessee made no claim for depreciation. Thus this observation of the Ld.CIT, Meerut is factually in correct. There is neither an error in the original order of the AO passed u/s 143(3) of the Act on 16.12.2010, nor there is any prejudice caused to the Reve .....

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e AO passed u/s 143(3) of the Act. Thus this ground of revision is bad in law.

On non maintenance of books of accounts finding of the Ld.CIT is wrong. Maintenance of records and books as prescribed u/s 44 (GG)(AA) r.w.s. 6F(3) of the Act is applicable to only professionals. The assessee being a limited company, cannot be said to be carrying on any profession. The assessee company has maintained books of accounts as required under law. Thus the foundation on which the Ld.CIT, Meerut ca .....

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R AND SHRI KULDIP SINGH, JUDICIAL MEMBER For The Appellant : Sh.C.S.Anand, Adv. For The Respondent : Ms.Sulekha Verma, CIT, D.R. ORDER PER J.SUDHAKAR REDDY, A.M. This is an appeal filed by the Assessee directed against the order of the Ld.Commissioner of Income Tax (Appeals), Meerut dated 25.3.2013 pertaining to the Assessment Year (A.Y.) 2008-09. 2. Facts in brief:- The assessee is a company and is engaged in the business of running of a nursing home and hospital. It also declared income from r .....

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venue. The grounds on which the Ld.CIT(A) revised the order are listed below. (a) The assessee did not maintain the books of accounts as prescribed u/s 44AA r.w. rule 6F(3). (b) The AO accepted the negligible profit of ₹ 4,35,875/- without making enquiry and verification. (c) The AO did not call for details regarding additions in building of ₹ 67,51,365/- and regarding admissibility of depreciation, (d) Sundry creditors of ₹ 45,18,908/- and unsecured loans of ₹ 47,60,500/ .....

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ssee is in appeal. 4. We have heard Ms.Sulekha Verma, Ld.CIT, D.R. on behalf of the Revenue and Shri C.S.Anand, the Ld.Counsel for the assessee. 5. On a careful consideration of the facts and circumstances of the case, perusal of papers on record, orders of lower authorities and case laws cited, we hold as follows. 6. As regards the directions of the Ld.CIT to AO to verify details of the claims of depreciation made by the assessee, the AO in the fresh assessment proceedings held that, the assess .....

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d not draw any adverse inference. This direction of the Ld.CIT was in the nature of directing rowing enquiries. No specific finding was arrived at by the Ld.CIT that there was prejudice caused to the Revenue or that there was an error in the original order of the AO passed u/s 143(3) of the Act. Thus this ground of revision is bad in law. 6.2. This leaves us with the grievance against the findings of the Ld.CIT, Meerut that the assessee was in error in not maintaining he records and books of acc .....

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he Delhi Bench of the ITAT in ITO vs. Asalok Nurshing Home P.Ltd. (2006) 103 TTJ (Del) 820 order dt. 19.5.2006 at page 3 para 10 and 11 held as follows. 10. We have considered the rival submissions. Rule 6(F) r/w Section 44AA(I) of the Act casts an obligation on a person carrying a medical profession to keep and maintain such books of account and other documents which will enable the AO to compute his total income. Sub-section (3) of Section 44AA empowers the Board to prescribe the list of docum .....

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an artificial person does not have a body and, therefore, cannot be engaged in any profession. It can neither have an intellectual skill or any manual skill. We are also of the view that even taking a broader and a more comprehensive meaning of the term profession one cannot extend the same to the case of an incorporated company as being capable of carrying of a profession. The skill involved in carrying out professional activity is predominantly mental or intellectual rather than physical or m .....

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ific defects therein. We are, therefore, of the view that the CIT(A) was fully justified in deleting this addition made by the AO. We, therefore, confirm the order of the CIT(A) and dismiss this appeal by the Revenue. 6.4. Similarly is the decision of Hyderabad Bench of the Tribunal in Shalini Hospitals vs. ACIT 108 ITD 534 Hyd. wherein at para 5.12 held as follows. In the light of the above discussion, we hold that the activities of the nursing home in the instant case constitute business activ .....

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e books of accounts, without even examining the same. The turnover as well as profits are estimated on surmises and conjectures. This cannot be sustained as it is totally arbitrary and illegal. 6.6. In the case of M/s Spectra Sahres and Scrips (P) Ltd. vs. CIT, 354 ITR 35 (AP) the Hon ble A.P. High Court had considered a number of judgements of the Hon ble Supreme Court as well as various High Courts and culled out the following principles that govern the powers of the Ld.CIT u/s 263 of the Act. .....

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it is prejudicial to the Revenue-recourse cannot be had to section 263(1) of the Act. (b) Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interest of the Revenue. For example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue: or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated .....

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or modification of the assessment or cancellation of the assessment or directions issued for a fresh assessment were called for, and must irresistibly lead to the conclusion that the order of the Income-tax Officer was not only erroneous but was prejudicial to the interests of the Revenue. Thus, while the Income-tax Officer is not called upon to write an elaborate judgement giving detailed reasons in respect of each and every disallowance, deduction, etc., it is incumbent upon the Commissioner n .....

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ings with a view to start Fishing and roving inquiries in matters or orders which are already concluded; that the Department cannot be permitted to begin fresh litigation because of new views they entertain on facts or new versions which they present as to what should be the inference or proper inference either of the facts disclosed or the weight of the circumstance; that if this is permitted, litigation would have no end except when legal ingenuity is exhausted. (f) Whether there was applicati .....

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