TMI Blog2022 (10) TMI 604X X X X Extracts X X X X X X X X Extracts X X X X ..... intaining the books of account on cash basis. DR has also conceded that there is no difference in the tax rates for the AY 2013-14 and AY 2014-15. In view of the above discussions, we are of the considered view that since the assessee is maintaining the books of account on cash basis, the assessee has rightly disclosed his income when the Referral fee is received from M/s. Vijetha Hospitals during the FY 2013-14 and hence has rightly filed his return of income disclosing the same in the AY 2014-15. We therefore quash the orders of the Ld. Revenue Authorities and allow the appeal of the assessee. Unexplained unsecured loan - appellant was unable to furnish confirmation letter in this case - though the appellant had established the identity, creditworthiness and genuineness was not established, in the case of loan creditors, the appellant needs to establish all the three ingredients. Failure to establish any ingredient will render the loan / credit non-genuine - HELD THAT:- CIT(A) has rightly considered the issue and has sustained the addition made by the Ld. AO. We therefore find no error in the order of the Ld. CIT(A) and hence no interference is required on this issue. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - We find that voluminous documentary evidences have been produced before the Ld. AO for verification however, the Ld. AO not relying on the self-made vouchers and other documents, estimated the disallowance @ 20% of certain expenses as detailed in the order of the Ld. AO. We also find no fresh evidence has been produced before the CIT(A) to provide one more opportunity to the Ld. AO to verify the same. We therefore find no error in the order of the Ld. CIT(A) who was estimated 10% as against 20% of the disallowances made by the Ld. AO. We are therefore of the considered view that the there is no need to interfere with the order of the Ld. CIT(A) on this issue. Assessee has not retracted the sworn in statement who has accepted the disclosure made during the survey operations by offering Rs. 1,09,54,885/- to tax. The assessee has only corrected the hospital receipts which were wrongly accounted as income instead of unsecured loans from partners. We therefore dismiss this ground raised by the Revenue. - I.T.A. No. 252/Viz/2021 And I.T.A. No.29/Viz/2022 And I.T.A. No.77/Viz/2021 And CO No. 54/Viz/2021 in I.T.A. No.77/Viz/2021) - - - Dated:- 13-10-2022 - Shri Duvvuru Rl Reddy, H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... U/s. 143(2) and 142(1) of the Act were issued and duly served on the assessee. In response, the assessee s Representative submitted details in support of the income furnished by the assessee in his return of income. However, the Ld. AO noted that as per the sworn statement recorded u/s. 131 of the Act on 3/7/2015, in reply to Question No.16, the assessee has admitted that the Referral Fee from M/s. Vijetha Hospitals amounting to Rs. 13,78,200/- during the FY 2012-13, the assessee has failed to include the income offered during the survey proceedings while filing his revised return of income. The assessee s Representative submitted that the referral fee was received by cash during the FY 2013-14 only. Relying on the voluntary admission made by the assessee in his sworn statement u/s. 131 of the Act, the Ld. AO not convinced and accordingly added Rs. 13,78,200/- in addition to the total income returned while filing the original return of income on 8/11/2014. Aggrieved by the order of the Ld. AO, the assessee carried the matter in appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee reiterated the same submissions made before the Ld. AO and not satisfied with the submissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be disputed by the Revenue. Accordingly, the assessee has declared the amount received from M/s. Vijetha Hospitals during the FY 2013-14 while filing his return of income for the AY 2014-15. Merely based on the fact that M/s. Vijetha Hospitals who has accrued the expenses in their books of account cannot be the criteria to tax the income during the AY 2013-14 in the hands of the assessee who is maintaining the books of account on cash basis. The Ld. DR has also conceded that there is no difference in the tax rates for the AY 2013-14 and AY 2014-15. In view of the above discussions, we are of the considered view that since the assessee is maintaining the books of account on cash basis, the assessee has rightly disclosed his income when the Referral fee is received from M/s. Vijetha Hospitals during the FY 2013-14 and hence has rightly filed his return of income disclosing the same in the AY 2014-15. We therefore quash the orders of the Ld. Revenue Authorities and allow the appeal of the assessee. 7. In the result, appeal filed by the assessee is allowed. I.T.A. No.29/Viz/2022 Assessment Year :2014-15 8. This appeal filed by the assessee against the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of loan creditors, the appellant needs to establish all the three ingredients. Failure to establish any ingredient will render the loan / credit non-genuine. Thus, I have no reason to interfere with the order of the Assessing Officer. Accordingly, the addition of Rs. 10,00,000/- is sustained. 12. We find that the Ld. CIT(A) has rightly considered the issue and has sustained the addition made by the Ld. AO. We therefore find no error in the order of the Ld. CIT(A) and hence no interference is required on this issue. Thus, the Ground No.3 raised by the assessee is dismissed. 