9911796707
TMI Blog2023 (12) TMI 1116X X X X Extracts X X X X X X X X Extracts X X X X ..... e ROI and the receipt of Rs. 1,95,00,000/- remain unexplained as per the provision of sec.68 of the I.T. Act. 2. In addition to ground No.1, on the facts and in the circumstances of the case and in law, the CIT(A) has erred in holding that Rs. 1,95,00,000/- is a business income of the assessee as the said income is already offered in the revised return, has to be taxed as income from business despite the fact that the income is not included in the audit report and assessee also has failed to explain the source/nature of income. 3. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in allowing exemption u/s 35AD of the I.T. Act despite the fact that the assessee has not filed required details including From No. 10CCB as per Rule 18BBB of the I.T. Rule, has not claimed such exemption in the ROI filed u/s 139(1) of the I.T. Act and during the course of physical verification has totally failed to prove the condition required for the exemption. 4. Without prejudice and addition to ground No. 1, 2 & 3, on the facts and in the circumstances of the case and in law, the CIT (A) has erred in allowing deduction without appreciating the facts that the revi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed upon the assessee. In response, the assessee has filed a letter on 09.09.2015 and submitted that the original return was filed on 12.10.2013 and thereafter revised return was filed on 22.09.2014 and again re-revised return of income was filed on 30.03.2015 vide e-filing acknowledgement no.545357981300315. The assessee requested to consider the rerevised return of income filed on 30.03.2015, vide e-filing acknowledgement no.545357981300315, as return of income filed in response to notice u/s 148 of the I.T. Act, 1961 and also requested to provide the reasons recorded for reopening of the case. The reasons recorded for reopening were provided to the assessee, vide letter dated 29.04.2016 and duly served upon the assessee. The assessee, vide its letter dated 14.09.2015 raised objection for initiating proceedings u/s 148 of the Act and same were summarily disposed of by the assessing officer vide assessing officer letter dated 17.11.2015 and same was duly served upon the assessee on 01.12.2015. Thereafter, the notice u/s 143(2) of the Act, was issued 06.05.2016 and duly served upon the assessee. In response to the aforesaid notices, the assessee, attended the hearing. 4. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 of the Act after duly recording reasons and obtaining statutory approval from the competent authority as per the Income Tax Act. 6. During the course of assessment proceedings it was noticed by the assessing officer that the assessee has filed two revised returns in addition to the original return filed on 12.10.2013.There were some discrepancies in the two returns of incomes. In the original return of income there was no claim of depreciation as well as deduction u/s 35AD of the Act. However, after the survey action, the assessee filed a revised return claiming depreciation of Rs. 21,66,727/- as well as deduction u/s 35AD of the Act of Rs. 3,16,29,353/- @ 100% of the expenditure. However, the Schedule DPM, forming part of the return, was empty; leaving no details of depreciation. The assessee again filed revised Return of Income in which deduction u/s 35AD of the Act was revised to Rs. 4,74,44,030/- @ 150% of the expenditure. However, no documentary evidences viz-a-viz details of expenditure of capital nature incurred, date of commencement of operation of the new hospital, copy of various licenses and permission required and number of beds in the new hospital. In view of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the unaccounted income of the assessee firm, over and above, it regular income and no expenses /deduction will be claimed against the same. It was also admitted by him that this unaccounted income derived through undisclosed means would be fully offered for taxation. If the assessee is eligible for deduction u/s 35AD of the Act there was no need for it to enter into unaccounted transactions, thereby evading tax. In view of the above, taking into consideration of the incriminating materials impounded during survey action and the statement u/s 131 of the Act of Dr. Samir Gami, one of the Directors of the assessee, the assessing officer held that Rs. 1,95,00,000/- is as an unaccounted income of the assessee -firm and was added to the total income of the assessee u/s 68 of the Act and is taxed u/s 115BBE of the Act. 9. Aggrieved by the order of Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A), who has deleted the addition made by the Assessing Officer. The ld CIT(A) noted that undisclosed hospital receipts found during the course of Survey need to be taxed as income from business and are to be brought to tax as per the normal provisions of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Counsel for the assessee begins by pointing out regarding the taxation of additional income, under section 115BBE of the Act, of Rs. 1,95,00,000/-, as offered by the assessee during the course of survey. The ld Counsel stated that assessee did not have any other source of income other than the income which is generated from the hospital owned by the assessee company. The assessing officer has not given any finding that the assessee company has any other source of income other than from the hospital. The ld Counsel, relied upon the following judicial pronouncement to prove that the income declared during Survey is a business income and cannot be taxed as per the provisions of section 68 of the Act. (i) "CIT V/s. Shilpa Dyeing & Printing Mills (P) Ltd (219 Taxman 279) (Guj.). The ld Counsel further submitted that assessee had declared the additional income on the basis of loose papers found during the course of Survey which showed that the receipts were pertaining to the hospital received in the names of various doctors attached to the hospital. 14. About claim of deduction under section 35AD of the Act, the ld Counsel, argued that the assessing officer during remand proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -, as offered during the course of Survey. In spite of offering this additional income found undisclosed during the course of Survey, the assessee returned loss in both the revised returns only because of claim of deduction u/s 35AD of the Act. Thus, if the assessee has already offered the additional income disclosed during the course of Survey in the revised return filed, there was no reason to add the same again in the assessment. Further, the assessing officer has brought it to tax u/s 68 r.w.s 115BBE of the Act. During the course of Survey in the hospital premises, unaccounted receipts of the hospital in the name of certain doctors were found. As the receipts in question are relating to the business operations of the assessee's hospital. Therefore, such income should be brought to tax as the business income u/s 28 of the Act. Therefore, we note that additional income earned in the course of business ought to be taxed as regular income and not u/s 68 of the Act. We note that in the assessee`s case, the entire profit including additional income of Rs. 1.95 Crores has been shown in the return of income as part of profit or gain of business of hospital. Therefore, the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition is, therefore, upheld and the grounds of appeal Nos.1 and 2 of the Revenue are dismissed. 18. Coming to ground Nos. 3 to 8 raised by the Revenue, which relate to disallowance of deduction of capital expenditure u/s 35AD of the IT Act. Learned DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. On the other hand, ld Counsel defended the order passed by the ld CIT(A). We have already narrated the facts of the assessee`s case in above para hence we do not repeat them.We note that during the course of Appellate Proceedings, the assessee submitted all the details of capital expenditure. As the capital expenditure details were not furnished before the assessing officer, the details furnished during Appellate Proceedings were in the nature of additional evidence under Rule 46A and hence, were forwarded by ld CIT(A) to the assessing officer for verification and remand report. The assessing officer vide letter dated 05.09.2018 has submitted the remand report wherein he has stated that the assessee has only 92 beds as against 100 beds as required for ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
