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TMI Blog2018 (3) TMI 1157X X X X Extracts X X X X X X X X Extracts X X X X ..... the delay, we hereby condone the delay in filing the appeals as well as the Cross-Objections, which are admitted to be heard on merits. 3. Brief facts relating to AY. 2009-10 are that assessee is an individual, deriving income from medical profession. For this assessment year, assessee has originally filed return of income on 30-09-2009 admitting an income of Rs. 4,95,000/-. The same was processed u/s. 143(1) of the Income Tax Act [Act]. Subsequently, search and seizure operations were conducted in the group cases of Dr. B. Sukumar and assessee on 21-02-2011. Accordingly, notices u/s. 153A were issued to assessee. In response, assessee has filed revised return of income on 17-12-2012 declaring income of Rs. 7,09,020/-. Subsequently, notices u/s. 143(2) and 142(1) were issued and served. The Assessing Officer (AO) has made the following additions/disallowances while completing the assessment u/s. 143(3) r.w.s. 153A of the Act : Amount Rs. 1. Addition on account of suppression of receipts 4,06,373 2. Disallowance of Arogya Sree expenditure 11,58,999 3. Addition on account of Unexplained Investment u/s. 69 of the I.T. Act 19,72,731 4. Disallowance of expenditure u/s. 40(a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erator; was increased to the extent of Rs. 19,72,731/-. During the assessment proceedings, assessee submitted that the difference in opening WDV is due to additions made to the Fixed Assets during the AY. 2007-08 and the sources for the said investments were explained during the assessment proceedings of the relevant AY. 2007-08. The same was not accepted by the AO and made the additions of the above difference as 'unexplained investment'. Before the Ld.CIT(A), assessee has submitted that increase in the head 'Equipment & Generator' has taken place in the AY. 2007-08 and suitable explanation was offered during that year itself. Assessee submitted that she has not claimed any depreciation on these additional assets and hence the same figure appeared as an opening WDV in the subsequent assessment years. After considering the submissions of assessee, Ld.CIT(A) has allowed the ground raised by assessee by making the following observations: "8.3. I have perused the submissions made and it is clear that the increase in fixed assets has taken place in the Asst. Year 2007- 08, where this matter has been explained in detail. The appellant has not claimed depreciation on these increased fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipts by way of undisclosed income in the revised P&L A/c filed along with revised return of income. He further observed that assessee had neither claimed any expenditure relating to these additional receipts nor any material relating to inflated expenditures were found during the course of search. Therefore, these additional expenditures were disallowed by the AO. 9.1. The assessee submitted before the Ld.CIT(A) that AO has made the following additions as additional expenditure: i. Consultancy Charges - Rs. 10,20,000/- ii. Cost of maintenance - Rs. 7,76,562/- iii. Salaries - Rs. 2,50,000/- With regard to consultancy charges, assessee submitted that she had claimed consultancy charges in the revised return of income at Rs. 12,04,490/- which is nothing but assessee has shown Rs. 1,84,490/- as consultancy charges and Rs. 10,20,000/- as Aroyga Sree doctor consultancy fee in the P&L A/c which is filed along with original return of income. As such there is no additional expenditure claimed by assessee. 9.2. With regard to cost of medicine and salaries, assessee maintains books of account under Mercantile System of accounting. A sum of Rs. 11,79,111/- which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to say that assessee may be given proper opportunity of being heard. Ground No. 2 is allowed for statistical purposes. 10. Ground No. 3 is with regard to claim of inflated expenditure relating to chit discount, bank interest and X-ray expenses to the extent of Rs. 11,58,999/-. The facts relevant to the above ground are, AO observed that assessee has inflated the expenditure against Arogya Sree receipts in revised return of income by debiting additional expenditure to the extent of Rs. 11,58,999/- under the head chit discount, interest to bank and X-ray expenses. 10.1. On the other hand, in the appellate proceedings, assessee submitted that in the original return of income, assessee has reflected the Arogya Sree receipts as under: Particulars Debit Credit Arogyasree collections 71,47,271 Bank Interest 7,45,910 Chit discount 3,23,726 X Ray Expenses 89,363 Total 11,58,999 71,47,271 Net Total 59,88,272 Assessee submitted that assessee has declared Arogya Sree receipts of Rs. 59,88,272/- in the P&L A/c filed along with original return of income. Assessee has filed Ledger extracts of the above receipts which was mai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of Merilyn Shipping and Transport Ltd., Vs. ACIT (supra) is stayed by the Hon'ble High Court of AP. Further, he observed that AO has restricted the disallowance to Rs. 1,84,490/- on the ground that balance amount of Rs. 10,20,000/- was added back on the ground of inflation of expenditure and to avoid repetitive disallowances of the same amount, it was restricted to Rs. 1,84,490/- under the provisions of Section 40(a)(ia). Since Ld.CIT(A) allowed the expenditure of Rs. 10,20,000/-, it becomes necessary that the TDS provisions are attracted to the total value of Rs. 12,04,490/-. However, he noticed that Rs. 1,43,950/- do not attract TDS since payment to each doctor is below Rs. 20,000/- and further, an amount of Rs. 3,75,000/- was paid to Shri V. Rajendra, Legal Heir of Smt. Yasodamma, deceased patient under Arogya Sree Scheme for the compensation, the TDS provision will not be attracted; accordingly, he allowed to the extent of exemption. Therefore, Ld.CIT(A) has enhanced the disallowance to the extent of Rs. 6,85,540/-. 11.2. Considered the rival contentions and material on record. We noticed that assessee has filed evidences to claim that it has paid payment to doctor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowance, assessee filed an appeal before the CIT(A) and CIT(A) after considering the submissions of assessee and depreciation schedule, filed before him, found that the actual claim of depreciation is what was claimed in their original return of income and there is no additional claim of depreciation in the revised return. The same was accordingly deleted. Aggrieved with the above order, Revenue is in appeal before us. 14.2. In this regard, Ld.AR brought to our notice the depreciation schedule in which assessee has claimed depreciation to the extent of Rs. 22,11,862/- which is placed at Pg. 18 of the Paper Book. Even in revised return of income, assessee has claimed only depreciation to the extent of Rs. 22,11,862/-. The relevant return is placed on record at Pages 165 to 170 of Paper Book. 14.3. Considered the above submissions. We found that the claim of assessee is proper. The claim made by assessee in return of income is relevant and not the calculation as per the depreciation schedule, which may be filed by the assessee before the AO. We find that the assessee has claimed valid depreciation in the return of income as per depreciation schedule. Therefore, ground raised by Re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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