13. Grounds No.1 and 4 are general in nature and therefore they need no adjudication. 14. In the result, appeal filed by the assessee is partly allowed. I.T.A. No.77/Viz/2021 (By Revenue) Assessment Year :2014-15) 15. This appeal filed by the Revenue against the order of the Ld. CIT(A)-1, Visakhapatnam in ITA No.10405/2016-17/CIT(A)- 1/VSP/2020-21, dated 30/06/2020 arising out of the order passed U/s. 143(3) r.w.s 147 of the Income Tax Act, 1961 for the AY 2014-15. 16. Briefly stated the facts of the case are that the assessee is a Multi-Specialty Hospital, filed its return of inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ets without put to use, now offered for taxation. Rs. 10,31,062/- 4. Referral Fees paid to Dr. K. Kurmanadh (Rs. 13,15,000/-) and Dr. B.A.P. Rao (Rs. 1,09,250/-) without deduction of tax at source. Assessee voluntarily offered the same for taxation. Rs. 14,25,150/- Total Rs. 1,09,54,885/- 17. The assessee filed revised return of income on 02/12/2015 admitting the above income but considered a sum of Rs 86,19,000/- as unsecured loans out of the total receipts declared while filing original return of income. The assessee also filed before the Ld. AO the reconciliation statement between the profit admitted in the original return and the revised return filed by the assessee. The Ld. AO considered the submissions and observed that there is a reduction in the income declared in the revised return of income and completed the assessment in taking the net profit offered by the assessee in its original return of income. The Ld. AO assessed the total income at Rs. 3,09,65,640/- by raising a tax demand of Rs. 1,19,63,910/-. Aggrieved by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gross receipts is actually not loan but gross receipts of the assessee only. 6. (i) The Ld. CIT(A) ought to have examined the evidences for incurring expenses amounting to Rs. 2,00,65,496/- on which 20% disallowance was made by the AO for want of proof. (ii) The order of the Ld. CIT(A) may be set aside on this count and the AO may be given an opportunity for verification of these expenses. 7. The appellant craves leave to add or delete or amend or substitute any ground of appeal before and / or at the time of hearing of appeal. 8. For these or other grounds that may be urged at the time of appeal hearing, it is prayed that these above additions made on relevant disallowance be restored. 20. The Ld. DR argued that the assessee has accepted the sum of Rs. 1,09,54,885/- during the search. However, while filing the revised return of income the assessee has reduced the income of the hospital by around Rs. 86,19,000/- and re-audited the financials by filing the loss return for Rs.44,29,419/-. The Ld. DR submitted that the reduction in the total receipts by the hospital for Rs. 86,19,000/- was treated as unsecured loans received from the partners and third parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce U/s. 148 of the Act on 24/2/2016. It is observed that the assessee has corrected the accounting errors while filing the revised return of income. Further, we also find from the paper book that the assessee has submitted the details of unsecured loans, confirmation from the loan creditors and also the income tax returns and the bank statements of the loan creditors. Further, we find that the assessee and also its partners are assessed by the same Assessing Officer viz., ITO, Ward-1(4). The Ld. AO if not relying on the documents produced by the assessee, could have verified the creditworthiness based on the filing of returns of the partners available in his records. The Ld. CIT(A) has rightly verified the loans and the sources of loans of the creditors and rightly deleted the addition made by the Ld. AO. We therefore find no error in the order of the Ld. CIT(A) on this ground and therefore no interference is required. 22. With respect to Ground No.5 regarding the violation of the provisions of section 269SS, we find that the assessee has proved the creditworthiness of the loan creditors which is recorded in the books of accounts of the assessee as well as loan creditors. The Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case. Accordingly, the Assessing Officer is directed to adopt Rs. 1,17,820/- and Rs. 3,75,336/- respectively. The remaining disallowance on account of salaries / staff welfare / vehicle maintenance, the Assessing Officer has disallowed at the rate of 20% without adducing any defect except unverifiability in nature. It is a well laid down principle of law that unable to comprehend the issue or unverifiable in nature can t be attributable to the appellant and cannot be a base for disallowance. Per se there cannot be any addition on estimation without some credible material. After examination of facts, I find no reason in disallowing 20% salary, staff welfare and vehicle maintenance. Accordingly, the Assessing Officer is directed to delete the addition on these heads. 25. We therefore find no error in the order of the Ld. CIT(A) who was estimated 10% as against 20% of the disallowances made by the Ld. AO. We are therefore of the considered view that the there is no need to interfere with the order of the Ld. CIT(A) on this issue. It is ordered accordingly. 26. With respect to Ground No.3, it is found that the assessee has not retracted the sworn in statement who has acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
